The Don Group's share price traded in a narrow band for most of last year - between 20c and 30c. But towards the end of the year, it doubled in a short space of time. As in 2005, it was the best performer in the sector and by quite a wide margin. The share price is very much a penny stock and thus often trades "below the radar screen" of many investors, especially institutional ones.
It's been a frustrating time for investors in The Don Group these past few years but the share price appreciation does suggest that things are coming together for this black-owned and -managed group. The background economy obviously helps, as more people are travelling locally, both on business and for pleasure.
The Don Group employs more than 200 people in its 10 properties and at its head office in northern Johannesburg. Apart from the fact that its employment equity and management structures are beyond reproach, this doesn't mean that the company has left the other elements of the BEE scorecard alone. Though the skills development and preferential procurement scores are reasonable, they're lower than those for Phumelela and Peermont, numbers two and three respectively.
Skills development hasn't been neglected. There's plenty of "on the job" training at The Don, undertaken in the main by a full-time trainer. This seems to be one of the main reasons for the high degree of loyalty that exists at The Don.
The low preferential procurement score seems strange, especially in comparison with its peers in the sector. The Don tries, wherever possible, to source its products and services from BEE suppliers. Nevertheless, it's food for thought and leaves considerable upside potential for The Don in next year's Top Empowerment Companies survey.
The hospitality industry is notorious for people moving around after short stays at companies but The Don Suites seems to have been able to attract and retain good people and thus lessen its "churn" rate. Part of The Don's staff loyalty is due to the fact that, on average, salary packages are above the industry average and have been for many years. Staff know and respect this.
Other benefits include medical aid and a provident fund for all employees.
The philosophy of treating staff well is entrenched in The Don group. "Human capital is the most important component of capital in this business," says CEO Thabiso Tlelai. "Any employee, regardless of their position in the company, can come and see me at any time if they have a problem," he says. "We sit down with all the parties concerned and thrash out the issues there and then."
Human resources manager Nthabiseng Monoko echoes this view: "People are individuals. When we have grievances, we go the extra mile to look for an amicable and specific solution."
General managers at individual hotels are among the most important people in any hospitality operation; the buck stops with them as far as the everyday running of each hotel is concerned.
Many established hotel chains have struggled to find black hotel GMs, but The Don Group has been more successful than most. Admittedly, its base is smaller than most chains but it has 55% black management representation across its portfolio of hotels.
