Jarvis name will go in long-term rebranding plan
Jarvis Hotels admitted for the first time last week that it plans to drop the Jarvis name from individual hotels in the long term.
Last year Jarvis rebranded most of its 67 hotels as Ramada Jarvis, but chief executive Richard Thomason admitted that eventually the Jarvis name, which comes from the group's founder and chairman John Jarvis, would disappear and the hotels would bear just the Ramada sign.
The process has already begun. The company's recently opened hotel in Glasgow is already called just the Ramada Glasgow Airport, while the refurbished hotels in Chester and near Leatherhead, Surrey, are also called simply Ramada. Jarvis struck the deal to adopt the Ramada chain with the brand's owner, Marriott International.
Thomason said: "We are very pragmatic about this and John is not sensitive about losing his name on the hotels. He is perfectly happy with the direction in which things are going."
Thomason added that the Jarvis name would be kept for the time being where it was well known and attracted business, but would eventually be dropped everywhere.
The chief executive made his remarks on the day that Jarvis recorded a savage fall in profits for the most recent financial year.
As with many groups, Jarvis's annual figures reflected a tough year blighted by foot-and-mouth, the 11 September attacks and the economic downturn. Profits fell 42% to £17m on turnover down 8.2% to £162.2m for the year to 30 March. Occupancy was down from 68.8% to 65.5% with average room rate fractionally down at £53.34 against £53.38 last year.
London was particularly badly hit, with a 16% fall in turnover, with the South-east and the Home Counties down 8.4%. Elsewhere things were better, with the M4/M5 corridor even enjoying a 4.3% turnover increase. The Midlands was also slightly up at 1.8%.
In order to cope with the fall in turnover and profits, the group cut costs where it could, including reducing its 5,600 workforce by 400 to 5,200. Most of these jobs were "natural wastage", Thomason said, although there were some redundancies.
Capital expenditure has also been curtailed, and senior executives agreed to a pay freeze.
In a separate move, Jarvis also closed its final-salary pension scheme to new entrants in April. This is in line with many other companies which have changed their pension arrangements because final-salary schemes are expensive to run. Those already in the scheme would be unaffected, Thomason said.
In the 12 weeks since the end of March business had improved and the company was now more optimistic about the rest of the year, Thomason said.
Whereas month-by-month comparisons with last year had been 6-7% down in turnover in the first quarter, this had now fallen to 2%.
"We can't quite get the cigars out yet, but we are getting there," Thomason added.
Jarvis has already started to introduce cluster management at some of its hotels, but at a level below general manager. Each hotel will have its own general manager, but Thomason is putting in place a number of senior section heads below them, in areas such as finance and human resources, who will deal with a number of hotels.
The company also expects to announce more franchise deals with other hotel brand names in the next few weeks. It is understood that Jarvis has been talking to Howard Johnson and Days Inn about putting the brands into some of its motorway hotels.
Some sale-and-leaseback deals could also be on the agenda, in line with Jarvis's intention to own less property and have more management contracts instead.
At present it owns the freehold or leasehold to more than 50 of the 67 hotels it operates, but plans to reduce the proportion of hotels where it owns the bricks and mortar compared with those where it holds contracts to manage.
by David Harris
