This c90 bedroom resort style property sits on an estuary location about 8 miles from Torquay. It is privately owned and the site has been in the same family ownership for over 50 years. Bed stock has been increased over the years from 38 rooms in 1989 to its current size, and the property also features a timeshare operation, full leisure facilities and indoor pool, good sized meeting and events space and an inn on the site (which falls outside of the project remit).
Assured Hotels were introduced to the owner by Santander in May 2011 due to ongoing concerns with business performance, and its ability to service its debt based on current trading and costs.
At the time of our introduction, the property had only ever performed above 60% occupancy in one month (August 2010) since operating as a 90 bedroom hotel many years ago. The property had previously relied a great deal upon the corporate and conference market for occupancy, and since the onset of recession in 2008, these revenue streams quickly tailed off.
As at end of P9 for FY14 the hotel is performing 41% ahead of 2011 revenue and 73% ahead of EBITDA. A number of bedrooms have undergone a soft refurbishment, financed out of trading cashflow.
The immediate challenge and focus was therefore to both replace this corporate business with leisure travellers, and to work on reintroducing corporate and conference business back into the hotel.
Activity undertaken to effect business turnaround has included the following:-
- A strategy to get a known brand presence behind the business was suggested and as a result the property was accepted into the Best Western brand in 2012. Since joining, Best Western have so far produced £750,000 of bookings
- Recruitment of a full time Sales and Marketing Manager who commenced at the beginning of 2012. This role is to primarily act as the conduit between the hotel and BW, and to focus on proactive Sales and Marketing activity, primarily in the corporate and conference markets.
- Full analysis undertaken of all hotel costs and suppliers, particularly those representing highest level of spend. As a result of these findings, a food purchasing group was introduced with annualised potential cost savings identified of 14%.
- Rate strategy has been agreed and now in place, managed on a daily basis by the Sales Manager. The business has now performed above 60% occupancy on 31 of the 39 months of our involvement after only performing above 60% on just one month over the past 8 years. Annual occupancy for 2014 will finish at 71% increasing to 75% in FY15.
- Detailed monthly MI now produced in conjunction with Assured Hotels
- Assured Hotels now visit on a monthly basis to monitor performance, and meet regularly with Santander and the owner to review status