Guest House ‘competitive co-operation’: a Camps Bay case study


Competitive Cooperation: The Story of How 24 Cape Town Guesthouses Came Together…and Won

by Josiah Mackenzie on December 1, 2009

For the past 11 years, Christiane von Ulmenstein, owner of the Whale Cottage Guest Houses in South Africa, has been doing a very interesting experiment. Instead of trying to beat her competitors in Cape Town, she decided to work with them. The following is the story of why she did it, how she did it, and what the results have been.

There are many ideas here you can use, so I hope you enjoy her story…



“I came from a big corporate environment where there are competitors, you do competitive intelligence, and you try to defeat your competitors. One does not usually consider working with them.

When we started out with the guesthouse we began doing print advertising, because that was the best way get the word out when you are new then. I decided to call a meeting with other guest house owners — we were about 20 at the time. I said let’s get together and have an informal association, which is now called Camps Bay Accommodation Association. (Camps Bay is a suburb of Cape Town.) And everyone was happy with that. We were all kind of new to the guesthouse industry.

We made a few firm rules for it. One of them was to realize the importance of referrals. We were all receiving inquiries, and if you can’t use it, it would be so wasteful to say “We’re sorry, we are fully booked.” So one of the first rules of our association was that if you were full, you had to refer the inquiry to other guesthouses. Our goal was that Camps Bay – as a whole – should get the business, and the business should be retained there. It did not matter if you had friends with other guesthouses and suburbs close by, you need to keep the business in Camps Bay. And it has worked fantastically.

Our guests are amazed, because they feel we offer incredible service as a suburb. Instead of inquiring through one or two websites, they now can have options at 24 different guesthouses. So they can choose in terms of quality of accommodation, and also a range of prices. So our guests have a far wider choice. They think we’re extremely organized!

Organizing the system

patio-bigThe association began as just a referral network, but as we grew we encountered two situations. The first was long-term bookings, where you could see in advance which rooms you have available. And then there was the very real scenario of someone arriving at your guesthouse when you’re full, and you need to send them somewhere else. The process of contacting 24 other guest houses was very time-consuming.

I drew up a template, where each of the members had to e-mail me their availability for the next five days, and I would put everything together and e-mail it to all the members. That was a lot of work, but I didn’t mind doing it because it helped us all know what was available, and helped the members become more efficient.

And then we decided to set up a website: it’s just a general marketing platform for Camps Bay.  The hotels are obviously members, and we have an availability schedule that is now updated automatically. Each member has to update the information on the website using a system we set up.

We have learned how valuable this website is. People are finding out about the area from the website, and it is driving reservations to our member hotels.

How we developed the website

The 24 guesthouses paid for the website ourselves. We did not charge the restaurants or other businesses. We found restaurants are very important part of our guesthouse offering. Every night, the guests want to know a good place to eat, so it’s important to have relationships and recommendations to good restaurants.

Things to do and things to see were provided by the website developer. No one other than the guesthouses paid any money to be included. We don’t accept advertising. It’s purely an informational website, and the content is there to help our potential guests. When people plan to visit Cape Town, we want them to stay in Camps Bay… so this website shows the benefits of our neighborhood. This helps Camps Bay, and it helps each of us individually as well.

How we promoted the website

I’m embarrassed to say we didn’t do any marketing at all at first!  There was a vague attempt to do a blog, but that never materialized for a couple reasons. When we launched the website, blogging was just taking off and none of us really knew what blogging was about.

Now of course, I am very passionate about blogging, but I still find many people in this industry are behind when it comes to social media. So to ask them to write something may have been too much — they would say that they can’t do it.

Since this website is a content website, the large majority of our traffic comes from natural search. When people type in terms related to our area, we tend to rank highly.

Our web designers are a very good company here in South Africa. We chose the best company in the business to design the website so that search engine optimization would be part of the site from the start.

Challenges we had to overcome in launching this.

poolpalm-bigIt’s important to keep it in a tight geographic area. I don’t think I could have done it for all of Cape Town.  But this started off as a suburb which was a quite nice area.

There will always be suspicions. Some guesthouses have one bedroom, some have three, some have five…I’m the largest with 11 rooms. So the level of referrals is not always equal. Guesthouses with one bedroom will not provide the same number of referrals as a larger property. And then there’s always a difference in sophistication of marketing. I am reasonably visible, since I have worked very hard to build my online marketing. So more people find me and I have more to share than the properties that do no marketing. We had to just accept that we would not get an equal level volume from everyone.

You have fixed capacity in a guest house or hotel. You only have so many rooms, and you can’t put them anywhere else. It doesn’t matter if they are your favorite guests that visit you every year… if the dates they want to visit are booked you can’t kick the other guest out. You run the risk of losing referrals if they are happier at another place that they’ve found through the referral system. But that has never stopped us from doing it.

I think the biggest thing is learning to trust each other at the beginning. We all have the same problems, and the same questions. By getting together and discussing things, we can all learn together. People realize how beneficial this is for their business. We’ve become good friends over the course of the past 11 years.

Closing thoughts

For me, it’s a matter of “Give and you will receive.” As with all good things in life, the people that you give to are not always the people that will give back to you. But in the universe there is some power that dictates you will get back for what you give.

So the overflow that you get and pass along to other colleagues benefits everyone. It’s okay to share. It’s okay to give away.


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