Transmuting Hospitality

Tadiwos Belete is the co-owner of Boston Day Spa, Kuriftu Resort and Spa and Boston Partners Plc, among other businesses. He introduced a well-established and standardized spa at Boston’s Partners. Born in a small village called Lemo in Arisi, he later came to Dessie with his uncle. In 1980, he left for Sudan and stayed there for three years. Then he left for Chicago, United States. After a year in Chicago, he headed to Boston and lived there for 19 years. Tadiwos deeply believes in challenging himself to the fullest. A couple of years ago Tadiwos shared the Pioneer Ethiopian Diaspora Business Person award with Zemedeneh Negatu, Managing Partner of Ernst & Young Ethiopia & Head of Transaction Advisory Services (Corporate Finance) Eastern Africa Ernst & Young LLP. Dawit Taye of The Reporter sat down with Tadiwos and discussed his investments and the hospitality industry. Excerpts:

The Reporter: Can you tell me a few things about your latest project?

Tadiwos Belete: As you know our motto from the very beginning is to put Ethiopia back on the map. We are working to put a dent in the country’s tourism industry. In line with this plan we have a number of new projects that we will put into action this year. As you know the Zeway project is one of our focuses this year. The whole idea behind the Zeway project is to offer a decent place for hundreds of thousands of foreign and domestic tourists who commute through Zeway every year to southern parts of the country. On the other hand, Castel Winery has been doing an amazing job in Zeway. First, the establishment of the winery managed to associate the country’s name with a well-known wine brand internationally. In addition to that, this newly established chain of Castel-Kuriftu Wine House offered a decent place where anybody, coming from any part of world can stay. The second one on the chain of Castel-Kuriftu Wine House, which is coming in less than two months, will be in Bahir Dar. But, we’re hoping to do the one in Bahir Dar a little bit differently with an addition of cultural Ethiopian food and music. We have also finalized the deal with Castel to put one up inside Kuriftu Resort Spa in Debrezeit. As you know, Kuriftu in Debrezeit has a massive expansion plan and we are preparing to make the Castel-Kuriftu Wine House part of that expansion. This is not all. We also have agreements to take this chain to major cities like Hawassa and abroad like the United States. So, the whole point of this venture is to reach our customers wherever they are. We want to offer nice and decent services in various places so that our customer get the service they want without having to move further from where they are. On the other hand, we also want our joint efforts to inspire others into lifting the tourism sector off the ground. Broadly, we also have the intent of serving as a benchmark for such joint ventures in the country.

Since you aspire to create a benchmark for such joint operations in the tourism sector, can you tell us what your business deals look like?

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Our business deals will be different from establishment to establishment. For instance in Zeway, Castel is the one that built the property while we will be tasked with managing the business fully. But, if we look at the one in Bahir Dar, we will be building the property and they will be invited to work with us. Still the case is different in Debrezeit; although it is our property there they will be building the wine house there and working jointly with us. So, it is a partnership, but the modality is different from place to place; we chose the best possible arrangement to manage it successfully.

Can you account for the joint investment cost so far?

Between the two of us, for example, we have spent some 15 million dollars on the Zeway Castel-Kuriftu Wine House. I do not expect the cost of the one in Bahir Dar to be much different.

Focusing on the industry in general, we now see a number of new lodges being opened in Ethiopia. As part of this budding industry can you share your thoughts on where it is at the moment and where it is going?

I think the overall picture is a mixed one. For instance, we can take three towns in Ethiopia – Debrezeit, Bahir Dar and Hawassa – which are naturally excellent tourist destination. The thing is these towns do not as such have historical attractions but are by themselves favorable destinations for travelers. So, in all three towns I have mentioned the growth of the lodge and resort sector is quite fantastic. If you ask me if it is enough I would have to say no. If asked whether we have to have better quality lodges there I would still say yes. Do we have to have much better services and well-trained service providers? Again I will say yes. As you know, special focus has not been given to the tourism industry and the potential it has to contribute to the country’s economy is still untapped. However, we have to understand that building properties and actually providing the services are two different things entirely. If I have any reservation here, it would be about alignment of the two [building lodges and actually selling hospitality services]. This I think would be a challenge.

Can you elaborate on this challenge? What worries me, for instance, is what we see being invested in erecting these properties and what is spent on tuning up the human resources. At end of the day the human resources is the major part of the hospitality industry. What we see at the moment is a lot of these establishments trying to steal what they taught are trained personnel from one another. In this process, they will eventually lose a considerable amount of resources to compensate workers whom they are luring away from a competing establishment; this is quite an unnecessary business expense which should have been spent to develop the skill of one’s own employees. This is quite damaging for the hospitality industry’s labor market and the viability of the businesses themselves. Here if I have to suggest, it would be for a much needed intervention on the side of the regulatory body. I think the regulatory body can, for instance, require new establishments, those with three stars and above, to train a considerable number of their staff before they start operations. What you have to understand is that I am not against free movement of workers, but as an infant industry the labor market should benefit from having adequate training labor forces available in market. The other one is to curb the unreasonably inflating labor cost that is not keeping pace with the natural growth of the sector. This is definitely not sustainable for the whole hospitality sector in the country. I feel this should be something the new national tourism council could look in to.

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Another peculiar characteristic of newly built lodges and resorts is that they all look alike. Most of the properties have similar touches in their finishing, why is that? Perhaps could this be a problem in the foreseeable future?

The way I see it, and the way I tried to set up my properties is on the basis of finding a unique identity. For example, for you to remember seeing us [Kuriftu,] you have to have something like an identifying trait and color. As far as I am concerned, I think the majority of tourists come to Ethiopia because they want to see Ethiopian services and products; they are not here to see a US product, or UK services or something else. When we plan to expand outside of Ethiopia, this is exactly what we want to take with us. We want to have an Ethiopian service, and Ethiopian products. As an integral member of this industry you speak of, what are the things you are trying to do differently?

If I am to say what differentiates our establishment is that we train our staff in-house. We recruit fresh graduates and train them to fit not only the requirements of the hospitality service but also our own standardize service delivery style. We are also doing the same with our services. Now we are trying to brand ourselves through our services. We are working to make our services recognizable and distinct from others in the sector. On the other hand, we are trying to promote Kuriftu together with Ethiopia and the continent as a whole. What I mean is that just like the world-renowned hotel brands like the Sheraton or Hilton, we want people to think of Kuriftu when they travel to Ethiopia and Africa. We want our distinctive, unique services to be associated with the country. So, we do spend considerable amounts of time and money on promoting the country and our services besides investing in the skill. We do have a clear belief that for our services to be recognizable internationally first the country should be recognizable as an ideal tourist destination. Our growth is inextricably linked to he sector, and the sector’s to the country. We operate on the principle that the bigger the pie, the bigger our share.

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