Shire brings back Holmes

by Dominic Walsh

The announcement, just before Christmas, that Terry Holmes is to return to London's Stafford Hotel as director and general manager was greeted with a standing ovation by staff at the 74-bedroom hotel.

Mr Holmes, who successfully ran the Stafford throughout most of the 1970s and 1980s, retakes the reins on 16 January - the date Shire Inns is scheduled to complete a ú16m deal to buy the hotel from Trafalgar House.

After being ousted from the Ritz last May in the wake of Mandarin Oriental's appointment as operator, Mr Holmes had hoped to buy the Stafford himself. But he was eventually persuaded to act as a consultant to the bid team from Shire, which is part of Blackburn brewer Daniel Thwaites.

Trafalgar House veteran Alan FitzGerald, who joined as general manager in December 1991 after five years at the Watergate Hotel in Washington DC, is returning to the USA once the handover takes place.

For Mr Holmes, the chance to return to the establishment where he was named Hotelier of the Year in 1985 was too good to miss. "Father Christmas came early," he said. "And I didn't have to spend my own money!"

And for Shire managing director Ian Harkness the purchase satisfies a long-standing plan to have a hotel in London, though some industry sources considered ú16m a high price to pay.

However, Mr Harkness was quick to dismiss such notions. "It depends on what period you're assessing the value of the business. If you take a medium-term view, say over 10 years, it's a fair price," he said.

"We believe it has significant potential over that period because of the location, the hotel itself and the products and services it offers."

But he was emphatic there were no plans to alter the style of the product: "It is our intention to invest money in the hotel, but we have no intention of substantially changing the business."

He added that, in terms of marketing, it would be kept separate from Shire's eight mainly four-star provincial hotels and would remain a member of the Small Luxury Hotels of the World consortium.

He declined to give any figures on the hotel's performance, though it is understood turnover in the year to September topped £4.5m. Percentage occupancy is believed to have been in the mid-1970s with achieved room rates in excess of £150.

The purchase of the Stafford, which was handled by Christie & Co, should go a long way to compensating Shire for the disappointment it experienced a year ago when a ú9m deal to buy the Four Seasons Hotel in Manchester collapsed at the eleventh hour.

• Terry Holmes is stepping down as chairman of Small Luxury Hotels of the World in February after five years. He will be succeeded by Bill Sharman, president of the Houston-based Lancaster Group. Jonathan Slater of the Chester Grosvenor will become vice-chairman, while Mr Holmes stays on the board.