The Caterer interview: Sharan Pasricha
The founder and chief executive of Ennismore, which owns the Hoxton and Gleneagles hotels, tells Janet Harmer about his bold ambitions for both brands
Your acquisition of Gleneagles [in June] took everyone by surprise. Why did you do it?
We are in the business of building a unique hospitality portfolio around the world. Gleneagles couldn't be more different to our existing Hoxton brand. But they are both incredible, iconic brands in their own right. Diageo ran Gleneagles incredibly well for many years, but it was not a core part of its business. We got involved right from the outset when the hotel was put on the market in January.
What are your plans for Gleneagles?
We intend to invest right across the estate and bring the hotel up to date. The property is best known for golf, but with 850 acres of beautiful Scottish countryside, there is the potential to do a lot more. The food and beverage is very successful, but I don't think the hotel has scratched the surface of what can be done. We also need to look at the bedrooms and leisure propositions. As operator as well as investor, we'll be coming at it from a different angle than Diageo. We can think outside the box, and be bold and creative in our investment.
Gleneagles and the Hoxton operate in very different sectors, but are there similarities in your approach to the businesses?
Yes. We were bold in our ambitions for the Hoxton because we knew what it could become - and that will be the same for GlenÂeagles. At the same time, we have retained the original DNA of the Hoxton and intend to do the same with Gleneagles. We are creative operators and like to roll our sleeves up to grow and run our businesses.
How can you use your experience at the Hoxton to benefit Gleneagles?
Gleneagles is a very well-established business with 900 employees, but we can use our experience to challenge the status quo, particularly the digital strategy - the analytics, social media and revenue management, but also food and beverage, leisure and human resources. We have a strong financial background, so that will help when it comes to capital projects and deploying capital. But before we do anything, we need to fully understand the brand.
Does the addition of Gleneagles to your portfolio suggest that you will look for further luxury hotel acquisitions or could the brand be taken elsewhere?
If an incredible building came along, we would certainly look at it. Gleneagles as a brand could be exported outside Scotland. We know the hotel has a great following in North America and Asia.
You entered the hotel sector three years ago when you bought the original Hoxton, which has now been joined by hotels in Holborn and Amsterdam. How are they performing?
The Hoxton has exceeded all expectations. Occupancy has never dropped below 90%, with an average room rate of £150. An important caveat is that an overwhelming percentage of our business comes direct through our own robust digital platform. We use online travel agents only when we really have to. We are very focused on the guest journey online, which has been improved with the arrival of Alan Friggieri as digital analytics director from Lastminute.com, where he was head of analytics and optimisation.
How have you enhanced the brand?
We've repositioned it and upgraded and updated the product for 2015. By building a new team, we've centralised core services and taken a new creative direction. But, at the same time, we've kept the guiding Hoxton principles of offering value and not charging for things you shouldn't.
Each hotel has the same energy and lobby culture, which we call the Hoxton hustle, but the interiors are vastly different due to the very different buildings in which they are located. They feel the same, but don't look the same.The original Hoxton is located in a former car park in Shoreditch, while Holborn is located in a former BT office block.
Amsterdam is different again in that it is within the mayor's old residence in an incredible location - the interior design reflects this. The Dutch don't have a hotel lobby culture at all, so we waited with bated breath for the opening. We've been overwhelmed by the positive response of the city.
We've refurbished all the bedrooms in Shoreditch, and all the public and food and beverage area. We've retained the same relaxed vibe, but upgraded the quality of the furniture.
When we bought the Hoxton, it troubled me to see the lights go off in the meetings and events spaces at 6pm, so we've created homely spaces which are for work during the day and become fun spaces for private dinners and parties by night. We created the Apartment concept two years ago to replicate a private residence; the heart of it is a pantry kitchen, creating a sense of community and where all teas, coffees, soft drinks and pastries are inclusive. You can either rent one of the rooms - all offer integrated IT - or the whole apartment. In the evening the pantry becomes a fully-fledged bar.
The Hoxton Shoreditch
How has the digital platform helped the business?
It has impacted all the key functions around the brand, from interior design and graphic design to web development and web analytics - it really influences the entire guest journey. As both the developer and operator, we can effect change quickly.
You often speak about the energy and vibe of the Hoxton. What do you do to inspire it?
It all stems from a desire to keep the public areas vibrant and fresh. We collaborate with some amazing people and curate a programme of events every month, inspired by the neighbourhood of each hotel, called HoxTown. Among the 10 to 12 monthly events are yoga classes, cocktail masterclasses, pop-up vintage events and kids' activities. There is generally something for everyone and, although it takes a great deal of organisation, it is absolutely integral to keep the Hoxton relevant and alive. We now host 30 or so events across the three hotels. It is all about highlighting the good and the great of the local area of each property.
The Hoxton Grill
How has your relationship developed with Soho House, the operator of the food and beverage outlets at the Hoxton?
Prior to acquiring the Hoxton I looked at buying Soho House. That didn't work out, but I ended up forging a friendship with the founder Nick Jones. Soho House was already operating the restaurant at the Hoxton in Shoreditch. It was the only restaurant it operated outside its own business and I don't think it was quite getting the attention it deserved. Nick and I were keen to continue the relationship. Soho House has since gone on to open restaurants in the Hoxton hotels in Holborn and Amsterdam. We have a lot of synergies between the values of our businesses. However, as a private members' club, Soho House is exclusive, whereas we are inclusive. We'll be launching four more restaurants together over the next year across our two future hotels in New York and Paris.
We've also just opened our first standalone restaurant joint venture with Soho House - Egg Break in Notting Hill, inspired by Eggslut, which originally operated out of a food truck in Los Angles. We took over the lease of a former Thai restaurant and now operate from 7am to 5pm from Wednesday to Sunday. It's early days, but it is a great neighbourhood restaurant and is already doing good business.
The next Hoxton in London will be in Southwark. Tell us about it
It is due to open in 2018 and will be a new-build hotel with 192 bedrooms. Southwark is an area which is gentrifying rapidly. It is amazing the things that are going on in the area on the design and food scene, and it is exciting to be part of that development.
What are your plans for the Hoxton's growth?
We have three in the pipeline - Paris and New York will both open in 2016 and Southwark in 2018. That will take us up to six hotels, and I think we could do around 12 in total. The team travels a lot and we are looking for opportunities in the kind of cities that we like to hang out in, such as Berlin, Stockholm, Barcelona, Chicago, San Francisco and Los Angeles. We've certainly no ambitions to build a big chain of 50 to 100 hotels. That wouldn't be possible anyway, as I'm too involved in all the elements myself - whether it is choosing a sofa or deciding on a new concept within the hotels.
We don't have a brand manual in developing the hotels. They are all stylistically different, involving unique buildings in gentrifying neighbourhoods.
Any more in London?
I certainly think we could do at least another one or two after Southwark. King's Cross is one area I would be interested in, but I suspect we might be late to the party there. Then maybe one in west London, but we don't have any aspirations to go outside London. I think the strategy is therefore around four in total in London and eight overseas.
The Hoxton raised its profile in the past by periodically offering rooms at £1 for limited periods. Have you considered continuing this?
The £1 sale was a great marketing promotion which helped drive awareness of the brand when there was no competition at the time in Shoreditch, but the Hoxton is now in a different place. It worked when the brand was perceived as a budget brand and room rates started at between £20 and £30. Now, social media drives our awareness and events, not flash sales.
The Hoxton Grill
- What is Ennismore's key strength?
I think we're highly creative and good at creating brands. While we are yet to create our own hotel brand, we have already created several within the Hoxton brand, including HoxTown, the Apartment and Pen & Ink, our in-house bathroom amenities.
We love brands and if we don't find another hotel brand to acquire, we will create one. Meanwhile, we've created the Egg Break restaurant brand with Soho House and are looking to do more food and beverage brands too - possibly in the next two to three months.
Ennismore is both owner and operator of your hotels - an increasingly unusual scenario. Does this work for you?
As the owner of the real estate and the end-user, we have the ability to see the end product like no-one else can, as well as having the mandate to deploy significant capital.
How do you see the future for Ennismore?
We're very ambitious in our approach, not in our volume. We want every hotel to be authentic and bespoke. Because we enjoy the creative journey as much as operational challenges, we're restricted to doing just a handful of new projects each year. We've certainly no ambitions to have 5,000 people working at HoxHouse [head office].
The team we've built at Ennismore is strong and exciting, with directors from multi- disciplinary backgrounds working on the brand, acquisitions and capital projects. We're more likely to take on a non-hotelier - which is what I am - as we find they can add value. Without having the benefit of knowing how things should be done from a hospitality point of view, they bring with them best practice from a lot of different disciplines.
We have no institutional investors, who are generally looking for liquidity every five to seven years. As the ultimate shareholder, we're taking a longer-term view in our investments and won't have to sell up to realise value. Value for us will come through maximising efficiencies, performance and refinancing.
The Hoxton Shoreditch
The Hoxton Shoreditch
This was the hotel that kicked off the Hoxton brand. Sinclair Beecham, co-founder of Pret A Manger, opened the hotel - a redeveloped car park - in 2006 after becoming frustrated with "rip-off prices" charged at other hotels. Ennismore, led by Sharan Pasricha, bought the property in 2012 for around £65m. It has 210 bedrooms and features the Hoxton Grill.
The Hoxton Holborn
Developed within a former BT office block and opened in 2014, this 174-bedroom hotel offers three dining options: Chicken Shop, Holborn Grind and Hubbard & Bell.
The Hoxton Amsterdam
Located within five 17th century houses overlooking the Herengracht and Singel canals, the 11-bedroom hotel was once home to the mayor of Amsterdam. It opened in July and features Lotti's, an Italian restaurant with Dutch influences.
In the pipeline
There are three Hoxton hotels currently on the drawing board: one in Williamsburg, New York, another in Paris, and a third in Southwark, London.
The 175-bedroom Williamsburg property will occupy the site of the Rosenwach factory and is set to open in summer 2016.
The 170-bedroom Paris hotel will launch within a 16th-century building near the Bourse soon after.
Due to open some time in 2018, the Southwark hotel will mark the brand's first new-build property.
Ennismore surprised the hospitality sector with its acquisition of the five-red-AA-star, 232-bedroom Gleneagles hotel in Auchterarder, Perthshire, in July, after outbidding rivals. It is believed that previous owner Diageo was seeking a deal worth around £200m.
The trophy property was catapulted onto the international stage as the venue of the G8 heads of government summit in 2005 and the host venue of the Ryder Cup last year.
It sits in an 850-acre estate and boasts three golf courses, the two-Michelin-starred Restaurant Andrew Fairlie, three further restaurants, and Spa by Espa with 18 treatment rooms. Gleneagles' extensive leisure facilities include an equestrian centre, fishing, falconry, indoor tennis, a gundog school and off-road driving.
In the financial year ended 30 June 2014, Gleneagles turned over £43.5m and reported an operating profit of £2.6m.
Indian-born, Sharan Pasricha was educated at the Doon School, an independent boarding school in Dehradun, in the north of India. He has an accounting and finance degree and an MBA. After running his family's clothes factory in Delhi, he founded and sold media agency Rush Media and spent time at investment group Better Capita. In 2010 he founded Ennismore, which has gone on to acquire the Hoxton and Gleneagles.
The Caterer Summit 2015
Sharan Pasricha will be among a host of top speakers at this year's The Caterer Summit, to be held in London at the Jumeirah Carlton Tower on Friday 13 November. He will be joined by keynote speaker Jeremy King, co-founder and chief executive of Corbin & King. To book your place, go to: www.thecaterersummit.com