The innkeeper's story
Paul Whittome, proprietor of the Hoste Arms in Burnham Market, Norfolk, regards himself as an innkeeper, not a publican. For many the two terms may appear synonymous, but Whittome sees a subtle distinction between an inn and a pub with rooms. "Rooms are often seen as an adjunct, an additional revenue stream which ticks over but is rarely subject to any investment," he claims.
In the Hoste Arms rooms are spacious, lovingly restored, and as important a part of the business as food and drink, even though they contribute only 30% of total revenue.
It's this distinction which Whittome believes helped culminate in turnover last year of £1.7m for the 19-bedroom property combined with 80% average annual occupancy despite the seasonality of the market.
According to the original 16th-century definition a publican was someone who served drink as a secondary job, often out of a front room. An innkeeper was the host of an operation which offered accommodation, food and drink for locals as well as passing travellers.
Being an innkeeper means adopting the role of "master of the house". Every evening Whittome makes a point of circulating around the tables taking time to talk to diners as well as looking after the interests of locals drinking at the bar.
Whittome bought the Hoste Arms freehold in 1989 for £425,000, borrowing all the money from the bank. It was in a bad way. "It had suffered a century of brewery architectural abuse and was full of horrendous plastic themes such as Ye Olde Captain Sir William Hoste," says Whittome.
No instant success
But despite the location of Burnham Market, an upmarket village highly sought after by people retiring from London, the Hoste Arms was not an instant success. Turnover in year one was just £200,000 which, coupled with a further £200,000 spent on general refurbishment and establishing the first eight rooms, resulted in a loss of £50,000. At the time Whittome was still pursuing other business interests, and was not often at the Hoste. But when he looked at the figures after year one he decided that the only way to make the Hoste work was to take over the management himself.
Whittome was a newcomer to the industry and did not know anything about hospitality. Over a three-year period he travelled around the UK visiting 300 establishments, and pinpointing what he liked about them. This tour formed the influences behind the Hoste Arms. They include London's The Ivy and Tamarind restaurants; The Seafood Restaurant in Padstow, Cornwall; and Morston Hall, Morston, Norfolk.
From this selection the new image of the Hoste Arms was born. As well as upmarket bedrooms, the inn has an informal restaurant where ties are not necessary and customers do not talk in whispers. There is also a cosy bar serving good ales and an extensive list of wines by the glass to accommodate the needs of locals. The overall result is a good-quality hotel with an informal pub atmosphere where bubble-and-squeak and foie gras are happy menu partners.
Once he had hit on his formula, Whittome removed everything from the Hoste which did not fit in, uncompromising in his vision even if it meant deviating from profitability. One example was the removal of a salad bar, a hang-up from the brewery days. "It hurt to take it away because it made me a lot of money. But I knew it wasn't part of what I wanted to achieve," he says.
The formula worked. In year two turnover rose to £500,000 with a £60,000 profit. In the three years that followed it rose steadily to £690,000, £790,000 and £900,000 respectively.
But although turnover was on the up, corresponding costs and in particular high wage percentages meant margins were slim. Gross profit on the bar was only 50%, and 55% on food. At one point wage costs amounted to 32% of turnover.
Whittome decided to make his staff more accountable. Rebecca Mackenzie was appointed general manager and Stephen David became head chef. Bonuses are now paid monthly rather than annually in a bid to maintain loyalty throughout the year. Typical targets include maintaining an average wage percentage of 25%, a gross profit on drink of 63% and 65% on food. The latter forms only a small part of the overall bonus to avoid the situation where chefs give smaller portions to meet targets.
As a result of making everyone more accountable, Whittome managed to shave £80,000 from his wage bill over two years. Some of this was general attrition with staff leaving. But a lot of the bottom-line success was down to better planning, such as staggering the start times of waiting staff.
Bullying in the kitchen
There were blips. In the mid-1990s, Whittome noticed the cheerfulness of staff which he had worked so hard to achieve noticeably decline. He soon found out why. Bullying in the kitchen was having a detrimental effect on the mood of the business. The culprit was quickly dismissed and now bullying in any part of the business is a sackable offence.
Also high on Whittome's agenda is to fulfil the needs of the local market. In an area as seasonal as north Norfolk this is critical to the lifeblood of the business. It would be tempting to go all out for the tourist season of May to October, but Whittome views this as short-term greed for no long-term gain.
Of the 135 seats in the restaurant, 20 are always kept back for locals, even during peak season. Whittome says he is often criticised for this by holidaymakers who know the Hoste Arms by reputation and are keen to try it out. But he is resolute that locals must come first. The result is that during February the Hoste Arms can do two-thirds of its September trade, compared with an average of 25% for the area as a whole.
The Hoste Arms is not standing still, either. A £230,000 extension by the end of 1998 will bring bedroom capacity to 26 and bring total spend on the operation since 1989 to £1m. Paul Whittome can now sit back and leave the day-to-day running of the operation to general manager Rebecca Mackenzie and head chef Stephen David. Most satisfying is that even after this extension Whittome's borrowings of £550,000 are the same today as they were in 1989.
