Harbour Hotels Group managing director Mike Warren tells Janet Harmer how and why the company is poised to become one of the UK's most recognisable niche hotel groups
After 17 years with Hotel du Vin and Malmaison, why did you decide to move to Harbour Hotels Group?
beyond the south and south west.
I wanted a new challenge and a role that allowed me more autonomy to make decisions faster. I also liked the fact that, like Hotel du Vin, Harbour Hotels has a strong focus on F&B, which accounts for 50% of its revenue.
What is the history behind the group?
The group was launched in 2003 when the founder Nicolas Roche, who is a PwC-trained accountant, bought what was then the Avonmouth hotel (a one-time Trusthouse Forte property that had become rundown) in Christchurch. He was attracted to the property as it was somewhere he stayed with his family as a young man.
After extending and upgrading the hotel at a cost of £8m, resulting in its transformation from a three-AA-star property into the four-AA-star Christchurch Harbour hotel, he went on to buy the Kings Arms, a Georgian boutique townhouse property, also in Christchurch.
The Kings Arms is more of a restaurant with rooms and is the one hotel not on the waterfront. Subsequent acquisitions have included hotels in Sidmouth, St Ives and Salcombe. The group, which operates under parent company Nicolas James, also includes two venues for weddings and events on the Surrey-Hampshire border - Northbrook Park and Froyle Park.
Why do you think the allure of seaside hotels has been lost in recent years?
In many cases, the hotels are in family ownership and are under-invested, resulting in tired and faded properties. There is currently no precedent of a group of coastal hotels which can benefit from the synergy of online sales and marketing. This is something we have invested in over the past 18 months, with the help of a digital sales manager.
How are you moving the business forward at Harbour Hotels?
We are making ongoing improvements across the group. Having created a flagship hotel at Salcombe, where we've built a great spa and event spaces with a cool vibe, we're now nearing completion of a £3m upgrade at Sidmouth, which previously had a very traditional feel.
Improvements include a 22-bedroom courtyard extension, which we undertook last year, and we're introducing a Jetty restaurant with an open-plan kitchen and spa. Sidmouth is quite a sleepy resort, but it benefits from being close to Exeter and enjoys a healthy occupancy.
The Salcombe, St Ives and Christchurch hotels have great spa and function spaces and all do well from the significant demand for coastal breaks and local F&B business.
What are the challenges for coastal hotels?
The main issues revolve around the seasonality of the business. With low demand during the winter months, independent hotels tend to sell rooms at a very low rate. In fact, the rates are often so low, I struggle to see how they can ever make a profit.
How do you juggle the hotels' seasonal nature?
The challenge is achieving the status quo on seasonal rates, which can more than double during high summer, compared to winter. To try and achieve consistency cross the year, we've been growing our central database - doubling it over the past 15 months to just over 200,000 - as well as targeting each general manager to expand their own local databases.
We're also creating more interesting packages through creative marketing and investing in the website, which had previously been text-heavy. We have some unique locations with stunning vistas and outlooks, so it is important that we have great imagery to reflect this.
Feedback on the new website has been very good and we've seen an increase in traffic and bookings as a result.
Additionally, we're embracing social media, both on Twitter and Facebook, where we run campaigns and competitions. We're also working at the cross-fertilisation of the business via our two wedding venues, near Farnham.
With around 200 weddings held at each location every year - involving up to 300 guests at a time at Froyle Park and 250 at Northbrook Park - there is a huge opportunity to spread the word about the hotels.
We've also benefited from the current trend towards staycations and a move away from traditional one-week breaks during the summer.
Guests are more likely to come for two-to three-night breaks, and often come three or four times a year.
Do you work with outside consortia and online travel agents (OTAs) in promoting the hotels?
We started working with [independent marketing and booking site] Mr & Mrs Smith on the Salcombe hotel in January, and so far that relationship has been very successful. Our hotel is the first coastal property in Devon for Mr & Mrs Smith, so it is good for them as well as being an important stamp of approval for us. It is far more important for us to work with an organisation like this, which is all about quality as opposed to an OTA.
When I arrived at Harbour Hotels, I was amazed at the reliance on the large OTAs - at St Ives around 45% of business came via them. Now it is around 18% to 20% across the group, and we're trying to get that down further.
At the same time, we've increased the room rates in the peak months and we're now growing them during the off-peak periods, with campaigns like the "midweek is the new weekend" offer and special autumn spa breaks.
The only way to aggressively tackle the reliance on OTAs is to grow our own database. We don't have a loyalty programme; we would rather drive business locally by targeting past guests and adding value with enhanced packages - for example, by offering a complimentary spa treatment.
How important is food and beverage to the business?
It is hugely significant. We created the Jetty concept, initially as a standalone restaurant at the Christchurch Harbour hotel with our chef-patron Alex Aitken, who started his career as a trawler man. Then when we bought what used to be the Marine hotel in Salcombe and refurbished it to become the Salcombe Harbour hotel, we decided we would do a second Jetty.
That was the start of the restaurant becoming a branded offering across the group. At Salcombe, the Jetty is the only restaurant and is located inside the hotel, whereas in Christchurch, it is one of two restaurants, alongside the Upper Deck all-day dining outlet.
The focus of the menu at Jetty is seafood; although it is not just a fish restaurant, we do aim to exploit the availability of the daily catch. We also have an excellent grill selection. The restaurant is well-priced and designed to capitalise on the views across the water. The concept of Jetty has proved to be very successful in Christchurch and Salcombe, with a loyal following. As a result, we shall be introducing the brand next spring to Sidmouth, which currently has Harding's restaurant, and then St Ives, where we have the Terrace Bar & Restaurant, later in 2016.
Jetty will also go into the two hotels we have planned in Southampton and Brighton. Alex oversees all the restaurants and will be involved in creating the new restaurants in Brighton and Southampton.
Tell us about the Southampton hotel
Construction has now started on land owned by MDL Marinas on what will be our first new-build hotel, enabling us to create the ideal hotel from scratch. It is costing £25m with 85 bedrooms, which will be similar to the ones we've created at Salcombe, and a spa with seven treatment rooms, swimming pool and juice bar.
There will be two restaurants - a Jetty on the top floor of the six-storey property, with a rooftop terrace and a second casual-dining restaurant on the ground floor. It overlooks the waterfront at the Ocean Village Marina and will resemble a super-yacht in design.
We see the cruise market as a real area of opportunity as there really is nowhere of prestige in Southampton for travellers to stay before they set sail or after they return. Corporate clients will also be important to us - we will have a business centre and six meeting rooms.
We will be creating associations with the big businesses in the city, such as Ernst & Young and PwC, and will be nurturing those relationships from the outset. We are not a big corporate operator, but we will be attractive to that market for the strong level of detail and contemporary, coastal chic that we will offer.
The hotel is scheduled to open in June 2017 and I expect it will be one of the most anticipated and talked about that year. Southampton City Council has been hugely supportive.
And the hotel in Brighton?
We have just acquired a hotel on the seafront, close to the pier and the Brighton Centre. A unique feature for Brighton is that the majority of the bedrooms enjoy uninterrupted sea views. We shall be carrying out a full refurbishment of the hotel, which will include the addition of a rooftop pool, spa and Jetty restaurant, and plan to relaunch it as the Brighton Harbour hotel in summer 2016.
How would you describe your interiors of Harbour Hotels?
You could sum it up by calling it boutique coastal chic, with light and bright colours reflecting the location, great showers and mattresses, and Egyptian cotton linen. On the larger projects, such as Salcombe and Southampton, we work with DO Design Studio, a London-based interiors company.
How are occupancies and room rates this year?
Occupancies of around 80% during the first quarter were well ahead of the same period last year, with rates up too. This is largely due to a new centralised revenue management department, where we are now looking at the overall revenue achieved; before, we were concentrating on the total number of room nights sold.
We offer a certain rate for rooms booked ahead as we know we can always get rid of rooms at the last minute by lowering rates - although this doesn't happen as much now. We also focus on trevpar [total revenue per available room], which means we will accept a lower room rate if a couple book a room for two nights with some spa treatments.
What is the ultimate goal for Harbour Hotels?
Our vision is to get to 10 hotels and five wedding venues from the six hotels and two wedding venues we have now. Christchurch is unique in having a standalone Jetty restaurant; I don't see that happening elsewhere, but we will have a Jetty restaurant in all the hotels. The areas we are specifically looking at include the coastline around Bristol and in Norfolk and Suffolk, but we would not forgo a hotel that wasn't on the water if it was the right property.
We're taking on W Communications, a London-based PR company, to help drive business through editorial, which will be particularly key with the launch of Brighton and Southampton. And we're also working with a creative design agency Newl & Potter to expand our great imagery and create a new logo to strengthen the brand.
The emphasis is to position ourselves as escapist hotels, surrounded by beautiful natural scenery and great walks, with quality beds and linens, and good food and wine. We have all the ingredients for a great story here, which is yet to be told.
We're now well on the way to carving out a niche for ourselves in the same way that Hotel du Vin, Malmaison and Firmdale have done.
Harbour Hotels Collection
Christchurch Harbour hotel
•Four AA stars, one AA rosette
•Acquired 2003, relaunched 2009
•Michelin Bib Gourmand
•Acquired 2005, relaunched 2009
Sidmouth Harbour hotel
•Three AA stars
•Acquired 2009, relaunched 2012
St Ives Harbour hotel & spa
•Four AA stars
•Acquired and relaunched 2011
Brighton Harbour hotel & spa
•Acquired 2015, to relaunch following refurbishment as a Harbour Hotel in 2016
Salcombe Harbour hotel & spa
•Four AA stars
•Acquired 2011, relaunched 2013
Southampton Harbour hotel & spa
•Under development, to open 2017
Mike Warren's career path
2014-15 Managing director, Harbour Hotels Group
2012-13 Chief operating officer, Hotel du Vin
2007-11 Operations director, Malmaison and Hotel du Vin
2005-07 General manager, Malmaison Oxford
2001-05 Director and general manager, Hotel du Vin & Bistro Birmingham
2000 General manager, Hotel du Vin & Bistro, Tunbridge Wells
1996-2000 General manager, Hotel du Vin & Bistro, Winchester
1992-96 Hotel management apprenticeship programme, then assistant manager, Chewton Glen, New Milton, Hampshire