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Three-star trick

The news – broken by Caterer last week – that the Forte name is being removed from Posthouse by Granada Compass is just one aspect of a radical reshaping of Posthouse and its role in the three-star hotel market.

While there is a widely held view that the three-star market is in terminal decline and customers are migrating down to lodge or up to four-star, the management team at Posthouse disagrees and beams at the way rival hotel groups such as Thistle are exiting the three-star market. Far from leaving it, Posthouse is investing £50m a year in the three-star market, such is its confidence.

Patrick Dempsey, managing director of Posthouse, rattles off figures to explain: “There are 84 million roomnights a year in this industry, the midmarket is still 56% of the hotel business, and there is a bed shortage in the three-star market. Does that sound like a dead business?”

Coinciding with the shortening of the brand name to Posthouse is a change of corporate colour. The dated bright red associated with Posthouse signage has been darkened into a soft burgundy colour. All marketing material is now going out in this colour and all external hotel signage is being changed.

Dempsey is adamant that Posthouse will stay rooted in the three-star market, but in the next few weeks it plans to roll out a sub-brand called Posthouse Premier. A target hasn’t been set, but many will be converted from existing Posthouses in city centre and airport locations. The bedrooms and lounge areas will be upgraded and there will be a better restaurant offer. In fact, they will offer most of the facilities of four-stars, but at a lower room rate. Dempsey makes no secret of the thinking behind Posthouse Premier: “We want the city-centre customer, who expects to stay in a four-star hotel and pay those prices, to stay in Posthouse and get the same standard with a Posthouse price.”

He denies they are creeping through the back door into the four-star market with Posthouse Premier. “We don’t want to exceed expectation, we want to meet it. Call it three-star plus, but definitely not at four-star prices. We will charge what the customer is prepared to pay for the product.”

This is a covert rejection of the policy instigated in the early 1990s when Posthouse was under Forte management and a universal room rate throughout the estate was charged. Although Dempsey was part of the Forte hotel management team in those years, his difficulty with this one-price idea is plain. “That didn’t make sense. As well as the operational costs of each unit being different, it made some room rates in busy locations look silly.”

Posthouse Premier launches in the next few weeks with the opening of the newly built, 170-bedroom Belfast Posthouse, to be followed by the upgrading and renaming of the Posthouses in Edinburgh, London Regent’s Park, London Bloomsbury and the Crest at Heathrow Airport, which will also signal the end of Crest as a UK hotel brand.

The time when every Posthouse room was not only the same price but the same room specification is also going. A bedroom upgrade called superior is being rolled out, which includes contemporary furnishing, a work desk with modem point, and extra television channels. The upgrade to a superior room is just £20, but is forecast to generate £4m of additional revenue in the current financial year.

Conference and training business is being addressed by a concept called the Academy, currently in 17 Posthouses. There is a separate entrance from the hotel, and each conference room is self-contained, but all lead into a central refreshment and reception area.

While corporate branding, market positioning and bedroom specification are cornerstones of the Posthouse evolution, it is in the area of food that the greatest change has come.

In the early 1990s Posthouse kitchens focused on convenience food with heavy use of boil-in-the-bag frozen food, and there were nine restaurant brands that collectively were underperforming. On being appointed managing director of Posthouse in 1998, Dempsey ordered a complete rethink on Posthouse food.

While Traders is still the name above the restaurant door at 20 Posthouses, Dempsey admits it is nearing the end of its useful life as a restaurant brand. He looks to the new restaurant concepts now appearing in Posthouse as the way ahead.

One of two new main restaurant themes being developed is Rôtisserie. As the name implies, this is a restaurant with an open-view kitchen built around a rôtisserie. Decor is bright and modern, and prices are accessible to both staying guests and walk-in customers. There is a £10 three-course offer, and main courses from the rôtisserie average £12.

The other main restaurant brand being promoted in Posthouse is Junction. This is vogue bistro-brasserie food in a relaxed setting, with main-course dishes such as pumpkin and pecorino ravioli, and grilled bass fillet on a potato fritter, priced at around the £13 mark.

While these are concepts for the primary restaurant in a Posthouse, there is a roll-out of secondary restaurants in hotels where customer volume can support two restaurants. Sampans, an Asian concept, is in four high-traffic Posthouses, offering Chinese, Thai and Malay dishes and with Asian cooks in the kitchen.

Yet where Posthouse has really turned heads is in the link-up with Marco Pierre White. While there is already a connection between White and the four- and five-star London hotel business of Granada Compass, the announcement in September that the Hampstead Posthouse was to host the brand’s first MPW Brasserie suggested either Marco or Posthouse had taken a serious turn in food attitude.

The answer, says Dempsey, is that it is Posthouse which has changed. “Marco is completely involved. It’s not a publicity thing. He is in the kitchen every week checking, training, making sure that what carries his name carries his standards,” says Dempsey.

The impact of White on the food revenues of the Hampstead Posthouse have been dramatic. From the restaurant turning over £10,000 a week in pre-White days, the Posthouse MPW Brasserie is currently grossing £32,000 a week.

This is all impressive stuff, but there is the not insignificant matter that everyone knows that Posthouse, along with all the other hotels owned by Granada Compass, is up for sale. Isn’t the thought of change demotivating? Dempsey shakes his head. “We are focused on what we are doing and we are not frightened of change. What do you think we have been doing for the last two years if it hasn’t been going through change?”



High Holborn, London

Tel: 020 7301 2000

Hotels: 79

Bedrooms: 12,500

Share of three-star market: 20%

Investment in development: £50m a year

Source: Caterer & Hotelkeeper magazine, 26 October – 1 November 2000

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