At the start of December, Bespoke Hotels took on the management of the 34 hotels of Oxford Hotels and Inns, expanding its eclectic portfolio of boutique hotels to 97 properties worldwide, though this was not in time to have a significant impact on trading over the Christmas period.
However, it did spur H&C News to take the opportunity to look in more depth at Bespoke Hotels, which now has a significant national presence across the UK, and whose hotels are organised and marketed under sub-group brands such as Beloved (4 star deluxe hotels) through to Befriend (3 star value-for-money options).
Flagship hotels that joined with Oxford Hotels deal include the Carnoustie Golf Hotel and Elemis Spa, host to The Open Championship 2007; The Lugger Hotel in Port Loe, Cornwall, voted by the Sunday Times as the best new seaside hotel in the world; and the award winning Craigellachie Hotel with its AA rosette restaurant and world renowned Quaich Bar, boasting 700 different Single Malt Scotch Whiskies.
Not forgetting the management of the recently opened Wellesley Hotel in London.
We turned to Haydn Fentum, CEO of Bespoke Hotels, to learn more about the Bespoke Hotels way of operating, and to hear his views on the UK hotel market in the year ahead.
Background
The Bespoke Hotel Group was founded in 2000 by Robin Sheppard (chairman) and Haydn Fentum (CEO), who with non-executive directors Lord Daresbury – previously Chairman of De Vere Hotels – and David Clarke past CEO of Best Western have over 100 years’ hotel experience between them.
From a base of just three properties in 2001, the company has expanded steadily over the course of 10 years, with everything from short-term turn-around projects to new-build and ownership.
The sale of Billesley Manor, Combe Grove Manor and The Lygon Arms at 11 times the original equity investment was the launch-pad for the company to carve out its own niche – developing a range of different ownership, investment and management models so that partnerships could be developed as appropriate based on each property and its commercial trading status.
It’s worth noting that Bespoke Hotels has grown primarily through management of hotels, but that its collection of 97 hotels is not confined to the UK – operating in Europe, the Far East and the Caribbean must keep management fully stretched!
Roots of success and growth
Clearly, the years of experience referred to above have been invaluable, ensuring that Bespoke Hotels maintain a ‘feet on the ground’ approach that seeks to work with owners to establish what rate of return they seek, and how best to deliver against the parameters provided by those owners. For each owner, their management is indeed ‘bespoke’: tailored to deliver the best rate of return possible.
In the present and ongoing economic recession, this approach is understandably very welcome to owners.
And, of course, Bespoke Hotels carries no debt burden or other legacy that can distract it from its primary objective of offering a practical, efficient solution to under-performing hotel assets.
Current trading
Overall, Bespoke has shown growth over the festive period, and expects continued but modest growth in the first quarter of 2013.
Whilst 2012 overall will have shown single digit growth over 2011, it is difficult to forecast how 2013 will develop: long periods of bad weather in 2012, the impacts of major events such as the Jubilee and then the Olympics, combine with continuing economic uncertainty in 2013. In addition, residential conferencing remains weak, whilst the corporate market is also extremely cost conscious. Every pound, therefore, is hard-earned in a very competitive market.
On the other hand, the ‘staycation’ trend may grow, and better weather would help to attract more guests on both long and short stays in the UK.
In the meantime, Oxford Hotels are already benefiting from online bookings made through the Bespoke website, and the larger portfolio means that Bespoke can offer a wider, better range of options to prospective guests.
And – Bespoke is working to launch its own guest loyalty programme in the spring of 2013, recognising the importance of engaging and retaining existing customers, as well as attracting new ones.
‘Industry’ challenges and opportunities in 2013?
For all the reasons outlined above, Haydn Fentum expects market conditions in 2013 to remain tough and competitive in the regions, and ‘OK’ in London.
And opportunities? Will 2013 bring the widely anticipated disposal of regional hotel assets as a result of banks finally deciding to cut their losses and/or clear their books?
So far, either prices have (still) not reduced sufficiently to attract investors and investment funds looking for opportunities, or speculative buyers still do not have access to sufficient funding and the necessary appetite for risk.
For a management company, hotel disposals/acquisitions can provide opportunities as new owners look to sort out their newly acquired assets and seek new management in order to do so.
In addition, ‘operator fatigue’ may become an issue in 2013: senior managers that no longer have the prospect of an equity stake but have been working very hard to maintain the performance of their business may, finally, decide to call it a day. Here again, asset owners may then bring in new management.
All in all, 2013 seems likely to be another busy year for Bespoke Hotels…