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Elizabeth Mistry reports from this year’s Boutique Hotel and Lifestyle Summit.
Elizabeth Mistry reports from this year’s Boutique Hotel and Lifestyle Summit
Uncertainty over Brexit, competition for sites, the enduring appeal of Manchester and Amsterdam – and the issue of branding properties – or not – were all hotly debated subjects at this week’s Boutique Hotel and Lifestyle Summit.
General managers, owners, investors and hotel management companies packed the event at London’s Montcalm Marble Arch Hotel which opened with a panel of GMs from London and the provinces under the chairmanship of Peter Hancock, without whom no hotel conference would be complete.
The GMs – Eva Mount from The Arch, Melissa Stoman from The Draycott, South Place’s Susanne Traudt and Oliver Williams who recently moved from Limewood to take up his first major GM position at Ellenborough Park just outside Cheltenham, talked frankly about the challenges facing the independent sector.
Flying in the face of recent figures claiming a rise in visitors numbers to the capital, the three London-based GMs spoke of the effort needed to maintain good occupancy, especially in the light of recent tragic events in mainland Europe and elsewhere.
Stoman, whose hotel is popular with guests from North America, admitted that terror attacks on this side of the Atlantic and the forthcoming elections in the United States have hit leisure arrivals, particularly “Our Canadian business after Bruxelles”.
Eva Mount noted the market is “very soft” and that “there is a lot more choice out there” but took comfort from the loyalty of her regular clientele “who come back to us because we are always with our guests, they get to see me or my deputy, and they know the doormen”.
That personal touch, she emphasised is what her guests like “and I don’t think we should lose sight of that. Particularly now, we need to be assuring loyalty, reminding guests it is better to book direct, especially those who may not know that a pre-paid reservation can’t be as flexible.”
Traudt, who recently stepped up from overall charge of F&B (during which time the hotel’s flagship restaurant won its first Michelin star) to the top position at DandD’s first London hotel project, agreed. South Place – which has exceptionally strong corporate business during the week – saw an “immediate” knock on effect. The big challenge in the light of the attacks in Belgium and France she said, is “to remain attractive for leisure business”.
Outside London, Oliver Williams finds “planes falling out of the sky” has had less of an impact on bookings. Recently brought in from Limewood where he was deputy GM for Robin Hutson and David Elton’s flagship UK property, Williams says Ellenborough Park – run for its private owners by Michels and Taylor –Â is starting to find its place in the world. Since his arrival he has stabilised the average room rate and got to grips with the property’s guest profile which is currently 70 to 80 per cent domestic – though he says his next challenge is to broaden its appeal to markets abroad.
He is more concerned about navigating the OTA market and the entry of Google into the direct booking fray. The market for online bookings is so cut-throat you “can find yourself competing against yourself online,” said Williams. “There’s a lot of online interplay and commercial battling going on,” he observed.
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But all the panel agreed that OTAs are, as Stoman said, “a necessary evil” and that while they can play an important role, a change in the relationship balance is needed.
The next panel ‘Brands vs Independents’ moved the focus from operation to representation with four speakers from established brands, including Bespoke Hotels, a UK operator that has hoovered up a number of smaller brands into its eclectic mix of independently owned standalone properties. The Bespoke umbrella includes a clutch of recently acquired properties operating under the Hallmark brand, as well as one of Manchester’s most talked about openings of recent years, Hotel Gotham.
Nick Turner, recently named as managing director for Bespoke International, spoke about soft branding which Bespoke has done successfully by keeping a step or three behind the individual identity of each of its managed properties – so much so that it is unlikely the average customer would be aware that it was part of the Bespoke family, something especially true of The Gotham which has created a distinct story, which Turner clearly hopes will lend itself to becoming almost a sub brand in itself – thus making it an attractive option to potential partners.
The addition of an owner on the panel might have seen a slightly different discussion but Preferred’s Philipp Weghmann, IHG’s Andrew Shaw and Charlestowne Hotel’s Larry Spelts all agreed on the importance of getting the right fit between owner and brand with Spelts stressing the importance of ensuring a potential partner has previous experience of working with the boutique or lifestyle sector.
“Ask yourself if they have the ability to deal with the specific distribution requirements – the content and revenue management – that an independent needs?”
Shaw, now overseeing UK and Irelanmd development for IHG’s lifestyle brands Kimpton – which it acquired last year and is yet to roll out in the UK – and Hotel Indigo, which will see a fourth property open next month in Edinburgh and another two in the UK around Q4 this year – highlighted the possibilities for F&B offerings which, he said had proved to be destinations in their own right. Previous Indigos have franchised F&B out to Marco Pierre White’s operations but owners have a number of options, he added.
Weghmann said size does matter and that it was vital to match your property to the correct market mix – anything upwards of 100 rooms he thought, may well be looking to incorporate a MICE element.
The audience, which included a number of owners as well as representatives from other brands including Best Western’s newly appointed director of hotel services, Mirelle Maunder Brown found this “a great opportunity to listen and understand differing perspectives”.
For Maunder-Brown, the talk around “soft branding” had added relevance in the light of the recent roll out of Best Western’s Premier Collection brand, aimed at “supporting” independents.
Finally the panel issued a warning on loyalty programmes, raising the often overlooked issue of over redemption. Making sure you don’t end up on the wrong side of the loyalty game was a key takeaway for any independent thinking of going down the branded route.
One owner who bought a branded property and then went through a pretty torrid hotel ‘divorce’ was Simon Lewis who told the warts-and-all tale of how he realised his property in Palm Beach, Florida, wasn’t realising its potential under the Ritz Carlton banner.
“We weren’t the right owner for the brand and the brand wasn’t right for the owner” he told the Summit audience, many of whom, unaware of US employment law listened horrified as he said that when he ended the agreement he also effectively lost his entire staff who all had contracts with the brand which – Florida – was able to terminate their employment on the spot. It was a salutary lesson as applied to independents.
The panel which brought together owners and investors gave an excellent snapshot into how the current uncertainty over whether the UK will remain in the European Union or not is impacting on the market.
Patron Capital’s Camil Yazbeck cut to the chase explaining that “our whole business model is based on exit” and expressed his hope that the vote will go in favour of the status quo. “Hopefully we are still in Europe next month,” he said adding that more certainty about the long term – not too mention the geopolitical risks – would see investors coming back to London “to do more deals”.
Michael Hehn, whose Ruby Hotels have rolled out in Austria and Germany, is also hopeful of a vote to stay in the EU, which would help as he looks for more conversion-friendly sites (including in the UK) for his particular brand of lean luxury.
If that does happen, suggested Cedar Capital’s Phil Golding, the sector could see a busy Q4 once people have had time for the news to sink in and then return from the summer break.
Chair Russell Kett of HVS reminded the audience of the importance of low rates and the current cost of debt, recalling his prediction two years ago that “hoteliers should put something by, but in the end nothing changed”. Golding concurred, pointing out that without something to fall back on, any leveraged-based business banking on a continued low rates “will be destroyed” if things do change.
The lean luxury model came to the fore in the afternoon panel chaired by Verve Hospitality’s Mark Britton Jones. Two owners, each with just one standalone property in the capital, Jallal Al-Yawer who opened Hotel Xanadu in Ealing, and Serena von der Heyde, who is the third generation proprietor of the Georgian House Hotel, discussed the how the definition of luxury has changed over the years. Both owners thought their guests wouldn’t recognise the term – or identify with it. “It is the sort of thing I might say when speaking to finance people,” said Al-Yawer who is currently planning a second property.
Von der Heyde noted that luxury is now as unique as each guest profile. Her five-floor hotel doesn’t have a lift, “but we do have a porter because guests like that”, she said.
And in a timely intervention, just weeks after one hotel brand announced the roll out of robot concierges, Al-Yawer spoke of how he prided himself on “always having a human available at the front desk”. “True boutique properties have the luxury to offer this,” he told the audience, while also being able to offer an express check out to those who preferred a different option.
While Al Yawer is a relative newcomer with what some might call old fashioned values, two longstanding industry veterans brought the day to a close.
Robin Sheppard, chairman of Bespoke Hotels, recounted how he had told his disapproving mother that when he entered the industry, he thought it “had potential”. Now with over 200 properties in the UK and abroad, he feels he may have been proved correct. He clearly thinks there is still plenty of potential to be explored – along with the untapped market for guests with disabilities; Bespoke recently announced a prize for hotel design incorporating best practice when it comes to hotels offering state of the art accessibility to guests with disabilities both seen and unseen.
Ramesh Arora, managing director of The Montcalm Luxury Hotels, clearly agrees the sector is healthy and having been an observer of the London hotel property scene for almost 20 years he notes that land has never lost its value. This from a man lucky enough to be custodian of a group of several properties in the centre of one of the world’s busiest cities.
Overall there was – concerns over Brexit aside – a quietly cautious feeling that the boutique and lifestyle sector has not yet reached a tipping point – or that the business cycle has quite peaked – and that the UK and the international market has room for both expansion and –Â if the product is carefully matched and due dilligence is done – new entrants.Â
Serena Von der Heyde of Georgian House spoke for many when she told Boutique Hotel News that the multicultural nature of London is part of its attraction and that the flow of business, labour and leisure contributes to the lifeblood of her boutique hotel. Independents and multiples will be watching to see if this is still the case over the next few months.
