Swiss group shows faith in SA’s hotels
SA’s hospitality industry is one of the sectors worst hit by the Covid-19 pandemic, but Switzerland-based Sommet Education is confident about its recovery prospects, announcing this week the acquisition of a majority stake in Invictus Education Group, which owns the well-known International Hotel School (IHS).
Sommet Education, a hospitality education group with a presence in Switzerland, France, Spain, the UK and China, says the acquisition will almost double its global footprint of education campuses to 17 from nine, and also intensify its planned rollout elsewhere in Africa. The deal will increase its student body to 9,000 from 6,000.
The value of the deal was not disclosed. Among Sommet brands are the Glion Institute of Higher Education and Les Roches Global Hospitality Education.
“We are extremely selective when it comes to expansion, both in territories for expansion and partners for expansion,” says Sommet Education CEO Benoît-Etienne Domenget. “We see Africa as a tremendous market in the years to come and see South Africa as a market in itself, and a springboard for further African development.”
He says history shows that the hospitality sector has the ability to bounce back quickly after global shocks, noting that over the past two decades it had to contend with the severe acute respiratory syndrome outbreak in Asia, as well as the 2008/2009 global financial crisis, which had “huge repercussions for the industry”.
SA’s hospitality sector is no different. He says it is important to break down the hospitality sector into its different parts because it does not consist just of hotels and restaurants, although they form the “backbone of the sector”.
For instance, Sommet and Invictus both provide education for students entering the food service and retailing market, which is part of the broader hospitality market. Invictus, through its Summit brand, provides training for employees at large corporate clients such as Checkers, KFC and McDonald’s, among others. It also offers creative media education courses through its SAE Institute Africa.
But the hotel sector by itself provides enough promise for the future, with Domenget saying there is “already embedded growth in that sector. From now until 2024 you have 10,000 hotels in the development pipeline around the world. Those require specialised education, and the nature of this job market is you need to constantly refresh competencies, and those are the fundamentals supporting our own expansion plans in Africa and the rest of the world.”
Invictus Education Group’s executive management team, which includes founder and CEO Mike Lambert, will be staying on board at the enlarged company.
Lambert says a significant aspect of the deal is that the additional firepower of Sommet Education will help speed up Invictus’s expansion plans.
“I had the intention of opening one campus this year, another IHS campus next year and an SAE Institute campus at the end of next year. That’s now been compressed to launching five campuses before the end of next year, and Kenya and possibly Nigeria will have launches in 2023 for both IHS and SAE. That value is being brought to the table by Sommet.” Domenget says Sommet believes “very strongly” that the African continent holds significant opportunities, and there “are more than 200 hotels in the pipeline”.
“If you take four of five big cities around Africa — Johannesburg, Cape Town, Lagos, Nairobi and Cairo — you would have just for those cities in excess of 80 projects in the pipeline, and that is just for hotels.”
Lambert says if SA can vaccinate a large part of the population by the end of the year there will be a “significant rebound in the hospitality sector, especially for inbound tourism”. He says student enrolment at Invictus was up 5% in February compared with the same period last year, which also underlines that confidence in the market is not misplaced.
“Most of our students are graduating in two or three years’ time and in that time the world will be a different place. Covid will be a thing of the past and hopefully everyone would have been vaccinated.”
Investment analyst Chris Gilmour says while he is enthusiastic overall about the hospitality sector, particularly the leisure industry’s ability to bounce back quickly, corporate travel is “going to take a long, long time to recover”.
“Corporate travel will be the last to recover because the bean counters in corporates have gotten used to people doing meetings on Zoom and other applications.”
Gilmour says the tourism industry in SA will do well in the future, but will take a long time to recover.
We see Africa as a tremendous market in the years to come
Benoît-Etienne Domenget Sommet Education CEO