Assured Hotels was contacted directly by the owner of Bredbury Hall Hotel, a 150-bedroom full-service hotel and engaged in an advisory capacity in May 2017; AH was then appointed on an initial 2-year agreement to run this struggling full-service asset in the North West of England. Profit margins had reduced over the prior two years through both sales regression and poor management of costs & payroll to a point where an EBITDA conversion of less than £350k at a margin of just over 8% from £4.3m sales at the end of FY 2016/17 was unsustainable.

Stakeholders recognised that something needed to change and supported us through some difficult decisions, particularly:

Payroll reduction of £220k of fixed annual salaries through redundancies. These were roles not required from an out-of-date top-heavy structure or others where AH personnel picked up responsibilities under the scope of our engagement.

Turnover of the business was adequate but mostly propped up by a high volume of lower-margin/high-cost food & beverage offers via voucher sites.
Revenue growth potential from the bedrooms was significant, with poor practices leading to much lower KPIs in occupancy % and rate management to industry expectations despite underinvestment in the bed stock.

Profitability was further compounded by a lack of a cohesive procurement policy and no recognised cost management or controls, impacting margins. For example, food costs were running at 50%. This is particularly problematic considering that over 55% of revenues, circa £2.4m, were generated in F&B outlets.

Assured Hotel’s team immediately started working directly with senior management to implement the required turnaround strategies & partner introductions.

Just trading the asset harder allowed us to achieve sales growth driven by better process, improved sales mix, better purchasing controls, and general operating standards. The business started to recover almost immediately, delivering £800k EBITDA, a more acceptable margin of almost 20% from £4.6m sales in the full year.

This subsequently allowed the owner to refinance the business with a new lender, which also allowed a cash injection to address overdue CAPEX, allowing us to start repositioning the business in the medium term. Despite the disruption brought about by the pandemic, Assured Hotels then assisted in selling the much-enhanced hotel asset as a going concern to a new owner in 2022.

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