Business connections

Principal Hotels

Principal House, 11 Ripon Road, Harrogate, North Yorkshire HG1 2JA

Managing director: Tony Troy

Hotels: 18

Bedrooms: 2,465

IT investment: £4m

Operating profit 1999-2000: £22m forecast

Property management system: Micros Fidelio

Telephone system: Meridian

"Road warrior" David Bartlett taps into his laptop and is immediately linked to head office. There's no need to wait until he's back at the office or to borrow his client's phone to confirm a booking. He can do it with a few clicks on his computer. This is the new age of hotel sales.

Bartlett, as corporate sales manager for the Harrogate-based Principal Hotels group, has nearly 300 clients whom he visits regularly to drum up business for his company. It means he is on the road for four days a week, but new technology means he is constantly in touch with his office.

Bartlett can already check conference availability and will soon be able to make bookings direct.

Technology for hotels in the millennium will involve advanced packages, known as "enterprise solutions", covering all the computing requirements of a hotel with one program, ending the need for lots of different bits of software.

"Hospitality has been wary of new technology," says Sam Anahory, director of customer dynamics at Deloitte Consulting. "But new enterprise solutions are being developed which are customised for hotels."

Changing with the times

In the meantime, Principal Hotels, with 18 properties in the UK and Europe, believes the investment is worth it. This year it is spending £4m on updating its systems.

Principal is also in the process of changing. Just over four years ago it was the subject of a management buyout backed by venture capitalists. Then, operating profit stood at £6.7m. In 1997-98 operating profit was £19.2m, and the group is on target to top £22m in 1998-99. It is a profit growth over the four years of more than 200%, backed by a room rate increase of 12% and a room yield up by 8%.

Principal has also altered its brand beyond recognition. Corporate and conference business is now its paramount focus, with leisure squeezed to weekends. Nearly 65% of its annual turnover comes from business and conference clients. From its original portfolio of 20 hotels, including two in Copenhagen and one in Amsterdam, Principal has sold six and bought a further four. Those left are prime candidates for conferencing and business, such as the 197-bedroom Selsdon Park in Croydon, Surrey, and the 171-bedroom Palace in Manchester.

"We are strong on what our clients want," says Tony Troy, managing director of the group, which now has a total of 2,465 rooms in mainly four-star accommodation. "We offer good locations and excellent facilities."

By the end of the year those facilities will include the latest computer technology, customised especially for hotels. Principal is buying Micros Fidelio's latest package of Windows-based software that will create a network between hotels and head office in Harrogate so that information can be downloaded to the main office and any information it has can be uploaded back to the hotels. Statistics from a hotel's reception can be sent, along with reports from the general manager about food and beverages. And the travelling sales teams from each hotel will be linked to the central computer from their laptops. It means they can check availability on screen while with the client, rather than call back later. Efficient systems suggest an efficient business, Troy believes, and this will impress the type of clients they want.

Integrated systems

But it is not just behind the scenes that Principal is paying for IT. The latest hardware is also being installed at reception.

"The product allows us to integrate the system into the corporate IT infrastructure," explains Clare Snowdon, group systems manager. She has been with Principal for eight years and is now responsible for IT strategy and training for all the staff.

Principal is also wise to the need to capture information on guests to do direct-marketing campaigns. Upgrading the technology will allow the hotel to "warehouse" the necessary data and then "mine" it, to help fill hotels in slow periods, for example. It also means personal likes and dislikes can be kept on record for future use.

"Airlines have been doing it for years," says Troy. "When someone buys a ticket, the airlines gather all the information about that person they can. We should be doing that in the hotel industry."

It is critical for the information to be accurate from the beginning, otherwise it needs to be tidied up, incurring extra expense. So, instead of a guest filling in a card, the receptionist just calls up the information on file. Files will be retained on returning guests, and in theory it should reduce booking-in time.

Guests can also book out from their room, saving time queuing at reception before leaving. And there is flexibility in billing, allowing items to be moved to a separate bill at the touch of a button.

To ensure the conference and business-meeting market increases, Principal is in the process of installing ISDN lines in all of the meeting rooms, while nine hotels are being fitted with Motivator multimedia presentation equipment. This includes a large, interactive screen linked to a computer, with video, liquid-crystal display projector and television. Each hotel also has a business centre offering back-up for conference organisers, and can provide laptops and projectors.

Principal is also installing the Meridian phone system, which allows callers to leave messages for guests who can pick them up even after they have booked out of the hotel. Troy argues that the result of this investment is a group able to host conferences. But what do its clients think?

Katrina Wright, director of Neil Stewart Associates, is one of the UK's largest conference organisers. "It is a conference organiser's dream when a hotel has the latest technology available," she says. "However, new technology is not the prime motive for hiring a venue. It is an added bonus, but the prime reason is size of facilities and location."

Troy is not deterred. He is determined to win the conference client, and in addition to the £4m investment in IT, Principal is spending a further £7m on its existing portfolio. New rooms are being brought on line at Manchester, while Selsdon Park is to have a new conference facility and leisure block.

All will be linked via computers, which means Troy, like Bartlett, can sit in Harrogate and, with the click of a button, see exactly how business is going in all the group's hotels. n