HOSPITALITY HOTEL MANAGEMENT COMPANY
Hotel in Sandton

Hospitality Property Fund Limited is a property loan stock company which invests in hotel and leisure properties. The Fund was established with the aim of offering shareholders an investment vehicle with exposure to the hospitality sector through the ownership of hotel and leisure properties. Through these long-term partnerships, the Fund leverages the value of its portfolio. Following the implementation of the Restructure, earnings will be distributed equally between shareholders. Ethical values and open stakeholder communication underpins the Company’s management philosophy. Hospitality Property Fund Limited is a REIT offering investors a unique investment vehicle in the hospitality sector through the ownership of select hotel and leisure properties. Investment in a select portfolio of hotel and leisure properties, increasingly focusing on large hotel properties in major metropolitan centres. Implementing an active asset management strategy and continually reviewing the composition of the portfolio to maximise the return on assets. Hospitality’s strategic objectives are to optimally grow linked unitholder returns while diversifying and managing risk and at the same time maintaining high standards of corporate citizenship and sustainable development. However, it is the Fund’s portfolio and asset management expertise which ensures its long-term ability to deliver on the return potential of these assets while mitigating the inherent risks. Selection of the tenants, management company and the hotel brand, which are best suited to a specific property, is crucial to effectively managing the operational risks and maximising the performance of each hotel. Conclusion of leases with tenants is preceded by a formal process to establish the best fit between the hotel property, tenant and brand which, in turn, enables the Fund to generate sustainable returns for shareholders. Proposals are initially obtained from a number of potential tenants that are evaluated by the investment committee which makes a recommendation to the Board for final approval. The management of labour costs, especially against the backdrop of wage settlements, generally exceeding inflation, is an ongoing challenge. Centralised procurement platforms have been formalised at most of the hotels to negotiate bulk supply arrangements with major suppliers to minimise the cost of consumables. The Fund has developed various structures enabling it to effectively manage the variable income properties and these are actively used to enhance analysis, forecasting, cost control measures and improve productivity. Reservations Status: Information about the exact reservation status for each given time period and each market segment enables detailed analyses and forecasting. Revenue Management: The use of a Property Management Software system that includes all guest information facilitates effective forecasting and right pricing. Sales and Marketing reviews: Effective use of the sales reporting tools and overview of the statistical data provided by the operating companies on a month-by-month basis and measuring the performance of the various sales teams. Benchmark statistics are made use of to enhance performance by the various management companies. Full balance sheet reviews are undertaken on a monthly basis. The Management Action Plans are continually reviewed at these meetings and re-assessed for relevance and in accordance with the risk management programmes in place at the hotels. Hospitality’s properties are categorised as traditional, conference and properties held for sale. Both the remaining properties held for sale, have F&V leases in place.