Kulula creator Gidon Novick thriving in entrepreneurship, opens first hotel

Gidon Novick went into the family business (Comair), left when a major shareholder (Brian Joffe) wanted to change things and then worked for three years as CEO of Vitality and head of digital at global financial services disruptor Discovery. A chartered accountant with an MBA from Kellogg, he escaped the corporate world two years ago. And the man I had breakfast with last week is clearly thriving in the entrepreneurial space. He joined us on Rational Radio to talk about his latest passion, Home* Suite Hotels. – Alec Hogg

Given your background. Have you been asked to go over to South African Airways yet?

South African Airways did you say?

Yeah. Why not. I mean you did a great job at Comair. They need a really good CEO.

It seems like pretty much the worst job – after Eskom I would imagine. I did get a call a few years ago and I guess before one even considers that kind of a job, certain things have to be put in place and one would require the autonomy to make some quite drastic decisions in that organisation. So no, not the world’s most desirable job I would say.

We saw each other last week which was really great – we’ve known each other for many years, from your time at Comair, then you moved on to Discovery and I was surprised you’d been there for three years. You’ve now decided to go off and do the entrepreneurship thing – starting a 12J fund. Just unpack that a little. What is a 12 J fund and what attracted you to it?

First and foremost I had taxable income that I wasn’t that keen to part with for that particular year and the 12J thing popped up which essentially gives an investor a full tax deduction into these 12J vehicles. So I did quite a bit of research, set up a fund without any kind of strategy and got some money from friends and family. Firstly, 12J is all about creating economic growth in the country as well as obviously creating jobs. There are certain sectors that it targets, one of which is the hotel sector. That fitted in quite nicely with my past experience and certainly what I like doing – building new things and dealing with people and customers. But also from an investment and investor point of view, with property being at the core. It ticks a lot of boxes and two or three years later we are building a hotel business.

And the first one’s up in Rosebank. I had breakfast with you, a very good omelet. What’s it called ? The Home* Suite hotel? How big is it? You showed me around but I didn’t count the number of rooms.

Yes. The first hotel in Rosebank has 28 rooms. It’s our proof of concept which is around creating a kind of homely environment, an environment where, particularly business travellers, feel like they’re coming home. We also wanted to create a feeling of sophistication and that’s why we got a top designer in. The guys that designed the slow lounge when I was at Comair. We recruited them – Tonic Design, to create a spectacular kind of environment and interior design which created a feeling of home and a welcome feeling for business travellers. I’m one of those who’s up and down from Cape Town almost on a weekly basis. It really is nice to have a place that you can go back to that feels warm and comfortable.

So how is it different to an Airbnb on the one hand, or to a traditional hotel on the other?

There’s an interesting thing happened around the accommodation world over the last decade or so and this Airbnb phenomenon has a lot of very appealing things about it. It’s often in a homely suburb, it’s got a local kind of feel and you don’t get lost in a big hotel. The flip side from a marketing point of view is that people often feel that it’s a little bit unpredictable, you don’t really know what you’re getting. It may be too intimate sitting and sharing a place – maybe working with your host. We try to take the best of Airbnb which is that homely feeling, that kind of suburban location that includes all the sophistication and amenities of a bigger hotel and the security and all that goes with that. So it’s a blend between the traditional big hotel and the best of an Airbnb.

And the kind of people who’ve booked in? You’ve only been open a couple of months but who’s it appealing to?

The main target is business travellers, people that are independent, that make their own travel decisions and have discretionary budgets. It’s priced slightly higher than a normal four star hotel and targeting people that travel frequency, that want to come back to a place that feels familiar.

So you’ve got the first one in Rosebank. And again your entrepreneurial spirit is telling us that won’t be the last.

We’ve got plans for another five, Rosebank is definitely the most interesting one in the Johannesburg area. We’re going to do one in Sandton – as well as a second one in Rosebank and then we also have a few projects in Cape Town, which, as you know, has gone through quite a rough patch from an economic point of view – a tourism point of view. But that seems to be in recovery. The opportunity is to acquire property in Cape Town at very attractive prices and that’s what we’re doing down there. So over time it will have a national footprint… one at a time.

What about Durbs? Is Durban in the schedule?

Durban is interesting. Umhlanga in particular. The most appealing part of Umhlanga is at the oceanside, not necessarily up at the village. And so we are looking at projects there. We raise capital on an annual cycle – on the 27th of February just before people realise that they have to pay tax. So we get a big flood of capital on an annual basis. Based on that we can take on new projects.