A partnership opened way for Rutaro

“Life is full of luck, like getting dealt a good hand, or simply by being in the right place at the right time,” writes American novelist, Jessica Sorensen. Gerald Rutaro’s luck came when his wife, Hellen Baguma asked if he could pick up her clients from Entebbe International Airport.
Havar Bauck and Endre Opdal were running a telecom business and Baguma was their salesperson in Vyke Communications, a Norwegian startup offering cheap mobile calls, but with different technology, and good traction.

He responded in the affirmative and headed there and picked them. They were into the hospitality business too, under HotelOnline, a company that digitises hotel operations and distributions in Sub Saharan Africa under Savannah Sunrise Ltd.

“Even with the best business models, scaling a startup requires money. In the beginning, we scaled almost exclusively based on our cash flow. To accelerate the growth pace, we eventually raised some money from some individual early-stage investors. In late 2017, we decided to take it one step further. Nobody had done an equity crowd funding in Africa until then, so we broke that barrier in a $250,000 round,” Bauck shares in his biography.

Lady luck 
With the capital and having hit the ground running, they were looking for a partner and Rutaro was ready to join them. 
Then, as an actor, Rutaro had a car so his first job was as their driver. It would take a toll on them flying in every week into Uganda to make sales and go back to Nairobi.

“So, from driving I pitched to them that I could handle some of their sales to hotels. It was not easy but I believe in one thing, the hotel business is how you want to be treated so that’s the idea I used to pitch and get business,” explains Rutaro, more commonly known as a stage actor and director of the Fun Factory comedy outfit.

Bauck and Opdal started HotelOnline in 2014 based on the success of a side hustle. In 2013, they were two college-mates from Norway who 10 years after college, found themselves living in the same neighbourhood in Nairobi, the capital city of Kenya.

“We were always discussing business ideas and we saw a gap in the market because there were no budget hotels next to Jomo Kenyatta International Airport (JKIA) yet it was one of the major aviation hubs in Eastern Africa. We leased some budget apartments next to the airport and started marketing them online as serviced apartments, with free airport transfers,” Bauck explains.

They were filling a void. They were booked from day one at a time when only a handful of hotels in Nairobi had realised the power of online marketing. “There were less than 20 hotels on booking.com in Nairobi at the time. We became the most booked property on booking.com in 2014 in Nairobi. We had more online bookings than the Hilton, InterContinental, and Kempinski. We grew from five to 10 apartments,” says Bauck.

Bauck observes that the hospitality sector hadn’t woken up to the onset of the potential of online marking at the time, so his business partner, Opdal, started selling the knowledge to hotels in the city in order to get more online bookings and make a business out of it.

“The marketing was also volatile because at the time there was Ebola and with western media blowing it out of proportion, it created and affected tourism across Africa. Then came attacks from Al Shabaab. It was tough because there was massive cancellation so we realised that we couldn’t base ourselves on one market so we had to expand,” he recollects.

Rutaro seizes the opportunity 
They decided to venture into Uganda, Rwanda, and a few other markets and that is where Lutaro got an opportunity to join the business partnership. “I got to understand and appreciate that for me to sell a hotel, I needed to give a good experience…the way I want to be treated is how I would make sure a client is treated,” Rutaro explains.

He practices what he preaches. One of the properties under their company’s portfolio is ‘The Africa Tribe’ where Rutaro has taken on a directorial role. He is on his feet for about 18 hours making sure that bookings are streamlined and flawless, the bar and restaurant are independently functional and with respective accounts.

HotelOnline has systemised the booking process in the sense that every payment made, whether physically or through an online booking, is immediately reflected online and a notification is send to his phone.

Managing business 
Now, the business manager has his eyes on tweaking the customer care aspect anchoring on the notion that everyone can sell a bed but hospitality is about delivering a unique experience.

“We have made a decision to re-invest all the money we make from the hotel (Africa Tribe) to make upgrades and improving the customer experience and we will continue doing so because the property has amazing potential,” Rutaro further explains, underlining the need to re-invest in order to make meaningful profits from the hospitality facility.
At the moment, the company has more than 6,000 hotels in 27 markets. In Uganda, it has more than 300 hotels. During the lockdown, as a result of the Covid-19 pandemic, the online company acquired a former competitor- Africa Booking.
“We had had our eyes on them for a while and saw the opportunity to acquire them and through them, a lot of partnerships. The way we run business is we deliver a digitisation package to hotels of management, including revenue and pricing,” Bauck adds.

Advice 
Commenting about the pandemic disruptions, Rutaro says these are the best times to start a business. “You actually see where you are coming from and keep hope alive. When we took over management of the hotel, we turned to social media marketing and before long, clients were making bookings. Of course, weekdays are sometimes bad and we are flexible. Why would I stick to $100 when I am empty? Go low and make some little money, maybe it will run your overhead costs,” he argues.

Bauck makes a rejoinder, “The mistake many hotels make is not being flexible with their prices. What every hotelier should know is that the most expensive rooms are empty ones. It doesn’t matter how cheap you sell a room if the alternative is to have it empty. If you have a guest who can pay enough to cover water, electricity, and housekeeping, give it to them. He will eat, have a few drinks at the bar, spa, saloon. You don’t just stay at the hotel, you spend.”
And further to the tenets of running a hotel business, Rutaro says the right partner matters. He validates that by the argument of a hotel listing online and the traction Online Travel Agencies (OTAs) bring to its ranking and managing brand equity.

“Hoteliers should know that listing your hotel on top of booking a platform is not enough to guarantee you booking. You need a partner that knows how to fish out those OTAs, manage your brand in terms of reviews and all. Have a team that knows you or take you through, step by step,” he further argues. To someone looking at making an investment in the hospitality sector, Rutaro says do not look at it as a business investment but immerse your soul in it, more as a passion.

“If you have the passion for it, you will actually go the extra journey to do crazy things to make your business work. If you have passion, you will want your rooms to uniquely stand out. A room is not just a room, it should have a plan,” he advises.
“A hotel can be a good investment. Very few people have passion and money. Some will look at it as real estate and you can look for a team that will run it that way. Location, then, becomes key.”

On the partners’ wish list, is to create restaurants with experiences of a recognisable menu and concept with uniform culinary precision and delivery in hotel partners.
Rutaro is a graduate of industrial fine art and design while Bauck studied business and economics. 

“My life changed beyond recognition in 2002 when, straight out of college, I landed in Nairobi for what was supposed to be a one-year internship exchange programme. Since then, I have kept travelling back and forth on the African continent, and in the world in general. During those years, I have also lived in Lagos in Nigeria and was about to move to Kinshasa in 2015,” Bauck narrates. And as American author and activist, Helen Keller would have it, alone we can do so little, together we can do so much.

Tips for starting hotel business
An entrepreneur is always on the lookout for their next opportunity. Business opportunities can come at any time, and when they see the right one, they are ready to tackle the challenge head-on.
 
Those entrepreneurs that have strong hospitality traits make them perfect candidates for opening a hotel business.
Opening a hotel goes beyond having a building with a bunch of rooms and charging people to check-in. It’s one of the big things that make hotels different from hosting an Airbnb. A hotel is a sanctuary for the tired traveller.

It should be a place that guests feel comfortable and can relax when they are in their room. If you are the type of person that thrives on helping others and known as the ultimate host, you would be the ideal person to open a hotel. 

Best hotels 
The best hotels are focused on the guests. Your reputation as a hotel relies on the satisfaction of the people that stay there. In the modern age of online reviews, anyone can go online to say anything they want – positive and negative – about any business. The truth of the matter is that someone will be more likely to be vocal about a negative experience than a positive one. The best hotels realise this and do everything they can to make sure that nobody has a negative experience, and happy guests are so thrilled they can’t help but leave a positive review.

What makes a Successful Hotel?
Location: Travellers are looking for something convenient – either close to top attractions or travel hubs like airports and the interstate. 

Amenities: Hotel amenities play a huge role in the success of the business. Depending on the hotel’s target customer personal, this could be things ranging from a pool, complimentary breakfast, dog-friendly rooms, wine-tasting hours, business amenities, and more. Not only do great hotel amenities lead to recurring guests and positive customer experiences, it gives marketing teams weapons to promote their hotel and sales team new channels for ancillary revenue.

Cleanliness: A basic but crucial component of a hotel’s success is general hygiene. A dirty and unclean room is a hotel’s PR nightmare.
Friendliness: Small things go a long way for guests. Remember, your customers are here for a vacation or business trip – and want to feel at home. Hiring the right team members to staff your hotel is the first step to creating a foundation of friendliness in your business.

Safety: Similar to location, the area around the hotel plays a role in the safety of your customers. If guests are worried about what else might be going on in the area, it will make it harder for them to relax. Nothing ruins a vacation more than trying to fall asleep to the sound of oncoming police sirens.

Start with a plan
All good businesses start with a plan. You need to have an idea of what market you are entering before making any significant commitments. 

If you are not familiar with working at a hotel, start by diving deep into learning as much as you can about the hospitality industry as possible.  Learn the ins and outs of what makes a hotel successful, figure out what the best hotels do well and what the bad hotels did poorly. 
Learn about your target markets and identify what your audience looks like. You should know what type of people will stay in your hotel and consider what you can do to attract them to your business.

Consider how you will attract clients to your business. A marketing plan will help bring your clients into the door to keep your rooms booked. Marketing is an ongoing process, but as you develop your initial business plan, you will need to add a marketing plan to bring awareness to your opening.

Choose your hotel Identity
There are many types of hotels. Depending on what style of hotel you decide on, some of your business decisions will be different.

Boutique hotels are smaller and often have a unique characteristic to them. They may be in a historic building or may have been converted from another business. 
Family hotels are focused on what they have to offer the entire household. These hotels typically have larger rooms, extra beds, and swimming pools, and are often located close to family attractions, like theme parks. 

Budget hotels have lower rates on their rooms, but with that comes a lower quality of stay. The build quality of budget hotels isn’t always the greatest, and guests might be able to hear noises between the walls. Budget hotels typically scale back the amenities to pass the savings on to the customer. 

On the opposite end of the spectrum, luxury hotels are the four and five-star hotels that have high price tags. However, in exchange for the hefty rates, guests receive top-notch service and access to conveniences that aren’t generally received at lower value hotels. Luxury hotels will typically have room service, spas, a concierge, anything to make a stay feel closer to home.

Picking the style of your hotel will impact the rest of your business decisions. It isn’t very easy to transition from one type of hotel to another, so do plenty of research before you commit to a decision.

Secure funding
With a well thought out plan and strategy, it should not be hard to secure the funding needed to start your hotel. There are many options in doing so that can help you get cash flow to help you build your dream.

A business loan will likely be the first start of your funding. This can be tricky and will have many factors that the bank will consider. If you are unsure of your qualifications, it would be recommended to have some professional guidance on the best ways to get approved for a loan.

While loans are not the only option, they will probably be your best bet for getting funding. However, if you’re exploring other options, it might be worthwhile to look into venture capitalists, angel investors, crowdsourcing, and even pitching in some of your own money. If you’re determined and have a great plan, there will be a way to obtain funding. 

Hire and train staff
You won’t be able to run your business all by yourself. Running a hotel takes a team of employees to manage the day to day duties while you’re busy making the big picture decisions. Your staff will need to work at the front desk, clean the rooms, valet parking (if you plan to offer it), room service, concierge, and other managers to oversee the employees. 

Remember to look for employees that you think exemplify the traits that you feel are most important to your hotel. 
Your employees are a reflection of your brand and will be the ones interacting with customers on a day to day basis. They must portray the company in a way that you think is best.
—Source: 2ndkitchen.com