Gang warfare
INDEPENDENT hotels are facing a broadside from a set of high-rolling, well-financed opponents.The invasion of the big, mainly US brand names has gathered pace over the past year as small groups and prestige properties have been picked off by well-funded real estate investment trusts such as Patriot American Hospitality and Blackstone Hotel Acquisitions.
Gleneagles in Scotland is currently weighing up bids from the likes of Patriot, Blackstone, Starwood Hotels & Resorts and Bass Hotels & Resorts. Earlier this year, the Savoy fell into the hands of Blackstone for a mere £743,000 per room - perhaps putting the question of survival foremost in many independent hoteliers' minds. The high-value deal brought to an end the Wontner family's rule at the Savoy, although of course Granada had held 68% of its A shares since the Forte takeover. But still, for many, it marked the end of an era.
In a year of acquisitions and mergers - such as Inter-Continental being bought by Bass and Westin by Starwood - the sole hotel standing on its own seems to be a dying breed. Growing numbers of branded lodges have been springing up at motorway service areas, while budget hotels have been battling in inner-city London on price and facilities. Big brands have continued to expand, such as Marriott through its partnership with Whitbread, and Choice International has finally put its heart into the deal with Friendly Hotels to spread its name across the UK. Home-grown names such as Forte, Stakis and Swallow continue their march into the farthest reaches of the countryside.
Catch up
Shabby, down-at-heel two- to three-star hotels, where investment has been scarce for the past few years, cannot afford to ignore the arrival of these new warriors. It's time to catch up, spruce up or give up.
Independent hotels can see traditional markets being threatened. The shiny brand-new budget property down the road can lead to customers abandoning the independent hotelier. Those astute hoteliers, however, have been constructing their own defences in the form of marketing and/or buying consortia to build up mass muscle.
Justin Baird-Murray, managing director of the 122-bedroom Metropole in Llandrindod Wells, Powys, believes that independents are an essential part of the marketplace. But, as a sector, the independents face additional difficulties that the chains do not, the foremost among them being staff recruitment.
"There is not the perceived network or advantages. There's no corporate ladder," says Baird-Murray. He combats the problem of attracting quality hotel staff to what some might think of as a remote location by actively recruiting local people, who obviously have already made the choice that this is where they want to live. The Metropole has invested in staff facilities and promotes standards programmes such as Investors in People, financial bonuses and opportunities to follow NVQs.
Baird-Murray firmly believes that if he treats his staff to such advantages they will want to stay - and that is half the battle. When it comes to staff eventually wanting to move up and out, the hotel will even help them find another job, he says.
The Metropole is a member of the Best Western consortium and benefits from being featured in the Getaways brochure, which Baird-Murray believes is "as good as anything the chains put out".
Consortia are an essential part of the independents' armoury, he believes. "If you are not part of a consortium," he says, "you are not on the boat." The benefits of consortium membership range from guest loyalty programmes to the opportunity to discuss industry trends with other members. At a recent Best Western regional meeting, members heard from the British Hospitality Association about the working hours directive - the kind of invaluable briefing that the absolute independent would miss out on, says Baird-Murray.
Nigel Embry, chief executive of Best Western UK, says that individuals with their minds on their own operations often fail to see threats on the horizon. "If you get a group of people together, they acknowledge change," he says. "If you are on your own, it is quite difficult sometimes."
Budget hotels such as Travel Inn have forced independents to assess their own facilities and standards to see if they are competing, says Embry.
One of the biggest challenges for small businesses is finding the level of investment to keep up with the services that large chains can easily carve out of the budget. The hotel industry has not been slow to see the Internet as both a potential advertising hoarding and as a potential source of direct sales. With the low cost of electronic mail and Web sites, it has proved a useful vehicle for independents to keep up with the challenge of the big brands. For example, it is now possible for a Japanese or Australian guest to book a room via the Internet in the middle of the night through the Web site of a hotel situated in the remotest part of Wales.
Investment
Many members of consortia have looked to their groups to provide the investment for the kind of Internet billboard needed to attract attention. Members of Best Western have had no problem joining the Internet revolution: Best Western has a huge Web site, where all member hotels are featured. Embry says that although an individual hotel's Web site can get lost in the maze that is the Internet, the huge Best Western site, with its good signposting and its well-known name, cannot be ignored. He points to the Internet as one way consortia can prove to be invaluable.
Embry is well aware of how the hotel branding map is changing. In the past year he has seen more than 10 members disappear following buy-ups by Stakis and Swallow. In their place, Best Western has added 20 more hotels, taking the total to 226, up from 183 in 1993.
But it is not just the large consortia which are using the Internet. In the middle of rural Devon, near Okehampton, Sue and James Murray, proprietors of Lewtrenchard Manor, are wide awake to technological changes. Their tiny, nine-bedroom hotel has just opened its own Web site and in a matter of days picked up four bookings. This might have something to do with the preponderance of US guests, about 25% of the total.
"Some Americans come as often as three times a year," says Sue Murray. Lewtrenchard Manor is a member of the Pride of Britain consortium which is actively promoted in the USA. Word of mouth does work in their favour, too, but guest numbers build much more slowly from this method. Part of the mission of independent hotels such as this is to build an unforgettable experience, tempting guests to return. The historic, 17th-century manor already has its distinctive appearance on its side.
He believes that the face of independents is changing rapidly as they join consortia, and hotels of the 1990s will find it almost impossible to survive if they don't. "Very few people don't belong to any of them," he says.
Finding the cash for extensions, improvements and keeping up standards is a challenge that independents face without the handy back-up of huge company bank balances to draw on, according to Rhatigan. "A quality balance sheet will always add to its ability to attract its marketplace," he says.
Marketing also draws capital, but Rhatigan sees the need for independents to be clear about who their customers are and, once they are identified, to concentrate on them. "Marketing is much more important if you have an individual message," he says. Others echo his reliance on marketing and PR.
Huge global brands attract business executives, or even first-time visitors, as an easy choice. If these guests are comfortable with the brand, they believe they will receive a certain level of service and facilities.
Saturation of marketing and high-profile locations seal brand names such as Hilton, Hyatt and Novotel into the public's consciousness. Rhatigan believes there is little point in independents competing for that one-off stay - they have to appeal to customers with something different, and offer something more sophisticated or developed.
Consort Hotels' purchasing power has made a difference for Crieff Hydro, the 221-bedroom hotel in Perthshire. As a member of Consort, it is able to take advantage of bulk-deal prices that are negotiated on behalf of all its hotels. Consort also offers central billing. Meanwhile, general manager Chris Dalton revels in the freedom of running a one-off hotel. As a former Queens Moat Houses employee, he has seen the other side of the industry and prefers his present position.
Susannah Donne, director of sales for consortium Prima Hotels, believes that one of its powers is to take away onerous tasks from overworked hoteliers. Prima sorts out application forms and information for its 150 members to be listed in the large business travel agencies' hotel directories. It also organises international sales calls and representation at travel conferences, such as ITB in Berlin.
For independents with a strong grasp of innovation and individuality, the future still looks bright. However, without the support of a network or a group of like-minded hoteliers, the opposition will be hard to beat. n
