Tim and Kit Kemp on their seventh property the Haymarket Hotel
You might wonder how many super-chic, five-star hotels one family-run company could sustain in London, but for Tim and Kit Kemp, owners of Firmdale Hotels, the market is still hot. They've just opened their seventh property, the 50-bedroom Haymarket, in the West End, and they're back out there hunting for more sites.
"It's hugely vibrant in London," Tim says. "We're looking at two or three sites at the moment, including another West End site for 110 rooms."
With the £55m-annual turnover company enjoying such steady growth, it's perhaps no surprise that they also recently announced plans to open a hotel in New York next year.
Their strategy to date has been to develop one hotel at a time, so work on the New York site didn't start until 1 May - the day that the Haymarket opened. The New York hotel is expected to open in November 2008 (see page 24) - as always, Tim will do the number-crunching and development while Kit works her magic on the interior design.
"This is all about not spreading ourselves too thinly. You have to do the research first," Tim says.
And this he does. Tim started off in the property business - part of the Kemps' business is still developing houses and apartments - and experience has taught him that in the highly competitive London market it's more effective to find sites himself. He also tends to avoid hotel sites, so three of Firmdale's properties have been a hospital, multi-storey car park and dental warehouse.
"We don't outsource," Tim explains. "Unlike many companies, we are our own contractor - we build our own hotels. And because we are the main contractor we don't get ripped off."
The Haymarket Hotel had been offices that had lain empty since a fire in 2002. The Regency building cost £32m to develop and is projected to turn over £10m a year, with average achieved room rates of £270 in year one.
Like the rest of the portfolio, the Haymarket has been designed by Kit. Anyone who has already dropped into the hotel will find a chic, urban property with an eclectic mix of modern and antique styles, bespoke furnishings and original art. And although some of the rooms carry a hot pink and acid green colour scheme, there is a nod to traditional style (see opposite).
Firmdale, of course, helped pioneer trendy boutique hotels. When the company started in 1985, London's five-star hotels were pretty much confined to Park Lane and thereabouts, but the Kemps' vision has helped to spread them around London. When the couple opened their first hotel, Dorset Square, in Marylebone, the only other boutique property in London was Anoushka Hempel's Blakes hotel. Their lead was subsequently followed by the likes of Gordon Campbell Gray's One Aldwych and Christina Ong's Halkin and Metropolitan hotels and the rest is history.
The company makes £5.9m a year profit, but with £196.5m of assets in Firmdale the banks are more than willing to lend for new projects - a far cry from the days when 14 banks turned them down for finance to open the Covent Garden Hotel in 1994. Tim recently hedged his interest exposure for the next 20 years - and he wishes he had done it earlier.
So with seven hotels now opened in London and their first planned for New York, how has Firmdale Hotels evolved?
"We've got a bigger budget, better buildings, more interesting locations," explains Tim.
The style has evolved, too. Every hotel is different, but in general there has been a move away from the country house style of Dorset Square (now sold) towards the slick decor of the Soho and chic-ness of Haymarket.
"We want to be cutting edge," Tim says. "Each time we bear in mind the practicalities and anticipate guests' needs."
A high proportion of Firmdale's guests are from the USA - and from the more glamorous industries. The Covent Garden Hotel, for instance, attracts A-list film stars, while the Soho Hotel pulls in the music industry. Notably, despite the poor rate of exchange for Americans, the hotels haven't suffered.
"The dollar is an issue but at our price level we haven't seen a reduction in US clients. It must be difficult for three- and four-star hotels, though," Tim says.
That might explain why the Kemps seem to be content to grow their luxury portfolio, but have no plans to launch a different brand at a lower price level.
To exceed guest expectations, Firmdale provides intensive staff training. And as with everything else, this is done in house through one of the three operational offices. Similarly, sales and accounts are centralised because Tim reasons that hotel managers must be good with people, but it does not follow that they will be good at accounts.
"We have a central source for that, which gives me better control and makes sure the product isn't getting away," Tim adds.
Like many successful businessmen, he's a stickler for detail. Advancements in technology over the past five to 10 years mean Tim can stay close to the business even while he travels. In fact, he's just finished reading his e-mails when he takes my call from his car in Florida.
"I know they are ordering brollies for the hotel," he says. "It sounds silly, but I want to make sure we have the right style."
As a designer, Kit's preoccupation is housekeeping - clearly, a hotel that can command up to £2,250 for a two-bedroom suite has to maintain its standards. There is, therefore, a huge reinvestment programme in refurbishment and maintenance. Some 20% of stock is done every year, representing millions of pounds, not just to maintain the furnishings but to upgrade them - all carried out by a buildings team overseen by Tim.
"The main thing is to maintain and renovate and redo a hotel. When hoteliers don't do that the hotel gradually goes downhill," Kit says. "And if you listen to the accounts department, you will never spend what is required."
Who knows what Tim might make of that - although the beauty of the couple's working relationship is that their areas of responsibility don't overlap much. And most of the management team has been with the company for years. "We know what we want. There is no need for time-wasting meetings," Tim says.
And here's a thought: "We don't do it for money," Tim says. "We try to get the product right… and the money flows."
The reception area at the Haymarket Hotel (above) features a large stainless steel sculpture by Tony Cragg and black and white paintings by John Virtue
Factfile… The Haymarket hotel
1 Suffolk Place, London SW1Y 4BP Tel: 020 7470 4000 www.haymarkethotel.com
Owners: Tim and Kit Kemp
No of rooms: 50 plus a townhouse
Cost of development: £32m (including £7m lease premium)
Projected average achieved room rate: year one, £270 year two, £300
Projected average spend in the restaurant: lunch £45 dinner £65
Projected turnover of the hotel: £10m
Facilities: Brumus restaurant and bar the Shooting Gallery (a private dining room seating 80) private events rooms 18-metre swimming pool with bar, lounge, music and lighting system gym beauty treatment room
Firmdale Hotels
Annual turnover: £55m (current forecast)
Investment in New York property: £30m (first of several hotels planned)
Portfolio: the Haymarket Hotel the Soho Hotel the Charlotte Street Hotel the Covent Garden Hotel the Knightsbridge Hotel the Pelham Hotel Number Sixteen
Restaurants: Brumus Refuel Oscar Brasserie Max Kemps
Kit Kemp on the spot
Designing The Haymarket
Why did you start Firmdale?
We wanted to do something glamorous. Not a large chain. We have been steady and gone from one project to the next but never have more than one at a time.
What is it that drives you?
I want each hotel to be our design. Compared with a highly stylised contemporary look, an individual hotel is harder to do. It can't be done by the big boys. My designs tend to change while I am working, according to factors such as how the light comes in through the windows.
Why is design so important?
Today's guests can be picky and fashion conscious - and they have seen it all. A cross-section of people are the life-blood of a hotel and you want them to return.
So you're hot on refurbishment
Yes, freshness is important to get return guests. I come in and notice everything. I'm a designer but one aspect to hotels is housekeeping. The main refurbishment time for us is January to Easter when we usually do about 14 rooms in each hotel. It's often worth changing the whole design. We will change rooms every three or four years.
Don't you worry about damage to the art and antiques?
If you work from that point you may as well be a Thistle hotel. If you don't give people quality they will trash it.
Which hotels do you admire?
Places such as Hotel du Palais in Biarritz - I love the space.
Designing the Haymarket
The Kemps have invested £32m redeveloping the John Nash Regency buildings in Suffolk Place to provide 50 bedrooms and suites. Instead of shoehorning rooms into the Grade II-listed buildings, they have given all the rooms comfortable proportions.
In a first for Firmdale, the company has also developed a next-door townhouse, which is available at £4,500 a night - and was booked before the hotel even opened. One room floats either as part of the townhouse or as part of the suite next door. All the suites have dressing rooms, which are lined in dark denim or pinstriped materials.
Colour schemes run through from gentle sages to hot pink and acid green, and while the feel is modern it could be described as a pastiche on the past.
Although the restaurant, Brumus, will undoubtedly attract non-residents, the drawing room provides a haven where guests can retire and make use of the honesty bar. Indeed, the Kemps criticise hotels that use the public rooms as a showcase and neglect the private areas.
One of their main bugbears is that some of the most glamorous hotels provide boring "designer formula" bedrooms. Firmdale is different. The overall feel is the same, but each bedroom has a different colour scheme with hand-picked antiques and original artwork. This keeps return guests interested. Everything from the sofas to the TV stands are either made or adapted to Kit's specifications, while modern needs have been thought out - for instance, there are points to plug in mobiles right next to the bed.
Original reports suggested that the hotel would be open by April 2006, but the couple decided to use the 10,000sq ft space in the basement for a swimming pool, which meant an underground river had to be diverted.
The pool area is sheer glamour. Grey stone, fibre-optic lighting, white bar and gold leather sofas complete the look. Behind the scenes there is a state-of-the-art sound system. Tim got the idea from ekeing out a living in nightclubs in the South of France - the idea being that the pool area can be used for cocktail parties, dancing, presentations, a nightclub or "anything" for up to 300 people.
The pool is instead of a screen room - Firmdale already provides private screening rooms at Charlotte Street, Soho House and Covent Garden hotels. In New York, however, they'll take the technology further with a 100-seat screen room that will have a link to the bedrooms.
New York
The Kemps' first New York property, which is in the heart of SoHo between Prince and Spring streets, is currently a vacant parking lot, but it is scheduled to open as the 100-bedroom Crosby Street Hotel on 1 November 2008.
Kit admits that they did look at Edinburgh and Milan, but says New York was the obvious choice - not least because the bulk of their regular guests in London come from there.
"New York is the only other city that has the same business levels every month of the year and days of the week as London," Tim adds. "If you get the hotel right [in New York] you know it will be full."
The other important factor was to find a property that wasn't going to cost a premium before renovation, which is partly why other British cities were discounted. The total investment to build will be about £30m. Dollar rates make the project particularly attractive. Firmdale has found it's easier to get sites in New York compared with London, where the property market is more developed.
Tim has been spending four or five days every five or six weeks over in the Big Apple to monitor the ground works, get the building priced up and the planning done. However, unlike the London hotels, they have employed a main contractor. The Kemps will stay close to the product and to that end Carrie Wick, Firmdale operations director, who opened Charlotte Street, Knightsbridge, Soho, and Haymarket, will launch it.
Design-wise, Kit says she hasn't the remotest idea what it will look like. She does, however, betray an interest in the style of New York's loft apartments.
Firmdale Hotels
Annual turnover: £55m (current financial year forecast)
Expected investment in New York property: £25m (first of several hotels planned)
Portfolio: the Haymarket hotel the Soho Hotel, Charlotte Street Hotel, Covent Garden Hotel, Knightsbridge Hotel, the Pelham Hotel and Number Sixteen
Restaurants: Brumus, Refuel, Oscar, Brasserie Max and Kemps
