INTERVIEW –CEO Per Excellence: The man at the helm of affairs of the N6 billion worth of investment in Federal Palace Hotel & Casino, in an interview with FinIntell, shares his thoughts on the challenges and rewards in running a leisure and hospitality business in Nigeria.
While others carved a niche for themselves in more popular sector of the economy, such as banking, telecoms, oil and gas, David Kliegl, a down-to-earth and lively South African, mastered leisure and hospitality business.
Mr. Kliegl, who oversees an investment worth over N6billion in Nigeria, started his career as a trainee hotel manager, over thirty years ago, and currently runs the affairs of the Federal Palace Hotel & Casino, Nigeria, an arm of Sun International, South Africa.
Mr. Kliegl has worked in various parts of the world, specifically South Africa, China, Lebanon, and Nigeria; all in the areas of leisure and hospitality management, ranging from Theme Parks, Five-Star Hotels, High Class Spas, Commercial Hotels, Game Reserves, Upmarket High Scale Resorts, Resort Hotels, and Casino Hotels.
He joined Sun International as a room service manager in 1984 and rose to the General Manager’s level years after. In 2004, he was the Director of Operations at Al Habtoor Hospitality; a year after, he became the Director at Leisure Retail Property Solutions China Limited, and later the General Manager of Cascades Hotel, Entertainment Centre, Sports & Recreation at Sun International, before coming to Nigeria in 2007 to head the Federal Palace Hotel & Casino.
David Kliegl, in this interview with FinIntell, shares his thoughts on the hospitality business in Nigeria.
How has it been doing business in Nigeria?
To be sentimental, if you’re serious about doing business in Africa, you need to be doing business in Nigeria; though Nigeria is not an easy place to do business. There are some current conditions which are prevalent and we all know what they are. The prominent one is the lack of power. But we believe that would change. We believe that when President Goodluck Jonathan came into power, he said within four years there will be infrastructure; there will be dramatic increase in power. However, I think singularly, the lack of power for me is the biggest problem that we have.
And from the hospitality perspective, what I think is particularly important for us as an operator in Nigeria is that we need to be able to locally obtain all of the products that we need to run our business here. With that we need to look at improved road infrastructure so we can get our products from the market to the hotel in good condition. If you have looked at the quality of the food item we receive here, it’s particularly poor. It is poor because of the agricultural techniques and the supply channels. The way the product get harvested, transported and distributed is not efficient, and we are not getting productivity in that area.
Although, we’ve been able to source some of our furniture locally, but the quality is lower than the components that we need. Some of the ones we even manage to get are particularly poor. But our single largest detrimental factor to trading in Nigeria is obviously lack of power. And in order not to halt our profits, we pass the high cost of doing business to the customers. But if we are able to source our products locally it would absolutely reduce the cost of our production and boost our profits.
One of the things we get consistently from our customers is the complain that they don’t even pay that much for hotels in New York or Paris, or pay that much for food in Tokyo, which is supposed to be one of the most expensive cities in the world. So when you look at the quality of what people are getting here in terms of world standard and the prices they are paying, it’s just on the high side due to the high cost of doing business here.
What is your assessment of the hospitality business in Nigeria?
Based on my experience which is very much oriented in the suburb of Lagos State, hospitality industry in Nigeria has a common factor in terms of leisure business. And this relates to the issue of Nigeria being adequately equipped as a leisure destination for international inbound tourists.
Certainly, Nigeria has tremendous amount of inbound business travellers. And that is pretty because of the prospect from the commercial aspect in Nigeria. I think the leaders in the commercial sector are the financial service providers and the oil and gas sector; to some degree, the manufacturing sector. But this is where hospitality business fits in. Federal Palace for instance is very oriented towards the commercial travellers, and in recent times we have seen an emergence of what we called the mystic pleasure travellers; people who come for special occasions or bring their families on weekends. And that is because we’ve positioned ourselves with more results attribute. For example, we have the kids’ play area; there is the revitalisation of the swimming pool; the inclusion of tennis court, mini golf, and the beautification of the gardens around. We definitely have a resort components as well as being oriented towards the commercial travellers.
How has casino business been?
The casino certainly adds to our leisure components. We have people that stay in the hotel and come to play the casino. It helps us grow our leisure into entertainment component. It took us a long time to grow the casino as business. I think we probably run the only casino operation that applies international gaming practices, in terms of the rules governing the game and following appropriate procedures in what we do. It’s relatively a new market in many aspects. But it has grown significantly since we first started and it has continued to grow. When we first came here, we saw 20million people and it was like press the green button and start printing money (general laughter). But it took us a bit longer to establish the casino. We have a very classy and sophisticated product that is thoroughly being enjoyed and it’s doing extremely well.
Has it been rewarding doing business in Nigeria?
We are still waiting for the rewards (general laughter). But reward for us is that we’re sitting on a threshold that is potentially a huge market. And with all investments, as much as you would like to see immediate returns on your investment, it’s not always the case. We’ve made our investments, we’ve put down our best, structured ourselves correctly, learnt how to trade in this environment, and we have no doubt that as we progress into the future, we should get suitable profits. Consequently, we would reward our shareholders as we provide standard products for our guests, and at the same time, continue the development and uplifting of our staff.
Talking about your staff, how has their performance impacted on the business?
Firstly, I think the Nigerian staff are great because they have genuine ways of welcoming guests. I think overall, because the standard of education in Nigeria is much higher than in other parts of Africa, the Nigerian staff possess the ability to understand, interpret and apply hospitality principles to a higher level as they interact with the guests. They are very important companion to us because we are a commercial hotel that must treat customers rightly. So, we got a great, warm, and well educated people which make it easy for us to lead and develop.
What are your future plans as an organisation?
Since Sun International, the direct foreign investor in Federal Palace Hotel & Casino, bought the share of the Tourist Company of Nigeria, we’ve always been making plans for expansion. Our international strategy expansion focus on properties outside Southern Africa, and Federal Palace Hotel is our first venture into West Africa. And we certainly like to see more opportunities in Nigeria and other West African countries. So logically speaking, in my opinion, the next point of migration for us would be to establish something in the capital city, Abuja.
Are you not deterred by the security issue in some parts of the country?
(Interjects) What security issue? (General laughter) Everybody is always careful when looking at investing in a country. The stability of the country is extremely important because external influences negatively affect the return on your investment or endanger your employees.
However, wherever you go around the world there are issues. We are hotel operators; we’re not politicians or religious people in terms of philosophy. We have our own believes. We’re here as professional hoteliers and we need to operate in these environments and provide our services. But it is not uncommon for hotels to support negotiation between warring parties around a peaceful table. We provide the facilities for the politicians and for others to seat and determine the state of the country.
How do you balance work-life?
It’s very easy. I work and when am not working I work (general laughter). I like to… some of the evenings … play tennis. I like to spend some of the times of the weekend in the swimming pool and I like to travel a lot. Relaxing within this environment also helps us to be conscious of the surroundings. Sometimes when you relax within an environment, you’re using the environment like the guests would use it. You get to see things that you won’t normally see; like sighting a broken ceiling while lying down beside the pool. So relaxation helps me to be more productive.
