When Mark Chambers joined the Eden Hotel Collection 10 years ago, the company had two properties. Today, it owns and operates nine of the UK's leading country-house hotels and is on the look out for more, says Janet Harmer
The Eden Hotel Collection has properties located across the Midlands and the South West. What is their common link?
How did the collection come about?
The first hotel was Mallory Court, bought by Sir Peter Rigby in 1998. He was initially a part owner and later bought out his partner to become the sole owner.
Sir Peter is a businessman and recognises a good opportunity. He was a client of Mallory Court. His wider business portfolio - now 40 years old - is international and includes IT, property and aviation companies.
When I joined in 2006 there were just two hotels: Mallory Court and Buckland Tout-Saints. At the time Sir Peter had a vision to grow the group, although he didn't have any specific target figures. It was very much a case of 'let's establish a relationship and see where we are going'. We have pretty much acquired a hotel every two years since, and now we have nine.
What is Sir Peter's involvement in the hotels?
The hotels are a private family business, which is self-financed by Sir Peter. He is good at empowerment and employs people with the skills and experience to deliver quality. But he is not interested in being a hotelier. We have lots of discussions across a broad spectrum of issues, and he supports what we do. Day to day, it is the executive and operational teams who run the business, while Sir Peter is at the helm of the Rigby Group.
What are the plans for growth?
We now have a clear strategy and will target properties with a minimum of 40 bedrooms in locations where there is a possibility of developing our spa brand. Most of our hotels are smaller than 40 rooms at the moment. Our three largest are Mallory Court with 31 beds, with plans to increase to 43, Arden with 45 and Bovey Castle with 65 plus 22 lodges. The group ranges in size from 16- to 65-bedroom properties. We know that 40 is a good number for a good commercial return.
There is a number of boxes we like to tick, not least what the return on investment will be and how the hotel will fit into the group. There is a definite desire to acquire attractive hotels in grounds, typically country-house hotels. We consider ourselves custodians of buildings, so we have got to love them. We're not looking to pick up trophy hotels.
Target locations include heritage towns and cities such as Bath and Oxford. But we may also acquire hotels as the opportunities arise, as we did when we acquired two hotels out of the Von Essen administration [Greenway Hotel & Spa in Cheltenham and Mount Somerset Hotel and Spa, near Taunton]. We usually know as soon as we walk into a hotel whether it is right or not. It is like the gut instinct you get when buying a house and you can see that there is a potential to unlock.
You entered a new arena with the Arden Hotel in Stratford-upon-Avon, which is owned as a joint venture with the Royal Shakespeare Company (RSC). How did that come about?
The hotel had always been owned by the RSC and had previously operated under a Thistle management contract. When the RSC undertook the big transformation of its Stratford theatre, it decided to increase the standard of the hotel. Sir Peter was asked if we wanted to manage the hotel, but that is not what we do as we like to own our properties. However, we wanted a share of the hotel, so we entered into a 50/50 joint venture partnership with the RSC, which has proved to be very successful.
And now you have just bought a second hotel in Stratford, in partnership with the RSC?
Yes, the success of the Arden Hotel, which has now been open for five years, led to a new joint venture partnership for the ownership of Caterham House, a 10-bedroom hotel which we bought together at the end of last year.
The Arden has always enjoyed a high occupancy at around 83% and we were keen to expand it, but there is not the space to do that. Caterham House is just two streets away and will run as a secondary location to the Arden.
We are currently in the process of deciding exactly what we will do with the property. Our intention is to turn it into a boutique property and the name will change.
Not all acquisitions are so successful. What happened with Tides Reach?
We bought Tides Reach on the waterfront in Salcombe in 2014 with a view to rebuild it as a new 50-bedroom hotel. But from the outset there was local opposition. A lot of time, effort and money went into putting together what would have been an iconic hotel for Salcombe and it would have been our first new build. Unfortunately, when you receive such strong opposition, you lose your appetite to invest in an area. An off-market agreement was eventually brokered to sell the hotel [to Harbour Hotels], which worked for both parties.
Bovey Castle - one of the South West's most iconic hotels - has worked out better. How are your plans going for transforming the hotel?
It's our largest hotel, employing 150 staff. Unfortunately it had been under-invested in for a number of years and so we had to set about getting the fabric of the building repaired. The fixing of roofs, windows, gutters and mullions resulted in an immediate spend of £1m. In January 2015 we started on a four-month refurbishment of the public areas, reception and restaurants, which cost £2m.
Since January we have been working on the refurbishment of 26 rooms and suites in the main house, which we are just completing now. Work will then start on the rest of the bedrooms. By the end of all the renovations, we will have spent £6m. As soon as everything has been completed, there will be something else to do, as is the nature of buildings of this age [Bovey Castle was built in 1907].
The Arden hotel
What is your biggest challenge?
Undoubtedly, it is HR and skills. Chefs are generally the toughest area to recruit, but every department is difficult. It is easier to recruit in Leamington and Stratford than in rural Devon. Hence, we provide accommodation for 17 staff on site and nearby at Bovey, but it's never enough.
What are you doing to address the difficulty of recruiting staff?
We need to show potential staff that there is the opportunity for them to progress. So a major strategic thread this year for us is training and development. Last year we employed a learning and development manager, Rachel Healey, whose remit is to focus on three key approaches around people.
The first is the launch of a programme identifying people who have the potential to progress and provide them with the support to do so, such as a supervisor who has the ability to step into a head of department role.
Second, we have created a number of training courses, covering front of house or food and beverage, focused around how staff can positively impact the experience of customers.
And finally, we have introduced our Red Star programme, to be completed by every member of the team within 12 months. It is focused on service and we are including everyone, not just front-of-house staff. We are working in collaboration with the AA, who have provided the framework for the programme, with the delivery taking place in-house, led by Rachel under the direction of myself and Toni Douglas, group operations manager.
We hope all these initiatives will help in attracting staff and keeping them. It is about offering a point of difference and offering value to the team. Providing a better structure and support for staff will result in better service and hospitality, which will stabilise the business. It is self-perpetuating.
How is current trading?
Projected group turnover for 2016-17 is £21m, which represents 6% growth. The past year has been good, with all hotels up on the previous year. Stand-out performers were the Greenway, Mallory Court and Arden. So many variables can affect revenue, such as how well other businesses are preforming in the locality. For instance, Jaguar Land Rover is five miles from Mallory and it is an important driver of business to the hotel.
What are your key methods of marketing?
We have significantly racked up our marketing effort by investing in an on-road business development team, as well as focusing on corporate sales and social marketing. We've moved away from traditional marketing methods - the paper version of the Christmas brochure has been replaced by an online version, which has enabled us to triple the number of page views. If we send an e-shot, we know who opens it and the number of clicks we have on the email.
How important are online travel agents (OTAs) to the hotels?
About 20% of our business comes from OTAs and third parties. We have a very successful relationship with the likes of Booking.com and LateRooms.com, and we wish to retain them. We also use Secret Escapes.
The Kings hotel
How is Eden managing the introduction of the National Living Wage?
It's something of a double-edged sword. The industry has had a reputation for low pay for years, so this certainly helps to add credibility to the business. But, the flip side will cost the industry more.
It is not a case of just putting up the minimum wages - you have also got to consider the differentiation between the pay scales and therefore look at salaries across the board. You also have to start looking at smarter ways of managing costs. So, for instance, we are talking to our suppliers. We've been able to achieve better terms on laundry costs, which can amount to £500,000 per year.
What are the future plans for the business?
We receive phone calls almost daily about potential properties that are coming on the market. We will explore acquiring more hotels that are appropriate for us, but we have no target on numbers.
We have a lot of ongoing improvement works and, in total, we are spending around £10m on capital expenditure during an 18-month period from 2015 through to 2017. As well as the ongoing work at Bovey Castle and the plans for Caterham House, we are developing a spa and 12 additional bedrooms at Mallory Court, and expanding the restaurant and also adding 12 bedrooms at the Greenway.
We have two main strategic threads at the moment. The first revolves around growing our spa brand, Elan Spa. The spa we are developing at Mallory Court will be the fourth in the group, joining those at the Greenway, Mount Somerset and Bovey Castle. By the time the one at Mallory is open, we will have £1.5m worth of spa business, which is a very strong income stream. Spas really add to the appeal of a hotel and increase discretionary spending. We are looking at the possible development of spas in other hotels, such as at Brockencote Hall.
How would you sum up your 10 years at Bovey Castle?
It has been a hugely exciting time and a massive learning curve. I have been very fortunate to be supported by Sir Peter - he always gives a guiding hand. I started with the company as a hotelier, but I'm now definitely much more of a business person and am looking forward to the next 10 years.
Mount Somerset hotel & spa
Eden Hotel Collection
Total staff 500
Annual turnover £15m in 2015 (2014: £9.7m. Acquisition of Bovey Castle in 2014 generated an additional £5m, while the remaining hotels saw a revenue increase of £300,000)
Pre-tax profit £96,051 loss in 2015, (2014: £148,076 profit)
Group occupancy 66%
Group average room rate £123 net
Total revenue per available room £195
Awards AA Small Group Hotel of the Year, 2014-2015
Royal Leamington Spa, Warwickshire
Three red AA stars, three AA rosettes, 31 bedrooms
Goveton, Kingsbridge, Devon
Three AA stars, 16 bedrooms
Chipping Campden, Gloucestershire
Four AA stars (restaurant with rooms), two AA rosettes,18 bedrooms
Four red AA stars, three AA rosettes, 21 bedrooms
The Arden hotel
Four AA stars, two AA rosettes, 45 bedrooms
The Greenway hotel & spa
Four AA stars, two AA rosettes, 21 bedrooms
The Mount Somerset hotel & spa
Lower Henlade, Somerset
Four AA stars, two AA rosettes, 19 bedrooms
North Bovey, Dartmoor, Devon
Mark Chambers CV
Mark Chambers entered the hotel industry as a house porter with Trusthouse Forte, a weekend job while studying hotel management at what was then the Essex Institute of Higher Education (now Anglia Ruskin University). His first full-time role was in 1986 at the Forte hotel in Epping as a receptionist.
Chambers initially progressed through front-of-house and meeting and event roles with Forte before moving to Waveney Inns in Norfolk as group sales and marketing manager. His first general manager appointment was at the independently owned Royal Chase hotel in Shaftesbury, Dorset.
Further general manager roles followed with Marston's Inns at their Landsdown Grove property in Bath and Coulsdon Manor in Surrey. In 2003 Chambers joined Alexander Hotels in West Sussex as senior general manager, overseeing three properties.
Three years later he moved to Mallory Court in Warwickshire as director and general manager, a role which also involved overseeing Buckland Tout-Saints in Devon. In 2008 Chambers was promoted to managing director of the Eden Hotel Collection, in which he was charged with growing the group to the nine properties it has today.
Chambers is a Master Innholder, chairman of the Meeting Industry Association and non-executive director of Pride of Britain Hotels.
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