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How to turn around a failing hotel

04 May 2012 by
How to turn around a failing hotel

As chairman of Bespoke Hotels, Robin Sheppard heads one of the UK's largest hotel management businesses. He tells Janet Harmer how the company is able to turn around failing hotels and why a serious illness has put his life in perspective

What is the current size and spread of Bespoke Hotels?
We have more than 50 hotels in the UK and eight overseas. The majority of the properties are managed, but we own the leasehold of five. Our growth has been particularly rapid during the recession.

How have challenging economic times helped the company?
Many investors who had taken out expensive lease deals or who borrowed too much on a hotel went bust. As a result, we have been asked by banks and other financial institutions to take over the running of such hotels. In other cases we have been asked by hotel owners to help improve the performance of their businesses, which have struggled during the recession.

How do you manage a hotel when the owners are still present?
For owners who have pride in their hotel, handing over the business to us can be quite painful. It is important that we build up trust with the owners. Often it is best if the owner steps away, but for those who stay, we try to get them to look differently at the hotel.

What is your priority when taking over the management of a hotel and how do you go about making improvements?
Primarily we aim to increase sales and profitability. And to do that, before anything else, we have to set about improving service standards, which is likely to involve the training, coaching and mentoring of staff.

Inevitably we will make changes in the senior management team - often the general manager is too long in the tooth or is the wrong person for the job.

For many independent hotels, marketing can be very difficult and we can instantly increase a property's distribution by introducing them to agents and partners who will drive business to them.

How do you go about making staff changes?
It can be a ghastly process, but it is sometimes necessary to replace certain people in order to move the business forward. It is best to take the difficult decisions quickly as the longer you leave it, the tougher it gets.

Sometimes you have to be really blunt and on a piece of paper draw up a list of the winners and losers in the team on each side. Our immediate task is to see what can be done to stop a hotel haemorrhaging money and often we find it is because the business is overstaffed.

How quickly can you see improvements taking place within a hotel?
Once a hotel is plugged into our distribution system, it can be pretty quick - certainly within six months we expect to see that the business has moved into a more positive direction.

Do you ever take on hotels that you are not able to help?
Unfortunately there are some hotels we can't change or improve - for instance, if the property is in the wrong location. One hotel we took on in the West Country was a good business, but overnight it lost about 40% of its revenue when its best customer - a local company - stopped production. It wasn't just the hotel that suffered; the whole town was decimated.

We tried to reinvent the hotel to provide a leisure offering, but it proved enormously difficult in an industrial town with no charming features. We brought in tour groups and completely changed the business model. It was touch and go, but eventually we succeeded in turning the business around and it was sold on.

What is Bespoke Hotels' greatest strength as a hotel management company?
We're very good at taking hotels at the top end of a three-star or low four-star rating and moving them into the four-star market, and improving the restaurant in a property from one to three rosettes. Making such improvements enables us to add an extra £25 onto the room rate.

Our strength probably stems from the complementary skills that Haydn [Fentum, Bespoke Hotels' chief executive] and I bring to the group. We're like a pantomime horse - we work very well together - with Haydn enjoying the operations and profitability, while I look after the design of the hotels, and sales and marketing.

Personal touches are important in properties run by Bespoke Hotels. What do you try to do?
As well as making the major improvements, it is equally important that we introduce individual touches as soon as possible, such as welcome cards in bedrooms and the cleaning of car windscreens. We also start to keep a guest history record so that we know, for instance, when six pillows are required. These may seem small things, but can make a big difference to a guest's experience.

I also firmly believe that complaint letters should be handled correctly. Hence, we tell all our general managers never to respond to an e-mail complaint with an e-mail - instead, they should pick up the phone and smother the guest with kindness.

Two hoteliers who I have admired very much have always had the personal touch. The late Douglas Barrington showed extraordinary attention to detail at the Lygon Arms, and Kit Chapman will often call his guests from wherever he is to wish them a comfortable stay - something that makes you feel like a million dollars.

Why have you decided not to brand the hotels with the Bespoke name?
Bespoke implies a property that is tailor-made and reflects the niche market in which we operate. It wouldn't make sense to add Bespoke to the name of a hotel as we want the individuality of the property to shine through.

Our portfolio incorporates a real mix of hotels - some are older and set within "chocolate box" style properties in the Cotswolds, while others are cool and trendy and located in city centres.

However, we do believe that we may have an opportunity to introduce a soft brand using Bermondsey Square as the starting point, which we could call B2. It is a hotel that we designed and developed ourselves and are actively looking to do several more, with maybe another two in London, as well as some in cities like Cardiff and Bristol.

What would be the key elements of a B2 branded hotel?
The hotel in Bermondsey could be described as boutique budget with some high quality touches such as Apple Mac TVs in every bedroom and wet rooms with huge Grohe drench showers.

We've introduced a very clever layout into the bedrooms with the bed positioned at an angle across the room and a desk positioned behind it, which creates a greater sense of space and has achieved great reaction.

In the right locations - such as up and coming areas like Bermondsey - we could create five or six B2s. Brick Lane is an area that could do with a hotel like this.

Could Gregg's Table, the new restaurant - serving retro 1970s style food - you recently established with Greg Wallace of BBC TV's MasterChef at the Bermondsey Square hotel, be introduced into other hotels?
It is certainly possible, but it is important that we get the first one right. The concept is great and we are getting fantastic exposure for the restaurant from Gregg's shameless publicity, but there is still a lot of finessing that we need to do with it.

However, the early signs are good - we opened at the end of February and we have already doubled the turnover, compared with the restaurant that was there before.

How did the expansion of Bespoke Hotels abroad come about?
It was really by accident. We took on the first hotel - in Grenada - when the owner asked for our help and it has escalated from there. We now have eight hotels overseas and we expect future expansion overseas will occur where the UK has strong links, such as in the Caribbean, Thailand and Europe.

What has been the highlight of your career?
Setting up Bespoke Hotels and getting it to work in the middle of a recession and winning the 1994 Catey Hotel of the Year for the Bath Spa as the hotel's general manager.

You become seriously ill seven years ago. What happened, and how are you today?
It happened very quickly - it started off with what I thought was flu and then my breathing collapsed. At one point I was completely paralysed and I thought I'd died.

It turned out that I was suffering from Guillain-Barre Syndrome, which affects the peripheral nervous system and can be fatal. The recovery was long and slow - taking over two years - and I had to relearn how to sit, stand and walk.

I still can't write properly, and no longer have a sense of smell or any feeling in my fingertips and toes. I have basically lost all fine motor controls, so I'm hopeless now at doing up a tie, for example.

Being so ill has really put life into perspective for me and everything since then has been a bonus.

What is your vision for the future?
We intend to continue growing Bespoke Hotels through a blend of managed and owned properties - we would like to take on more leaseholds as well as acquire some freeholds. Key openings this year include Wood Norton, near Evesham, which was once occupied by the BBC, and is currently being refurbished.

BESPOKE HOTELS

Number of hotels 58 (50 in the UK, 8 overseas)
Annual turnover £8m
Annual profit £1.2m
Number of staff 1,400 (including 16 in head office in Beaconsfield)
Hotels include 10 Manchester Street in London, Cotswold House Hotel and Spa in Chipping Campden, and the New Ellington in Leeds

ROBIN SHEPPARD CV

Born in Malta, Robin Sheppard has made his mark as a hotelier, restaurateur, entrepreneur and author. He entered the hotel industry at the Adelphi in Liverpool with British Transport Hotels after graduating from Oxford Brookes University.

Over the years he has gone on to work for Historic House Hotels, the Lygon Arms in Broadway and Royal Berkshire in Ascot. He was general manager of the Bath Spa hotel when it was run by Forte and went on to become regional manager for the company.

In 1998 he set up the Bristol Hotel Group, which managed the Hotel Bristol in Sheffield and launched the 200-seat Aqua restaurant in Bristol.

Sheppard went on to sell his shareholding in the Bristol Hotel Group and launched Furlong Hotels with business partner Haydn Fentum in 2000. The partners founded hotel management company Bespoke Hotels the following year. They sold the three Furlong properties - Billesley Manor, Coomber Grove Manor and the Lygon Arms - in 2005 at 11 times the original equity investment to concentrate on the development of Bespoke Hotels.

Sheppard's entrepreneurial flair resulted in him launching the iconic Ty-Nant mineral water in a blue bottle in 1988 - "I wanted to create a water bottle which looked good in a restaurant" - followed later by the natural soft drinks company Alfresco, which today has a range of nearly 40 products.

As an author, Sheppard has penned six volumes in the children's Icycle Tricycle series and sold more than 30,000 copies of A Solitary Confinement, in which he recalled his battle with the rare genetic condition, Guillain-Barre Syndrome.

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