In a major boost for tourism in Nelson Mandela Bay, Port Elizabeth's Auspex properties on Tuesday finalised a deal with international hotel operators Rezidor to operate the R320-million hotel.

The hotel, Reef on Marine, will become part of the international group's Radisson brand, and will now be called Radisson Port Elizabeth.

Auspex property chief executive officer Ben Nyaumwe said the reason he had chosen the Rezidor group, from a number of interested international hotel chains, was because of their "high service orientation".

Nyaumwe also said that he felt the hotel group would offer better synergies between their Cape Town-based Radisson hotel and the Port Elizabeth one, than other groups could offer.

Rezidor group business development director for Africa Andrew McLachlan said South Africa held vast opportunities to grow the Radisson brand and Port Elizabeth, being a major location, was well suited to the company's expansion plans.

"We've got Cape Town on the one end of the Garden Route and we felt the market was right and ripe for a first class Radisson hotel at the other end, in Port Elizabeth".

The management agreement between the two companies is structured for 15 years, renewable three times for a period of five years each.

Nyaumwe said big projects like Coega and Port Elizabeth's status as a World Cup host would see growth in tourism continue in a stronger upward trend than ever before.

Construction has already begun on the site, with bulk earthworks currently on the go. Nyaumwe said full construction would begin on May 1, with the first visitors scheduled to arrive in December 2008.

McLachlan and Nyaumwe however disagree on initial occupancy rates, with McLachlan cautiously saying "I believe the hotel will be well received and we will have recorded an occupancy rate of above 50% in our first financial year". Nyaumwe however has set his sights much higher stating "I believe we will fill the hotel up before we've even opened its doors".

Nelson Mandela Bay Tourism chief executive officer Fezikile Tshiwula said the hotel would focus on a gap in the current tourism market.

"There has been a serious challenge for Port Elizabeth in servicing the top end of the market," he said.

The Rezidor group owns nearly 300 hotels in more than 50 countries. Other brands in their collection cover the luxury market with Regent and Missoni, as well as other markets through Park Inn and Country Inn.

McLachlan said that for expansion into the South African market, the Radisson and Park Inn brands were being targeted.

The company, of Scandinavian origin, started operating in 1960.

Owned by Swedish national carrier SAS airlines, the hotel group expanded into routes where the airline flew.

The company listed on the Stockholm stock exchange last year.

Eastern Province Herald