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ECONOMIC AND EMPLOYMENT SPIN-OFFS FROM OVERSEAS GUESTHOUSE INVESTORS

Foreigners who purchase property in South Africa in order to relocate often launch new businesses here, thereby creating job opportunities while injecting much-needed capital investment into the country.
 
"Such immigrants often make the decision to relocate after spending a holiday in South Africa, and as many hail from a successful but hectic corporate background, they seek a more relaxed lifestyle," says Peter Bruil, a director of Pam Golding Lodges & Guesthouses (PGLAG) – a division of Pam Golding Hospitality.
 
"As a result, they tend to look to purchase a hospitality establishment such as a guesthouse or lodge – acquiring comfortable owner's accommodation as well as a lucrative business. Generally they look for property with spacious grounds, with areas such as Somerset West, Stellenbosch and Franschhoek in the Cape Winelands and upmarket Constantia in Cape Town the most preferred areas.
 
"We see interest from those from a wide variety of European countries, but predominantly from Holland, Germany, Italy, England, Sweden, Belgium and Switzerland. The economic crisis in Europe has made the outlook for many corporates bleak and with South Africa in the global spotlight in 2010 - and offering affordable and viable opportunities - former executives are taking the decision to follow their dreams of owning a successful guesthouse in Africa," says Bruil.
 
"The potential for realising this goal is very positive," says Leonard Brewer, who is also a director of PGLAG. "South Africa's tourism statistics show this is still an under-visited destination compared to many other long haul tourist centres in the world. Coming off a very low base in 1994, our tourism sector has experienced healthy growth over the past 14 years, boosted by a government which has had the vision to recognise the potential and injected new life into the industry via a tourism investment incentive scheme."
 
A good example of a success story is that of Paul and Marjolein Langeveld who moved from Holland to South Africa about seven years ago after several years in Beijing, representing a large Dutch catering company. A year prior to settling in South Africa they were holidaying in the Western Cape and decided that was the part of the world they thought surpassed many other possible destinations in terms of natural beauty, opportunity, climate, space and a more relaxed attitude towards business and life in general. After careful consideration they eventually decided that Somerset West was the location offering the most value for money while meeting the above criteria.
 
Since relocating to South Africa Paul Langeveld has developed and established two guesthouse businesses in Somerset West, the second of which was sold by PGLAG to a German investor. Langeveld is currently busy developing a third guesthouse business in Gordon's Bay, backed by a consortium of Dutch investors who have realised the potential South Africa has to offer. Each time he embarks on a new project, the scale is larger and more capital is injected and more jobs created. The foreign investment brought in to date by Langeveld's operations is approximately R27 million and has resulted in full time employment for 10 South African citizens, with the Gordon's Bay guesthouse to employ a further five local staff.
 
PGLAG is ideally placed to advise foreigners wishing to relocate to South Africa, for both Bruil, fellow director Leonard Brewer and Pam Golding Hospitality CEO Joop Demes are originally from Holland. Bruil, who has broad experience in the hospitality industry having worked in the Marriott Hotel in Amsterdam, managed a hotel in Europe and owned a restaurant in Stellenbosch, moved to South Africa 10 years ago; Brewer, who has lived here for 14 years was originally a banker then purchased a guesthouse in Stellenbosch, while Demes, who has vast experience in the Southern African hotel industry settled in South Africa in 1997. Together they have approximately 48 years of experience in the hospitality industry.
 
Says Brewer: "Having relocated to South Africa ourselves we are well suited to assist those wishing to acquire guesthouses here. We offer a comprehensive range of services for prospective buyers, advising on immigration laws and procedures, legal structuring and establishing a company. We also provide them with business models backed up through empirically collected data in terms of average occupation rates per area and their respective achieved room rates, and we provide direction and contacts for many operational queries.  Running a guesthouse is not rocket science, and as many prospective owners will have experienced hospitality at the receiving end in many forms, they are already aware of the basics of providing good service."
 
Issued by Gaye de Villiers


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