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The renaissance of Britain's railway hotels

15 April 2011 by
The renaissance of Britain's railway hotels

Railway hotels around Britain are undergoing something of a renaissance as their value as grand hotels are recognised. What lessons can we learn from the way operators are breathing new life into them? Glynn Davis reports

On returning to London on a Sunday evening by Eurostar, Harry Handelsman, founder of Manhattan Loft Company, said: "I thought ‘my God it's magnificent' and most people in the world would agree with me. As a public space it gives a real sense of arrival. Arriving at Paris is just not the same."

He is talking about the newly restored St Pancras Chambers building that houses the St Pancras Renaissance hotel (pictured), which opens on 5 May. Handelsman has been the driving force in returning this former Midland Grand hotel building to its Victorian gothic glory over the past 12 years and is the major shareholder in the £200m development.

This is just one of a number of railway hotels around the UK that have been enjoying something of a renaissance, as hotel groups increasingly recognise their value as grand hotels. Millions of pounds are now being pumped into the restoration of these grand structures after many years of under-investment.

"The buildings originally matched the golden age of trains when they were owned by the rail companies," explains Tony Troy, chief executive of Principal Hayley which operates Glasgow Grand Central hotel and the Royal York hotel. "But they've gone through a rollercoaster ride since then. Today it's wonderful that the buildings are getting the investment they deserve."

The rollercoaster ride involved the nationalisation of the railways in 1948 when about 25 iconic hotels around the UK were brought together as British Transport Hotels. While passing through the hands of various government bodies they received little investment. And it was a similar story when, in the early 1980s, they were privatised and fell into the ownership of disparate companies.

Only in recent years have they been recognised again as grand buildings in unrivalled locations that can be brought back to life as profitable ventures. Robert Peel, executive chairman of Peel Hotels which operates the Midland hotel in Bradford, says they are the "gateway to cities, the guardians of the railways" that are enjoying the increased regularity of train services and the growing numbers of people using this mode of transport - which puts them in enviable locations for both business and leisure travellers.

iconic properties
David Kanarens, general manager of the Queens hotel in Leeds, says: "Rail travel is more popular and these hotels are located at the heart of the business communities. And with corporate customers more aware of their CSR responsibilities many people are using trains for business in cities and companies are holding their conferences with us."

In addition, these iconic properties are unique structures that appeal to the growing number of travellers looking for a more individual experience. However, therein lays the challenge. The grandness of the buildings and the years of under-investment means bringing them back to their former glory requires serious investment.

Kanarens says £12.5m has been spent since QHotels bought the Queens hotel in 2003. "Since they were built, the background infrastructure has not been touched and the customer-facing areas have also had low levels of investment," he adds.

It is a similar story at the other railway hotels with Guoman Hotels in the midst of spending £18m on its 357-room Grosvenor Victoria hotel in London and having recently invested £5.5m on a couple of restoration projects at its Charing Cross hotel.

For Peel Hotels, the restoration of the Midland hotel is a long-term project that began in 1998 with a rather "dilapidated" building that is being funded out of cash-flow rather than borrowings. Peel says an initial £1m investment has been followed by £350,000 each year, which has seen 90% of the corridors, all the banqueting rooms, and 50% of the bedrooms restored using the group's own team of tradesmen. The lift alone cost £180,000. "It's an elegant lift and you could say I'm mad, but I want it to be perfect," he says.

This is also the view of Handelsman who has invested £150m on the 245-bedroom hotel and a further £50m on its accompanying 67 luxury apartments. "If it had just been financial then we'd have cut corners but because it has such glorious details we've spent more than we intended. You have some petty cash and you deplete it and make sure you've got a bit left at the end," he suggests.

Marriott, operator of the Renaissance brand, also appears enthusiastic for this do-it-properly approach, according to Handelsman, who says they've acknowledged it is the "most amazing property out of all their 3,500 hotels".

St Pancras and many of the other railway hotels have listed status, which adds further complexity to the restoration work. But none can have experienced the unusual scene at the Grade II-listed Royal York hotel that has undergone a £7m refurbishment programme by owners Principal Hayley.

"When building the conference centre, part of the planning permission was granted on the basis that we excavated a Roman burial ground that had been found on the site. It delayed the project but the publicity was good as it appeared on Time Team," recalls Troy.

The advice from both Principle Hayley's Tony Troy and Michael Parker, general manager of the Grosvenor Victoria, is to spend a lot of time initially working through the planning phase. Troy says it is essential to bring in craftsmen contractors, which is why the group works with architect Donald Crerar.

"He goes through the archives and looks at old drawings," he says. "At Glasgow Grand Central hotel we found 40-year-old drawings that showed there were originally windows in the conference room. We've been able to re-instate these and lighten up the room."

This change was made possible by working closely with Heritage Scotland - for south of the border it is English Heritage. Troy recommends involving them closely in all restoration work. "We were appreciative of their input and we've engaged them in all aspects."

One of the most important elements in ensuring big investments in railway hotels stack-up is to marry the older parts of the buildings with new contemporary aspects that are fit for modern usage. Kanarens says: "We've kept the art deco style but also made sure fixtures and fittings are to 21st century standards and there are facilities like air conditioning and iPod docking stations."

The Queens hotel also benefits from the newly opened QClub - a floor of 18 rooms and lounge area costing £500,000 that is dedicated to business customers and enjoys a high level of repeat corporate customers.

At Glasgow Grand Central ,Troy says the hotel now has "magnificent meeting facilities" that, despite only being completed three months ago, have "attracted many major award dinners, which shows that the people of Glasgow have responded to the investment in the property".

The new positioning of the hotel as an upscale property (below 5-Star) has led to it quickly achieving average Glasgow occupancy levels of 75%, which all fits in with the return-on-capital forecasts of Principal Hayley. But in addition they have the satisfaction of having returned a tired old building back to its former glory - and the value that creates.

Ahead of its official opening on 5 May, Handelsman will be less certain of the financial outcome of his St Pancras project but for now he can comfort himself with the thought that he has at the very least accomplished a "lifetime's achievement [of restoring] one of the five best buildings in the UK".


the balmoral hotel, edinburgh

Balmoral Edinburgh
Balmoral Edinburgh
Such is the warmth felt towards the Balmoral hotel in Edinburgh that when the clock in the hotel's iconic tower recently stopped, reception took 500 calls highlighting its failure. This affection from the locals for the building has helped the hotel derive 45% of its revenues from banqueting, bars and restaurants.

To ensure it continues to attract plenty of non-staying guests, general manager Ivan Artolli says current owners the Rocco Forte Collection has invested regularly to upgrade its public areas - including £500,000 on the Balmoral Bar and £100,000 on the Bollinger Bar in the hotel's Palm Court that houses a large Venetian glass chandelier.

A further investment of £3.5m is also due to be made over the next three years to refurbish some of the hotel's rooms. But Artolli says its success relies on being "demanding" of contractors taking on what is often challenging work.

"There have been many challenges as it is much easier to design a new building. Olga [Polizzi, director of building and design] says it's more difficult to create a combination of old and new. Things need to look like they belong," he explains.
www.thebalmoralhotel.com


the grosvenor victoria, london

Grosvenor Victoria
Grosvenor Victoria
The restoration of the Grosvenor Victoria is a 16-month project for Guoman Hotels, ending in November, that will see the hotel move into the four-star deluxe category and attract more international customers.

The attraction will be the mixing of contemporary modern offerings - such as a gym and executive lounge - with the heritage aspects of the building that dates back to 1862 at its oldest part. The project will cost £18m in total and encompass completely updating the rooms in the original part as well as the Grosvenor Wing that was added in 1900.

Michael Parker, general manager of the hotel, says the original rooms "have to be taken back to a blank canvas" as they are lacking in infrastructure at a cost of £40,000 per room. Newer rooms cost £15,000 each to renovate. This will help add an average £50 to the basic rack rate when completed.

Although not expected to add greatly to the revenues at the hotel, Parker says the new food and beverages offer is necessary to attract the target audience. It has been greatly enhanced with a new brasserie, bar, lounge and upmarket Cantonese restaurant added.

It is within the public areas that English Heritage has been involved. The lobby and walkways are listed and have been of specific importance as the original wall tiles have been found behind many layers of paint.

A collaborative approach has been taken during this restoration work. "English Heritage has been very happy because we've been asking them what to do," Parker explains. "This is because we want it to look as original as possible."
www.grosvenor-victoria.com


10 tips on refurbishing a period property

â- Recognise the requirements of all stakeholders in order to avoid conflicts.
â- Find out as much about the property as you can and how it has changed.
â- A listed building is listed both inside and out, some areas of the building may have more historic or architectural interest than others but you will still need consent for any alterations.
â- Changes should reflect the period in which they were done.
â- Quality of workmanship is vital.
â- Ask the local authority conservation officer what is generally acceptable and they will be able to provide a good steer on local policies and resources that can be used.
â- Consider whether specialist advice is needed.
â- Listed buildings often require specialist skills - the Building Conservation Directory website (www.buildingconservation.com) is a good resource for specialist trades people and technical advice.
â- Consider the extra challenges involved in restoring a property while still trading.

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