The next chapter 6 December 2019 Lexington managing director Julia Edmonds on taking the helm at the boutique caterer and her people plans for the future
In this week's issue... The next chapter Lexington managing director Julia Edmonds on taking the helm at the boutique caterer and her people plans for the future
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Northern

01 January 2000
Northern

The timing is perfect. On 29 June, a month after Ireland voted for peace, Stakis will throw open the doors of its hotel on the outskirts of Belfast. The launch will just beat Hilton International's opening of its city-centre hotel in September.

Together, they look set to reap the rewards of peace and corner a market that has largely been avoided by four- and five-star hotel brands, both national and international, throughout the violent Troubles.

Ironically, however, the plans for both were in train before the Stormont agreement was dreamt of. It was in the early 1990s that the Northern Ireland Tourist Board (NITB) pledged a £4.5m grant towards the £18.5m cost of building the 130-bedroom, four-star Stakis Park hotel. Likewise, the EU contributed £6m towards the £23m price-tag on the 195-bedroom, five-star Hilton International.

Some might question the sense of such investments back then, particularly as the region's bloody recent history has kept tourists at bay and Belfast already had stalwart hotels such as the Europa and the Stormont, owned by Hastings, and Holiday Inn Garden Court (see panel). Now, though, it looks as if the gamble will pay off. This is an assumption based on what happened during the earlier ceasefire in 1995, when an influx of tourists earned Northern Ireland £271m.

This subsequently dropped by 8%, however, and excitement this time round is tempered. A spokesman for the NITB cautions: "It's early days. We're confident that the tourist industry will boom. Everything is in place, but it won't be as dramatic as in 1995."

Anything is a bonus for Stakis Park general manager Matthew Mullan, who points out: "The hotel would, and has, gone ahead regardless of the political situation."

Stakis's confidence, like that of Hilton, is based on the fact that - peace or no peace - the region was attracting corporate trade. There are now 40 US companies in Northern Ireland as well as other UK regional offices, and that means demand for accommodation, conferences and functions.

Long before the peace agreement, for instance, the pre-opening sales team at Stakis had secured block bookings from UK blue-chip companies guaranteeing about 30% occupancy for the first three months of trade.

This figure has since risen to 70%, and Mullan acknowledges that the spinoff from the peace agreement will help him achieve projected turnover of £6.5m and target occupancy of 75% in the first year.

In particular, he welcomes potential tourist trade because, according to him, Stakis Park will fill a glaring gap in the leisure sector. Situated at Templepatrick, close to the international airport and 15 minutes' drive from the city centre, he will market the hotel's rural setting, 18-hole golf course and LivingWell health club.

Although the golf course won't be completed until 1999, the hotel is equidistant from the province's two main golf courses at Royal Port Rush and Royal County Down, so in the meantime Mullan will sell it as a base for golfing holidays. And with the Stormont agreement in the bag, he hopes that Americans will now feel confident about buying.

Mullan also feels he has the resources to cope. The dearth of national and international chains in the province means that both Stakis and Hilton have the advantage of introducing state-of-the-art facilities to beat other local hotels in picking up international visitors. For example, at Stakis, besides the health club and 18ft pool, there are seven rooms adapted for disabled people, and five office-equipped bedrooms.

"US companies coming over require these facilities," he says, adding that they are rarely provided in Northern Irish hotels.

Short-break market

The historic lack of tourists has made weekends a traditional bugbear for local businesses, but Mullan now sees his chance to plunder the "huge" short-break market in Britain. "Northern Ireland will tap into that and be a new destination," he says.

The other target for leisure breaks is the Irish Republic. Stakis has opened a hotel in Dublin so the brand is familiar there. It also opens up the possibility of offering tourists a two-centre package - Dublin and Belfast.

Closer to home, Mullan hopes that the leisure facilities will also pull in locals - a customer base on which, until now, and in common with most Northern Irish hoteliers, he thought that he would rely heavily. So far, so good: in the first two weeks of recruiting local members for the health club, the uptake was 150.

Similarly, Mullan expects the hotel restaurants to draw local trade. Average spend for dinner in the 140-seat restaurant is expected to be £18, but there will also be a 60-seat bar-brasserie on the first floor, which will serve less expensive, bistro-style food. "People in Northern Ireland still go to hotels to eat, which is the opposite to England," says Mullan.

He won't ignore conference business, either. Mullan reckons that 30% of it will be residential, with the remainder corporate. The main conference suite seats 500 or holds 350 for a banquet. Corporate delegate rates are £29 a head for eight hours and £129 including VAT for 24-hour single occupancy.

Before peace, Stakis's June opening looked risky because the "marching season" spans July and to some extent August, usually keeping visitors at bay. Disruptive marches could still happen, but the bookings look encouraging. In July, 28% of reservations are leisure-based and in August it's 37% and expected to rise.

This is due in part to the opening offer of £120 for dinner, bed and breakfast for a family of four and £200 including the ferry, compared with rack rates of £99 for a single room and £129 for a double.

It was also helped by the fact that Stakis set aside a pre-opening marketing budget of £250,000, blasting Teletext and UK regional newspapers. Direct mailshots were sent to 20,000 Stakis customers, followed by a telesales blitz by its Birmingham sales office.

While Stakis is focusing on the leisure market, Hilton International leans more heavily towards the corporate. General manager Dagmar Muehle sees business at Hilton as being 70% individual corporate, 15% conferences and meetings, and 15% leisure.

The advantage which Stakis and Hilton have over home-grown hoteliers is that they can tap into their international customer databases. Muehle is thus confident of reaching those markets she has identified - the Republic, the UK, the USA and, to some extent, Germany and The Netherlands.

Neither luxury hotel giant admits to being unnerved by the other's presence in such a small market. "We're pitching at a different market to Stakis - we are five-star, and Stakis is four-star and outside Belfast," says Muehle.

She adds that Hilton is the first international five-star hotel in Northern Ireland and as such has met a need in the Belfast market. The city's other hotel offerings include the 190-bedroom Jurys Inn, which opened near the famously bombed four-star Europa last year and is more budget-focused, charging £59 a night. Holiday Inn Express and Holiday Inn Garden Court similarly fall in to a different market.

Realising the potential, Hilton added an extra floor of bedrooms to the plans last summer, plus a presidential suite. Muehle already has more than £700,000 of bookings for the first 12-14 months, mainly corporate and from the UK. Every Saturday night in November is booked with functions. Muehle is more circumspect than Mullan, however, and in the first year has set an average occupancy target of 60%.

The conference facilities will accommodate 450 delegates theatre-style, 300 at a sit-down banquet and 260 at a dinner dance. There are also meeting rooms. They are still working on the F&B concept, but she sees the 140-seat River Restaurant as being post-Conran style.

Room rack rate will range from £145 for a single to £500 for the presidential suite, but corporate deals will fall between £116 and £130 a night. "This is 10% more than the local competition but we don't want to dump ourselves," says sales director Penny Wilson. Even so, prices are being based upon what could be achieved in Glasgow and Manchester rather than in London. So, corporate coffee breaks are £2 a head, not £5, in line with what the local market would pay.

Marketing spend for the four months before opening is set at £150,000. As the Hilton is slap-bang next to the Waterfront theatre complex, Wilson is also thinking about theatre breaks aimed at the Republic - as well as providing accommodation for performing stars and decision-makers.

One problem that both Stakis and Hilton face is prejudice against Belfast following years of news bulletins on sectarian killings. Both hotels will therefore join forces with other local hoteliers and work with the NITB and Belfast City Council to promote the city. To break down prejudices about Northern Ireland within its own sales team, Hilton brought regional sales directors over from Britain.

Stakis and Hilton can also exploit the familiarity of their brands. "It helps that people have a brand that is familiar to them," says Mullan at Stakis. "It gives confidence to guests."

But Wilson adds: "The key is to sell Belfast as a destination. Hilton inspires confidence - it's a security blanket - but people are not going to come here just to stay at a Hilton."

Belfast's restaurant scene will be featured next month.

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