> Hotel And Urban Regeneration

Hotel And Urban Regeneration

It is a universal truth that cities ebb and flow, enjoying good times and bad times.  Look at Johannesburg, where the CBD degenerated into a no-go zone, having once been a proud, thriving place.  Look also at Lagos, where the original city, Lagos Island has, behind the frontline of skyscrapers housing mostly banks, become a huge street market.

But look again at Johannesburg.  The CBD is not what it was 10 years ago, with massive regeneration underway.  Look also at the Hatfield area of Pretoria, where The Fields project has arrested the urban decay that was threatening to escalate, and is now in its second phase.

Both the Johannesburg CBD and Hatfield projects include hotels, and the chicken-and-egg question has been asked – can a hotel development be the catalyst of urban regeneration, or does the process have to start first, to create an environment in which the hotel will prosper?

The answer, of course, is never a simple yes or no, but on balance, I believe that a hotel cannot be developed in isolation, in the hope that others will follow.  The reason is, I believe, that urban renewal needs something of a “big bang” to get things going, and that needs public sector involvement and political will.  Sometimes, but not always, government funding is also required.

Urban renewal is not only about renovating or redeveloping run-down areas and buildings, it is also about creating a new community.  Most areas which have suffered from urban degradation have also experienced a collapse of the social structure, as the retail sector moves to the suburbs, residential units are abandoned, and the office tenants move to safer climes.

To create a community, you need social infrastructure to come in at around the same time, and it is noticeable that most urban regeneration projects incorporate mixed-use developments.  The first phase of The Fields project in Hatfield comprised residential apartments, shopping and prime-grade office space, as well as a Protea Hotel.  The second phase comprises more office space, and a second hotel, the 184 room City Lodge.

Each component feeds off each other, with the sum greater than the parts.  Looking specifically at the hotel components, it is highly doubtful that they could survive on their own, without the demand generated by the office users for accommodation

during the week, the local residents for the food and beverage facilities, and the visiting sports teams and other leisure groups at weekends.

Down in Johannesburg CBD, one of the first projects to get going was the city's main bus terminal, Gandhi Square.  But not on its own.  Transportation is vital if a city centre is to become alive again, but it is also the activity around the transport nodes that are important – Gandhi Square is also the location of multiple shops and restaurants.  Dubbed a “central improvement district” by Gerald Olitzki, the man credited with the Gandhi Square project, it has been a catalyst to show what can be done, that the streets can indeed be reclaimed, and that it is safe for other developers to come back into the centre.

One step at a time.  With the transportation sorted out, the offices started to come back.  They, and the bus station, created demand for shops and restaurants, which made the area a more attractive place to live, and residential apartments were developed.

Redevelopment seems not to be confined to just one area, but has a ripple effect – on the southern fringe of the Johannesburg CBD is Stimela Square, where another mixed-use project is underway, comprising office, retail and a hotel, arranged around a city garden square, once again embracing the concept of community, not just commercial development.

In Braamfontein, the opening of the Gautrain Station has itself been the catalyst for the Braampark development, already the location of various prestigious companies, as well as various government agencies and parastatals such as the South African Human Rights Commission – a strategy for government support to regeneration without the need for taxpayer support.  Where offices go, hotels will always follow.

I mentioned Lagos Island as requiring regeneration, particularly as, like the Johannesburg CBD of old, it is completely dead at night.  There are no hotels in Lagos Island at all, and only low income housing and informal retailers.  Sadly, there don’t appear to be either the entrepreneurs nor the political will to do much about the place.  I have always believed that a hotel would do really well here, at a midscale level catering to office workers and their visitors, with an assuredly-thriving food and beverage operation, particularly in the early evening

One hotelier is already taking the plunge, not yet in Lagos (although they have definite plans to be there), but in central Johannesburg.  Lonrho have announced that the first easyHotel in Africa will be developed on the corner of Rissik Street and Pritchard Street.  Ewan Cameron, CEO of Lonrho Hotels commented “we see the easyHotel Johannesburg as part of the regeneration of this important area, benefiting from but also contributing to the success of other developers in reclaiming the area”.  Would he have been a pioneer, and gone in there without the other office, retail and

other developments there?  “We need the critical mass of other businesses, and of residents, to make a hotel a success”.

In the US, urban regeneration has often been driven by public sector spending, on such landmark development as sports stadia and convention centres.  Hotels and other businesses follow, because these facilities are intended to be catalysts for other, private sector developments, and the jobs that they bring.  But that’s in the US, where public funds are available (or at least they used to be), and where the private sector had the capacity to contribute to the development of these mega-projects, through the likes of bed taxes and other levies (that these developments often bankrupted the local governments is another story!).

In Africa, government rarely has the resources to undertake the superstructure of urban regeneration itself, and can contribute the most through the provision of transport infrastructure, along the lines of what Lagos State is doing with its light railway schemes, concessionary deals on land, and tax breaks.  In Johannesburg, private sector developers who constructed new buildings in designated zones had a tax break of 20 per cent in the first year, followed by 5 per cent for 16 years.  In recognition that there is considerable value in keeping some old buildings, companies undertaking renovation had a 20 per cent, 5 year tax break.  Given that without private sector intervention, the city centres would almost certainly remain unwanted and unloved, the cost to the government is zero, but there are the benefits of job creation, a reduction in crime and social disorder and, of course, happier voters!

Down there in downtown Johannesburg where, without a doubt, angels feared to tread for many years, it is now possible to take a guided walking tour of the area.  In the beginning, tourists used to ask “is it safe to do this”.  Now they say “show us what’s new”!  Increasingly, that’s the new hotels that are bringing back the life, and improving people’s lives.

Trevor Ward

W Hospitality Group, Lagos



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