The general manager at Pestana Chelsea Bridge, London, talks to James Stagg about getting revenue to bounce back in 2021 and why cutting rates is not the answer.
You were promoted from director of revenue to general manager in October 2019. A lot has happened since. What were your main preoccupations when you took on the role?
This property is 10 years old. When we opened it was the end of recession, so we had a few good years after that, but revenue dropped in 2015. But the graph started going up again in 2016 and we had a brilliant year for revenue in 2019. So when I took over as GM, I was confident that we were ready to progress. I had my suspicion that we'd have some challenges this year, but I didn't think it would be in the form of a pandemic.
How has your background in revenue management helped in this new role?
Typically, we were doing 90% occupancy. The game here is average daily rate. So I wanted to grow that, which we had seen, and improve gross operating profit. I thought both were achievable, even with Brexit coming next year. It turned out to be quite different.
Now, for the first time in my career, there is little we can do about revenue – whatever knocks on the door, we take. You are paralysed and the emphasis has gone into cost. So having a background in revenue management isn't of great use at the moment. It's all about gaining occupancy and dropping rate, which no revenue manager wants to see.
Have you had to significantly drop rates to attract guests?
I am happy to see that many competitors are holding on to rate. As an industry we have committed to providing the best customer service possible and that comes at a cost. We have to make sure that we do justice to our brands – for Pestana or any other company. It takes years to build a brand and – even though we're all fighting for survival – we can't drop the rate and standards so far that it isn't possible to return to previous levels.
We can't get into a price war. Our competitor is Covid-19 and not each other right now.
We can't get into a price war. Our competitor is Covid-19 and not each other right now
How has the profile of your guests changed with few international travellers?
At this time of year there is usually lots of corporate business. In autumn there are usually plenty of conferences going on and we are a fairly big corporate hotel, so we would be busy Monday to Thursday. But that has reduced and now we're seeing people in their twenties and thirties coming for the weekend.
Have you made any changes to F&B at the hotel since your appointment?
When I started we used to talk about 25%-30% profit in F&B; now if you're making a small profit on it in city centre hotels, you can consider yourself lucky. The reason we have accepted that is because room profitability has increased over the years.
One of the benefits of Covid is you can see the costs of everything that you hadn't analysed so closely before. Once Brexit is done, food costs are likely to be even higher on top of that. We have competition from the likes of Deliveroo and Uber Eats, so we have to remain relevant somehow.
How can you take on the delivery competition?
We see guests ordering food from Deliveroo and collecting it outside the hotel – it's heart-breaking that they haven't given us a chance.
We need to change our F&B offer to cater for this change. We segment our guests, but not when it comes to their food habits. So what we have done – and will continue to do – is more special menus. We're serving pizzas in boxes to take to the room. We also have tablets in the kitchen so that we can tap into the delivery market, too. And it means we can collect more data about eating habits.
F&B is a challenge and will remain a challenge. There were plenty of other things we wanted to try this year, but they'll have to wait until 2021.
What are your hopes for next year?
I'm not forecasting January to March as being any different to the end of this year. We're expecting some growth from April onwards. There is still a question mark over summer, even with a vaccine. We'll be comparing ourselves with the previous month, rather than the previous year, as it's not fair to compare to 2020. I hope to achieve around 60% occupancy by the end of next year – a slow and steady recovery.
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