Assured Hotels was contacted directly by the owner of the 44-bedroom Moorland Garden Hotel, who understandably had concerns over its historical and ongoing performance. Our primary objective in our appointment is to assist revenue growth and improve the EBITDA conversion to a recognised level for a property of this size.

The business was trading at a loss despite the annual c£1.6m top-line revenue. Assured Hotels, therefore undertook a full financial and operational review of the property and quickly established that:

• Total turnover was adequate, but the sales mix was over-reliant on lower-margin/high-cost food and beverage outlets, particularly weddings and events.
• The revenue growth potential from the bedrooms was significant, but poor practices led to much lower KPIs in both occupancy percentage and daily rate.
• Profitability was further compounded by a lack of a cohesive procurement policy and no recognised cost management or controls; reduced margins damaged the business when we consider over 65% of revenues were from F&B sales.
• Payroll was an urgent consideration as it was running at almost 50% of revenues as a cost (the industry expectation was 33-37% max).

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

Our review quickly highlighted areas where benefits could be achieved. Good engagement from management by working with our team, results were swift and significant:

• Supply savings by switching to Assured Hotels routes of between 8% & 19%. Specific examples:
  • Food purchase savings of 9% on like-for-like purchasing
  • Chemical, disposables and sundries purchases saving of 19%
  • Beverage purchase savings of 9.93%, with an additional 3% quarterly retro to the hotel on spirits, softs, bottled beers and wines
• Management controls implemented, including weekly and monthly reporting to Directors & Assured Hotels, price point and costing regime and improved business forecasting
• Payroll forecasting hit the target of 37% in year 1, meaning a cash saving of c£80k
• Revenue Management and improved bedroom sales & distribution, leading to an uplift in room revenue to £690k (from £540k), improving the room sales mix to 43% (from 33%)

In addition, the Assured Hotels team continued to work closely with the hotel’s team to assist in developing the key personnel on-site. The objective was that the team’s competencies and abilities on-site improve alongside their financial performance, ultimately reducing their dependency on Assured Hotels management over time.

Update to Outcome – the Moorland Garden Hotel was unfortunately a casualty of the pandemic lockdown, and struggled to the extent that the owners decided to market and sell the assets. Whilst the going concern had been lost to the forced closure, we assisted alongside the appointed receiver from BDO Bristol office.

Value was protected, and the Directors completed the sale of the assets with a surplus to the main creditors. The property has since been redeveloped into a premium care home.

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