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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Rooms with a due

01 January 2000
Rooms with a due

Wherever a kitchen porter lays his hat may be his home, but if his room happens to be tied to the job, he has to accept that he can never quite get away from his ultimate boss, the general manager. On the other hand, it means the general manager can never really escape from his or her staff.

If they live in, the general manager is responsible for them, on or off duty. It can mean dealing with arguments, anti-social behaviour and even illegal habits.

Many hotels still provide at least some rooms for staff, especially the more junior people who are on lower wages. The proliferation of country and seaside hotels means that some staff have to be accommodated on site. And the chronic skills shortage besieging the industry means that many companies are looking abroad for recruits, who have to be given some sort of roof over their heads, even if only temporarily. Some hotels also prefer a senior manager to live in.


Yet the practice of accommodating staff is in decline, according to the British Hospitality Association, especially since the taxman has started campaigning against benefits in kind, so employees have to pay tax on anything that can be construed as a perk. Anecdotal evidence suggests that fewer people are living in now than were doing so 10 years ago.

"People are now fairly well paid in the industry and they are looking to get on the property ladder at a younger age, or they simply want their privacy, so the number of live-in jobs is falling," believes Phil Phillips, technical services manager at the BHA.

Accommodation often consists of rooms in a shared house or flat. Most of this is pretty basic, but it can still represent a high cost to the hotel.

The 110-bedroom Tylney Hall in Rotherwick, Hampshire, has spent more than £1m in the past three years building two new blocks of plush staff accommodation, which had to be in keeping with the listed status of the hall. It now has 48 rooms on site for employees and a further 10 for management.

Eastwell Manor in Boughton Lees, near Ashford in Kent, recently spent £80,000 refurbishing its staff accommodation. It now offers rooms to 10 of its 38 full-time staff. "We wanted good staff accommodation so we can attract the best people," explains Graham Rothwell, general manager of the 23-bedroom hotel. "You must have accommodation to recruit and retain the right calibre of staff, especially if your hotel is in a rural setting."

Hotel and brewery company Adnams & Co in Southwold, Suffolk, has just opened its new staff block. The company spent £150,000 to convert one of its pubs into 10 en suite rooms, with a communal kitchen, lounge and laundry. It already had 21 rooms in four other properties.

"It is a heavy cost and not just in building terms," says Dudley Clarke, general manager of the three Adnams hotels, which provide a total of 68 letting rooms. "There are other expenses such as administration, cleaning and laundry charges. We accommodate 31 out of 103 staff but, if you want to operate, you have to."

Many of the local residents in and around Southwold are retired people, making it difficult for the company to recruit locally. Clarke adds: "We have to look further afield. A big emphasis of our business is food. We employ 21 chefs, all of whom had to relocate to Southwold."

Cost effective rooms

Kerry Turner, general manager of Ockendon Manor in Cucksfield, agrees that supplying rooms is expensive but he reckons it is cost effective. "It means more stability in the workforce," he says, "and that saves time and money not having to constantly recruit."

The alternative for many hotels would be to ferry staff around between the different shifts, as few junior staff could afford their own cars. But of course, if a hotel was to provide company transport, it would mean taking on a vehicle and another member of staff.

Most hotels charge their staff for accommodation, although it is often a token amount. "We charge £10 a week, which helps cover the cost and upkeep of the premises. We don't want to take it out of their wages, because paying helps the younger ones develop a sense of responsibility," says John Topham, co-owner of the General Tarleton outside Knaresborough and the Angel at Hetton. "Of course, at such a low rate, you never have enough accommodation. We encourage staff to move out after two years."

Other hotels will deduct a set amount at source. A maid living in may be paid £2,000 less than a colleague living out. "It comes no way near to covering the cost of providing accommodation," says Ken Sharp, general manager of Langshott Manor, at Horley in Surrey, "it is simply a business expense, and essential to attract staff."

However, companies must be careful about where they stand with the Inland Revenue. Accommodation could be seen as a benefit in kind and therefore taxable - unless the company can prove that staff need the accommodation to do their jobs.

Tylney Hall reduces the salaries of those living in, to cover the cost of room and keep. "We organise it so that each department has an equal number of staff living in to cover rotas, sickness and holidays," explains food and beverage manager Graeme Wallis. "We also house the kitchen and waiting staff, who do split shifts and long hours, so they have less travelling to do, and all our foreign staff."

Split shifts and remoteness can all add weight to an argument against paying tax.

And the expense of providing accommodation can be legitimately written off against tax as a business expense. "There are different taxes that accommodation could fall under, besides basic running costs," explains chartered accountant Gary Harding, from Newman & Co in Potters Bar, Hertfordshire. "Construction costs could be covered by capital gains or under a writing-down allowance."

It's just as well that staff housing can be offset against tax, because it is costly. However, it is still seen as a major recruitment tool. Tylney Hall has seen its staff turnover drop by 10-15% since it opened its staff facilities, and many other hotels can argue that remoteness makes it imperative to offer housing.

The alternative is to pay higher wages, and that could quickly outstrip the cost of providing accommodation.

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