News & views

Newsletter January 2016

It
has been a while since my last newsletter - I hope you all had a good Christmas, and New Year!

A record year for UK hotel transactions, in 2015 and this year will see another busy time in the sector with a number of major deals in the offering.

Following the completion of around ￡9b worth of hotel sales last year, the regional UK market is again expected to be an attractive one for investors in 2016, with prices continuing to rise, although at a slower rate than recently.

Among the major hotel sales last year were those of the 176-bedroom Radisson Blu Bristol, which was sold to an undisclosed overseas investor for more than its ￡21m guide price; the 151-bedroom Hotel Indigo Liverpool, acquired by MCAP Global Finance for more than ￡11m; and the 351-bedroom Arora Hotel Heathrow, sold to US hedge fund Davidson Kempner off a guide price of ￡45m.

And as recently as this week the Lygon arms hotel part of the hotel collection group formerly Barceló has been sold to the owners of Chewton Glen who also have the lease on Cliveden.

The hotel collection continues to sell off some of their properties and have just sold the Marine hotel in Troon.

Contracts have also been exchanged on the London Road Fire Station site in Manchester, which has stood empty for 30 years after a failure by its former owner Britannia Hotels to develop it as a 227-bedroom hotel. It is not known whether a hotel will form part of the development plans for the building by its new owner, property company Allied London.

“They say” there will be continued interest from high net-worth individuals, institutional and overseas buyers. Asian investors, particularly those in China, where they have created a bubble, and are looking to invest in what is regarded as a safe haven within the UK.

Beyond China, expect to see interest in the UK hotel sector from Malaysia, Thailand, Singapore and Taiwan -  these market places have slowed slightly over recent years, so outside investment in a growing economy suggest this will be a continuing trend.

Other news, Compass hospitality are also set to expand further in the UK market place over 2016 having already  acquired the lace Market in Nottingham, another in Shrewsbury, Halifax, Cheltenham, Cardiff & Eastbourne to add to the portfolio of hotels in South east Asia, a company to watch this year.

Pay, always a good one in the hotel industry!!!

Service charges scrapped at the Gallivant, while staff receive share of profits - good idea?

Harry Cragoe, owner of the Gallivant since 2010, said that he has made the changes to the pay structure in order to create an environment where the staff feels they are valued as an integral part of the team and will enjoy the benefits of the hotel’s success. The restaurant’s ￡500,000 turnover in 2010 is expected to reach between ￡1.5m and ￡2m during the current financial year.

Cragoe said that in his previous business – PJ Smoothies, which he spent 10 years building in the UK before selling to Pepsi in 2005 – he paid people on their performance and ability and did not understand why this did not happen within the hospitality sector.

“I did not like the tronc system where money is shared out equally between staff, without taking into consideration that some people may work harder than others,” he explained. “I therefore decided to introduce a performance-based bonus, paid out on meeting incentive targets on a quarterly basis, with a share of the overall profit of the business distributed at the end of the year.”

Cargoe said the initiative was all about creating some kind of ownership of the business the staff, and will, he believes, have a positive impact on the bottom line. “If staff are working in a better environment and are happier, they will be more productive,” he continued. “The hospitality business is all about making people happy. If staff is unhappy, it is very difficult to achieve success.”

Absolutely integral to the success of operating the new system, according to Cragoe, is the need to provide training to enable the staff to do their jobs to the best of their abilities, whether they are a kitchen porter, housekeeper, waiter or sous chef.

Unsurprisingly, staff at the Gallivant are enthusiastic about the new working terms and applauded Cragoe when he explained the new working conditions at a team meeting. Guests are equally impressed that they are not expected to pay a service charge.

I think this is a positive move, pay and working hours, have always been an issue in the industry along with the correct training, and staff development.

Some of the position we are currently recruiting for

• Exec Head chef Vietnam,
• DOS Vietnam
• Deputy General Manager Thailand
• Head chef uk
• Engineer Jordan
• Butler Jordan
• Front of House manager uk
• Restaurant manager 3 rosette UK
• Head housekeeper UK
• Event Manager UK

I hope you find the information of interest.

If you have ideas for discussion please contact me through LinkedIn.

Kind regards

Roger