Case study: How Matfen Hall acheives staff turnover of just 8%

23 March 2006
Case study: How Matfen Hall acheives staff turnover of just 8%

David Hunter knows builders and brides don't mix. So it was a brave move, as director and general manager of Matfen Hall in Northumberland, to stay open to everyone - including wedding parties - while undertaking £4.5m-worth of building work.

However, Hunter made sure no couples exchanged their vows to the accompanying sound of drilling. "We got the road sweepers in every Saturday and made sure the builders were off-site," he says. "We managed to get through without too many hiccups and no reduced rates."

It made sound sense to resist the temptation to discount, since weddings are central to Matfen Hall's business and account for 40% of rooms and F&B revenue. Indeed, 164 couples tied the knot in the Great Hall last year.

Even so, to stay open and to continue to operate professionally despite the noise, mess and delays of building is one illustration of the calibre of Matfen Hall's management team and staff.

Since opening in 1999, the hotel has won four awards, including this year's Johansens best hotel venue in UK and Ireland, nominated by customers. The workforce has settled down, with last year's staff turnover at just 8%, compared with a national average of 26% (as found by Horwath Consultants).

The hotel employs 174 full- and part-time staff in its various businesses, which include an
18-hole golf course with its own pub, a restaurant, a shop, and a spa and leisure facility with five treatment rooms and a 16m swimming pool.

Recruitment has become easier since Poland entered the EU, Hunter says, and he now has more than 20 Polish staff working at the hotel. "We used an agency initially," he says, "but now the staff recommend friends or relatives. Their work ethic is excellent; they're well presented and mostly educated to degree level." The hotel provides an English teacher an hour a week to give the Poles extra confidence.

Matfen Hall works closely with Newcastle College to recruit catering and spa staff, and with Hexham High School, whose catering department is using the hotel as a case study on a training CD.

Gaining a reputation through winning awards has also helped in the recruitment stakes. "It means we're the sort of place where people want to work and put on their CV," Hunter says. He lists staff benefits as working in beautiful surroundings, no split shifts, use of golf and leisure facilities for all employees (with free golf lessons thrown in), 25% discounts in the restaurants and spa, and a special B&B rate of £25 per person, or £40 per person DBB.

HR manager Lynne Armstrong recognises that middle-management staff members are often those most in need of training. "You can't assume those who've just been promoted have all the necessary skills," she says. "Man-management is the hardest part of any manager's job."

But she doesn't believe in training for training's sake. "Rather than just stick them on a financial course," she explains, "they may just need specific areas of finance - budget management, how to juggle and be cost-effective. We can deliver in-house training that's specific to our business."

Staff accommodation
Many employees are quite young, and may be away from home for the first time and living in staff accommodation. "They don't have parental support," says Armstrong. "They need to know that, if they need help, there's someone they can turn to here."

The hotel has now established itself as a multifaceted, all-season destination after 2004's refit added 23 new rooms, conference facilities and the spa and leisure business. But its present use was by no means a foregone conclusion.

For 30 years, Matfen Hall was a Cheshire care home for the disabled. When the charity moved out in the early 1990s to relocate to Newcastle upon Tyne, owner Sir Hugh Blackett considered the future of his inherited ancestral home. Even with four children, it was too large and impractical to make a comfortable family home.

So the 1830s mansion was put up for rent, but proposals to turn it into a drug rehabilitation centre, or the prospect of a dodgy developer burning it down to claim the insurance didn't appeal to Blackett. In the end, he bit the bullet and decided to develop the property himself, opening it first as a golf club in 1995 and four years later as a hotel.

"The early days were quite a white-knuckle ride," Blackett recalls. "The management wasn't settled and we had a high turnover of staff. We were heavily geared with the bank and had to do a lot of fire-fighting."

Today, the £4.5m refit has paid off, raising turnover from £2.5m in 2003 to £5.1m last year, leading in turn to good terms with backer the Yorkshire Bank.

The Blacketts take a long-term view, says Hunter, which means that the hotel isn't under the same pressure as a national chain to achieve short-term returns. Private ownership gives more scope for both the owners and management to put their personal stamp on the building and the business, he adds. "So many of these kinds of houses become National Trust properties, and they're not alive, somehow. This is not a museum, with people walking around on a wet Sunday afternoon," he says.

He believes the property's use as a hotel is entirely fitting, and means the building will be in better condition for the next generation. "It wasn't a hotel," he notes, "but it was a country house used for shooting parties and large groups of people being looked after, which is pretty much what we do now."

When it comes to marketing, the team at Matfen Hall shuns scattershot methods in favour of some sharp ideas. When Christmas bookings were looking a bit slow last October, a brainstorming session came up with the following neat promotion - if it snowed on Christmas Day, all guests making bookings over the festive season would win a complimentary two-night spring break. With tent cards in all rooms, a mail shot and coverage in the local press, the hotel was soon full over Christmas and New Year. As it happened, Christmas Day was snow-free.

Most guests (70%) come from within three hours' drive of the hotel, and 35% are repeat guests. Hunter says there's a lot of crossover between the wedding, golf, leisure, conference and spa facets of the business, with wedding guests returning for a spa break, and so on. "The wedding business fills us up at the weekends and the conferences happen during the week," he explains. "We're also very much in the grey market, which tends to come during the week, too. The grey market irons out the peaks and troughs."

Recent sales trips to the USA and Sweden have promoted the hotel to US lovers of the English garden - the world-famous Duchess of Northumberland's gardens are nearby - and to Scandinavian golfers.

As a parting shot, I ask Hunter if there are any tricks a hotelier can employ to increase profitability. He thinks for a minute then says: "I think it's more about getting the basic values right. It doesn't matter how wonderful the location is or how much you spent on the furnishings. If you haven't got the staff right, you're not going to run a successful business."

So this is Hunter's tip for increasing profitability: "Treat your staff as you'd like to be treated, and pay them well. Give them perks so that they're happy, and that will rub off on the business. The guests will realise the staff are happy - and then they'll enjoy their stay as well."

Matfen Hall before and after its £4.5m refit

2003200531 rooms53 roomsRooms sold 4,816 13,627Like-for-like occupancy 77.8% 70.6%Average room rate £78.08 £84.51Room sales £380,000 £1.2mF&B sales £1.3m£2.3mLeisure and golf £820,000 £1.6mTotal sales £2.5m £5.1mPayroll as percentage of turnover 44% 38%Matfen Hall's guide to increasing profitability - Treat your staff as you would like to be treated. - Pay your staff well. - Give staff perks such as free use of leisure facilities, free golf lessons and generous discounts. - Use a good accountant to provide monthly profit-and-loss statement. - Use independent hotel consultant visits once a month. - Establish strong links with local colleges and recruitment agencies. - Use creative and targeted marketing/PR campaigns.
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