The much-respected Connaught in London has chosen to take the drastic action of closing for seven months to undergo a major refurbishment. Tom Vaughan reports
Change is not something that loyal customers of London's 110-year-old Connaught hotel normally crave. For example, current general manager Anthony Lee remembers when, back in 1972, a predecessor replaced the telephone operator system with a self-dial option and customers protested that he was "trying to ruin what the Connaught is all about".
But this week Lee has more to worry him than customer concerns, as the Mayfair bolt-hole for the rich and famous prepares to close for one of the most extensive periods of refurbishment and development in its history.
For hotels small and large, group-owned and independent, refurbishment is one of the hardest periods they will have to endure.
While the most pressing question for most hotels in this situation is whether or not they should close for the refurbishment period, at the Connaught there was no debate. "The extent of what we are doing means we could not stay open," Lee says. "There'd be too much noise, muck, dust and disruption to staff."
So the doors will shut on 27 March, and phase one of the renovation will kick in. This will involve seven months of building works, including the refurbishment of all the hotels' 96 rooms, the knocking-through of its six single rooms to create larger suites, the addition of a conservatory to the front-of-property drawing room, the renovation of the basement (including a new lift shaft) and the installation of a new kitchen to serve Angela Hartnett's restaurant. An undetermined number of floors will reopen in November this year, the remainder opening on completion.
Phase two, which will start after November, will consist of a sizeable extension to the rear of the property. As this is an external development, during this period the hotel will trade as normal. On completion, the extension will add function rooms, private dining, a spa and 33 bedrooms, bringing the total to 123.
Phases one and two together are likely to cost £60m, the funds being provided by the hotel's owner, Quinlan Private.
According to hotel consultant Melvin Gold, there can't be more than 10 hotels in Europe that have closed for refurbishment in the past decade. The major factor behind the decision, he says, is cash-flow. "If you close, then you may get the work done quicker, but you have no income during that period," he notes. "The top-end hotels, where guests will be paying top dollar, may choose to do this, but the majority will not."
Lee admits that the closure is a concern. "Of course, we are a little worried about sending our customers out into London to sample our rival hotels," he says, "but we have to be confident that they will return to a better hotel when we reopen." Guests trying to book at the Connaught by phone or online during its closure will be directed to one or other of the hotel's sister sites in the Maybourne Group - Claridge's and the Berkeley.
Of course, this does not mean customers won't look further afield. Nigel Massey, spokesperson for the Halkin hotel in London's Knightsbridge, agrees that the Connaught's closure is a great opportunity. "The Halkin has always seen itself as a great rival to the Connaught," Massey says, "and, while we wish it all the best in its refurbishment, it is also a great opportunity for us to show the Connaught's customers what else is out there."
Beside cash-flow, a major advantage to staying open is continuity for both customers and staff. Von Essen Hotels decided to stay open when it purchased Lower Slaughter Manor and neighbouring hotel the Washbourne in 2004, both of which were dated country hotels in need of a revamp.
Greg Ward, executive director of sales and marketing for Von Essen, explains: "The most important thing is to keep the business running. Neither staff nor long-standing customers want to see their hotel closed, and it stops you taking any money. The Cotswolds is traditionally seasonal, so we staggered the refurbishment to fit in with low times."
Von Essen also saw it as important to manage customer expectations at the same time. Ward says: "We asked ourselves how we could manage guest disruption, and the only answer is to have an open and honest policy."
So guests who reserved rooms and clients who had booked weddings or functions were informed of any potential disruption. In one case, to accommodate a wedding, the walls and floor of the gutted restaurant were decorated in material, to create what Ward describes as an "internal marquee".
When the option to close is taken, it is vital to restrict business losses to a minimum, which means reopening with as high an occupancy as possible. The best way to achieve this, according to Gold, is to retain all the sales team and keep talking to customers. "Make sure you are still visible in the marketplace, even though you're not looking for customers tomorrow," he says. "Keep people updated - what's finished, what's not finished, what the artistic impression of finished areas is. Maybe even produce a newsletter or in-house magazines to get the information out there."
Lee says that putting a strategic plan in place for the Connaught's closure was one of the most important issues. "Rather than this seven months being a chance for time off, it's going to be some of the hardest work we've done," he says. Representatives aim to visit key demographic areas, including Los Angeles and New York, to attend events and parties, and throw some of their own, to make phone calls to more than 2,000 regular guests and to constantly update others with an e-chronicle - all to ensure that the Connaught maintains a presence in the marketplace.
Reopening also brings with it the question of new rack rates. While the temptation is to raise the rates in accordance with the better quality of rooms, and to try to recoup business income lost during closure, this has to be balanced, says Lee, with not alienating loyal customers by hiking up the prices. So, the Connaught will relaunch in November with prices only slightly higher, nothing drastic.
As the Connaught prepares for its temporary closure, another of London's iconic hotels, the Savoy, is gearing up for a major refurbishment later this year. It is being coy about discussing details - probably because it does not want to create too much uncertainty. Recent reports, though, have suggested that the revamp of the 230-bedroom hotel will cost £100m and take 16 months.
Besides potentially losing guests, the hiatus for refurbishment may also jeopardise staff loyalty, prompting them to look elsewhere. In fact, staffing issues are among the toughest to deal with when considering a refurbishment. News of a closure can drastically undermine staff morale if they believe it might affect their employment - particularly if it is coupled with a takeover, as was the case at Von Essen.
At the Connaught, Lee reckons that the only way to deal with such a situation is to be honest. "I've always been open with my staff," he says. "They're not fools, and if you treat them like fools or try to keep information from them, it'll go down as Chinese whispers. I tell them as much as I know and inform them that it's not for public knowledge. If I think the situation will unfold in a certain way, I'll share that opinion."
Certainly, there are cases where major refurbishments have cost staff their jobs. In 2003, after Rocco Forte Hotels bought Browns in London and closed it to undertake a planned £15m refurbishment, many of the 140 staff found themselves having to accept redundancy packages.
At the Connaught, all of the 230 staff are being retained on full pay and most are being redeployed around sister hotels Claridge's and the Berkeley. In some cases, though, they are being given the opportunity to go abroad. For example, Lee is sending his head housekeeper to the self-proclaimed seven-star Burj Al Arab hotel in Dubai during the refurbishment.
"The key is to sell it as an opportunity," says Lee. "Rather than making it seem like a hard experience, you can make it a positive one."
However, staffing can also prove problematic for hotels that remain open during refurbishment. The challenges of appeasing irritated customers, alongside the chaos of building work, can heap extra stress on staff.
The 42-bedroom Foxhills Club and Resort at Ottershaw, Surrey, is undergoing a £10m refurbishment over three years, including adding a spa and extending room numbers to 70. General manager Marc Hayton says that, at such times, a manager must show true leadership qualities. "You have to make sure you shield staff from any blame directed at the refurbishment project, because it isn't their fault," he says.
For instance, when the dates for refurbishment were decided, it was apparent they would clash with 42 weddings booked at the hotel. To prevent the affected couples directing blame at the hotel's wedding co-ordinator, Hayton invited all of them for a personal meeting and took any criticism himself.
Relationships between management and staff aren't the only possible causes for friction during a refurbishment. Builders, stereotypically a law unto themselves in terms of reliability, can make or break a successful renovation. A further degree of unpredictability enters the equation if the property is old. Structural difficulties, restrictions on listed features and antiquated plumbing can all cause unexpected delays. For example, the planned £15m face-lift of Browns hotel ended up costing £19m and over-running by five months because of building issues.
Lee says that to avoid such problems, you need to be as prepared as possible before going into the project. The extensive nature of the Connaught's refurbishment, which will also include a complete overhaul of the hotel's plumbing and electrics, means that no corners are being cut. Lee admits that he has learnt a great deal from observing other London hotels in terms of how to, and how not to, go about a refurbishment - even speaking with contractors involved in less-successful projects to gauge what went wrong.
In choosing a contractor, Hayton at Foxhills says that it is crucial to find a company with which you can forge a relationship, and not to make a decision based simply on price. An independent hotelier needs to choose a contractor who has worked with hotels before - whereas a group of hotels may have a relationship with one building company, and will have crossed common obstacles before, an independent hotelier has to learn on the job.
Hayton explains: "You have to ask yourself, ‘Do they understand what we are doing here? And are we going to be able to live with these people for a year?' For example, if you have a wedding in the afternoon and they want to work until lunch, you need contractors who will let you call in a favour."
It's also useful to find builders who can work tidily and cheerfully around guests. What Ward valued about the contractors at Von Essen's Lower Slaughter Manor was their interaction with the customers. "We call it the theatre of refurbishment," he says. "The builders would turn around, greet the guests and chat with them if they stopped. It made them seem like part of the hotel rather than an interruption."
There does seem to be a glut of refurbishment at present. Lee reckons that, while the prospect of the London Olympics and the smoking ban have played their part, it is the growing expectations of today's more discerning guests that are driving improvements. "Guests travel so much now and see so many different styles and hotels, so we can't afford to be anything but the best," Lee says. "Whether someone is spending £1 or £1,000, they want value for money."
As the Connaught moves into the 21st century, one of the biggest difficulties is balancing progress and tradition. "You can fall between the cracks when you refurbish a hotel," Lee says. "If you cut loose from the past, you will lose the regular customers who have been coming for the past 20 to 30 years. If you try to appeal to the older customers, then you will be stuck in the past. But then, if you try to appeal to the young, hip market, the danger is you are popular for a small amount of time, then the next new thing comes along and you're old news."
But a hotel will ignore or delay refurbishment at its own peril. And it is this mentality that is driving Lee and the Connaught's redevelopment forward. "The mistake some places make is not to have the confidence in their convictions," Lee says. "This is what is necessary to take the hotel into the new century. And you have to listen to comments from guests, hold their hands and take them with you. If you don't, then, as the older customers who fear change slowly die off, the hotel will die with them."
- Location: Mayfair, London
- Opened: 1897
- Refurbishment cost: £60m
- Present room numbers: 96
- Room numbers after refurbishment: 123
- Estimated length of closure: seven months
- Other areas of development: addition of spa, conference facilities, private dining room
Expert advice on refurbishing hotels with spas
Andrew Beale, managing director Beales Hotels
Past experience: Most recently, a £5.5m refurbishment of Hatfields hotel, which closed for eight months
"If you decide to stay open, analyse the quiet periods and pick the right time of year to start the work. Bedroom refurbishments are easily managed, but public work area will get in everyone's way. Do this at the quietest time.
"Allow for more time than you think for unanticipated problems. Some guests - corporate, bedrooms, weekend leisure, evening restaurant - are not affected by building work. But day conferences, day spa, chance lunches and weekend weddings complain if their stay is interrupted by noise.
"Don't offer discounted rates, but get your guests to come back to the newly refurbished hotel for a soft opening where they pay nothing, but are asked to complete a questionnaire about their stay."
Chris Morton, managing director, consultancy Chris Morton Associates
"First, look at the seasonality of all elements of your business and decide how to minimise, or even exclude, building works during your main trading periods.
"Consider where your bedrooms are located, and how separate areas of the property can be isolated and refurbished, while other areas can be safely traded.
"Depending on the degree of work to be undertaken, and the level of external works involved, it may be easier to introduce a rolling programme working on four or five rooms at a time.
"Ensure that all open areas can be easily accessed. Identify which areas will be available and when, and plan marketing activity to promote them strongly. This will apply especially to the spa and golf course.
"Promote the newly refurbished rooms as soon as possible."
Paul Davey, managing director, specialist business agent and valuer Davey & Co
"Promote the spa and golf course facilities while the rooms are being upgraded (rather than being plainly ‘refurbished') by offering discounts or incentives. This allows you to promote the use of your additional, highly marketable facilities in their own right, particularly while the improvement works are being carried out.
"I would advocate an incentive package in two parts:
- Promote the use of the leisure facilities on a fixed-price deal - maybe include some spa treatments, golf lessons, etc.
- Enable those taking advantage of this offer to benefit from a reduced room rate once the rooms are reopened.
"Purely discounting room rates is a fairly blunt instrument and, given the particularly well-balanced facilities your business offers, you can afford to be far more creative in your approach."
Managing customer expectations
- Marc Hayton, general manager of the independently owned Foxhills Club & Resort, realised that a crane and a cement mixer on the lawn were ruining the view for wedding parties. He invited the principals for all 42 booked weddings in for a chat, let them know the situation and, knowing that it was only the Champagne reception that would be affected by the eyesores, offered it as complimentary. Only one wedding cancelled.
- The general manager of the InterContinental hotel in Hong Kong compensated for a wait for elevators during maintenance repairs by putting a free Champagne bar by every lift shaft.
- Andrew Mosley, general manager of Norton Park, Hampshire, found that a constructive way to deal with guests disrupted by building work was to offer them a free bed-and-breakfast stay after the refurbishment was finished. "They will probably have already benefited from reduced rates during the refurbishment," he says. "But this way they will return afterwards, see the new hotel and hopefully tell people about it."