Meet the businessman disrupting the local hotel industry
JOHANNESBURG - Marc Wachsberger is one of South Africa's up -and-coming disruptors.
At only 38, Wachsberger, already, has a clear expansion trajectory and vision of doing business that has seen him shake up the traditional hotel industry as he targets the corporate business traveller.
Wachsberger is the managing director of The Capital Hotels and Apartments (The Capital). This week he added The Ivy Villa Hotel & Spa, in Sandton, Gauteng, to his stable of apartment-style hotels.
Since the business started in 2008, it has acquired and offloaded properties.
"In 2008 the global financial hit. There was an oversupply of apartments and an oversupply. People didn't have a choice and had to sell,” he says. "The toughest times represent the best opportunities. I started a business in 2008 when the global financial crisis hit. I've proved it by starting the business at that point in time.”
Wachsberger says his break came in 2008 when the country was planning to host the 2010 Soccer World Cup.
He says he used the opportunity to raise private equity capital from Buffet Consortium to buy distressed hotels.
He bought a bought 20 West for R200 million but sold it for R400m.
Wachsberger says his investment strategy is based on three pillars.
"You have to see it is a tough time, like it is currently,” he says. “Two, grow some big, big balls and you have to trust things will get better. Three, you have to have the balance sheet and the money to do it as invariably in the toughest times no one has money. We have money in the toughest times. Why, because when times are good, we sell."
He says his newest acquisition The Ivy, was bought by Capital in 2012 and sold to Westbrooke Capital Hospitality four years later.
The group has invested R22m in refurbishing the hotel.
He says the group is now buying land to expand nationally.
"We just bought in Nelspruit and Bloemfontein,” he says. “Land that was unavailable two years ago and they were laughing at me. Now we can do deals. The difficult times represent opportunities."
Wachsberger says he is in it for the long run in South Africa as opportunities are incredible.
There are irritations like the Eskom and other SOEs that are gobbling the country’s finances.
But these are not deterrents to not invest.
"In the medium-term all that (President Cyril) Ramaphosa is doing will pay off and we will see a bull cycle. Markets are cyclical"
Wachsberger points to China and the US’s Silicon Valley as examples of entrepreneurship.
He says overseas there is a will right at the top to create incredible learning from a young age, building hard work and the governments support innovation hubs.
"What we have here is copycats. We have innovation hubs, but we don't have the amazing learning at schools. We don't have government funding and real support to be globally competitive innovators."
Wachsberger admits he is a fan of another disruptive entrepreneur, Elon Musk.
He describes Musk as a modern entrepreneur.
"He (Musk) is creating things that are incredible. There are always haters. In the counter-cyclical wave, his share price keeps crashing down as no one believes he will pull it off. Invariably he does and his share price rises. That has happened to him five times. He proves everyone wrong."
He says he reads business books to understand how people like Sam Walton, Raymond Acherman and Warren Buffet became so successful.
He says he has been also reading autobiographies since 16 to help him understand where others made mistakes and use the information for his benefit.
But he warns that while autobiographies give an entrepreneur a foundation, today’s world is different and involves a new way of thinking that encompasses technology.
"Entrepreneurs today need to empower and nurture their people, to fail and learn from their mistakes. In the old days, you would be fired. Now days it is a different culture."
Wachsberger says his team is responsible for The Ivy.
"I arrived here today and saw the hotel for the first time. I was not involved. There are one or two mistakes. They will learn from this. The Capital is growing a hotel group that plans to open four hotels a year. I can't do that by myself. We have a team of 550 people. An entrepreneur today has to empower and nurture teams they work with."
He says Capital has identified 22 hotel opportunities in South Africa.
But the ultimate price is to conque Southern Africa.
" I look forward. I won't look back. I am never satisfied, but I don't want to be greedy. I am excited at the incredible possibilities."