After an immediate freeze on investment as the recession took hold, green shoots are evident throughout the hotel industry as more and more venues go through significant upgrades to win back the numbers of old.
It seems understandable that so many hoteliers – well, lets be honest, more and more nowadays it’s a number of suits involved in an ‘investment group’ – refrained from ‘unnecessary’ financial outlays as visitor numbers dropped, business fell away and margins vanished towards the end of this millennium’s first decade. However, following a few years of struggle, CSO figures, Failte Ireland reports and Tourism Ireland announcements have shown that there is now, at the very least, a stabling of tourists, and in some areas even significant increases in hotel dwellers.
With that, there comes a decision for businesses around the country: Do you stick, or do you twist? While those dastardly stockbrokers use horrid terms like ‘speculate to accumulate’, unfortunately, sometimes they are right. While throwing good money after bad is a futile last roll of the dice by many a failed businessman, well-thought, conscious approaches to a planned strategy can often work out in your favour.
Whether it is simply a refreshing new paintjob, a revised menu in the restaurant or an entire re-haul of the bathrooms, one situation remains key in our industry – you have to stay ahead of your competition. In today’s Ireland, where news is disseminated through a myriad of media at eye-watering speed, it is even easier for others in your profession to keep abreast of your activities – and, to be fair, even before this online age, Ireland was hardly a place to hide your secrets.
“Oh you see it,” explains Martin Mangan, general manager at Dublin’s Conrad Hotel. “You’re in and out of your rivals hotels all the time for numerous reasons, but largely because it’s a small town. You also hear a lot, see it in the media, in magazines etc.” There are three options for hotels, it seems. Invest, if you feel that will suit your business and your customer base best, cut back on certain fruitless business avenues, if again you feel that is the right approach, or if you are in the situation of having RBS or NAMA in control, motor on in a zombie-state
“We have it a year now so we had to close it for a couple of months to get the heavy duty stuff done,” explains Laura Moore of Aherlow Hotel in Tipperary. Atlantic Hotels (AHS) took over the property – which is sister site to Ballykisteen Hotel and Waterford Castle to name but two – before overhauling the entire venue. “A lot of the work, dry walling and big jobs such as getting the terracing redone, function room taken out of operation for a month, lighting and heating, that was all done then.” Traditionally Aherlow closes during the midweek in January and February, which allowed Laura and her team enough time to get a lot of the work done and dusted. “There were three big areas that we looked at. First, the terrace out the front was a big job. It was completely redone, paved and sorted out. That was the first dramatic thing changed – I guess along with that we also painted the outside of the hotel, so from that perspective the exterior was one big job. The second part was then the restaurant. We had an interior designer and she decided to work with the three different dining rooms separately, they all took on an identity. Historically this was a hunting lodge so trying to keep the theme was a big thing. The restaurant is much brighter now.” The third stage in Aherlow was the lodges – the hotel has 29 bedrooms and 15 lodges on its property. “The bedrooms are next,” claims Laura, although it has been quite a huge overhaul since 2011. “A lot of the rooms are front facing onto the mountains, with great scenery, but some rooms may need a bid of a look, the odd sink or something. To be honest if we left them for a few years we’d be fine, but we just want to keep the momentum going. And, we want customers to see we are improving everywhere, we want it all at a high standard.”
Of course, chucking money at a business isn’t the be all and end all, there have to be fruits of your labours on offer. In Aherlow, for example, the resulting restaurant has proved a huge success, so too has AHS’s work on Aherlow’s new website. “We’ve done a lot with our online marketing,” says Laura, which is probably the one area that has universally received attention across our industry in recent years. “We’ve teamed up with Avio and we just had a meeting about how our online visitors had doubled since last year, online business is up over 60 per cent too.”
It’s difficult to quantify the value in investing, as each situation brings different opportunities and results. Everyone we spoke with who had invested were adamant that it had helped them attract new business, however there is also the indirect effect on profits which can be brought. Customers clearly like to see hotel’s consistently investing, fixtures changing, wallpapers upgrading, carpets replaced – all while keeping the feel of the venue consistent. However, it’s not just for the customer, these benefits. Take staff for example. “The staff were thrilled,” claims Laura. “They feel like they own it, the emotional commitment from generations of staff working here is always apparent. They saw it as an investment into themselves.” Happy staff is a huge step towards high quality service, and efforts like this don’t go underappreciated. “I had a sit down with the kitchen staff in October, saying there’s a delay on getting the new washing machine until the floor was done in January and they all were perfectly happy,” explains Martin in the Conrad. “In that regard they forego the new item, which will clearly ease the workload, safe in the knowledge that we were continually investing. They appreciate that.”
However, it is often things not visible to the discerning eye which sees hoteliers shirk away from often substantial investments. Behind the new wallpaper, the upgraded cutlery and the modern carpet there lies hours of painstaking ‘backdoor’ work that often goes underappreciated. The Conrad is one of the hotels that went down the ‘spend’ route, embarking on a multi-million capital investment plan “which just had to be done,” claims Martin. At the high-end of the hotel world, there is clearly an impetus on such establishments to keep the more affluent guest at their happiest. “We look at our level around the world, then say ‘What’s new? What would suit us?’. We have a five-year capital investment plan that we are looking at. That is really just looking at the nuts and bolts of the building, maintaining it. We have replaced the fire alarm system, cctv system, all the public lighting is LED now, we replaced our hot water plant and our boilers.” This is excessive alterations which the paying punter is not immediately aware of and in Martin’s case a couple of million euros has been invested in the past few years.“We only just upgraded the floor in the kitchen. That cost us €70,000. It’s high tech, much easier to clean and far more grip so, from a health and safety side of things, it’s a huge improvement. That was a big old job. We had to gut the kitchen, move our operations elsewhere for a few weeks to get the job done. We put in a new state of the art Winterhalter dishwasher to replace an older one which used twice the water – it cost €30,000 but there is some pay back on it.” Over the past 18 months, Martin and his team have also replaced all the evaporators, both ovens and moved the pastry kitchen up from the basement of the hotel to the main kitchen. “That has improved profits to do with efficiency because all the staff are together now, we've painted and redecorated everything also.”
Martin has already seen the more aesthetic side of his business receive some attention. “For example, Nespresso coffee machines in all our rooms is now standard. In a few years, I reckon that will be the same across three-, four- and five-star hotels, but at the moment, for us, it’s definitely a necessity.” Elsewhere, docking stations for modern media devices have been installed in every room, with bathrooms in each room receiving significant investment also. It’s important to offset the costs by looking at avenues which show returns. Investing in new recycling systems, staff training and waste reduce management is one immediate way to start. Again, when this is done it makes your premises ever more appealing to a customer who, nowadays, has other options only one click of the mouse away. The structural side of upgrading is obviously a costly and oft under appreciated side of things, while the superficial changes can prove quick-fixes and crowd pleasers. However, in general, investment is more than just a financial outlay. It is commitment to a business, a labour force and a client base. All three together prove a convincing argument to look at improving your business. Of course, not everyone is going to be happy. “My chef just came back from a three-week holiday in Florida to a kitchen that has had a new floor put in for €70k. He said: ‘What’s next?’ You just can’t win!” laughs Martin.