Smart and Simple Hotel - Why Tunbridge wells, Kent

Operations Director: William Inglis graduated from Glasgow Caledonian University with a BA in Accountancy in 1997. Upon graduation William joined a boutique hotel company as an accounts assistant and has since gained experience in 3, 4 and 5 star hotels in the fields of food & beverage, Operations and Marketing.

The above named will be responsible for strategic planning of the company, and by utilising their experience, will come together to form an experienced and diverse team.

Concept

Smart and simple hotel… will enter the market with rates marginally above the budget hotel or bed & breakfast, and just below the ultra modern and trendy, four / five star boutique hotels. Our aim is to offer stylish contemporary rooms at value for money rates whilst providing the service levels that guests require and expect.

What is Smart and simple hotel…?
Small:
Manageable, perfectly formed, petite,
Simple:
Effortless, un-complicated, straight forward
Hotel:
Host, warm, welcoming, hospitality

Through our experiences in the hospitality industry we have identified the most and least profitable areas of the hotel business. We intend Smart and simple hotel… to focus on solely on the areas that will return the greatest margins, namely the provision of rooms, the supply of continental breakfast and simple room service, and a bar area for guests to meet.

The areas we have excluded are full service restaurants, clubs and spas. These areas tend to be labour intensive with high fixed costs, and are expensive to operate, and promote.

All Smart and simple hotel… rooms will have wireless broadband, ample space to work or dine and be easy to maintain and clean.

Smart and simple hotel… will aim for a mid to lower market position with forecasted annual average net room rate of about £75.00. The business will be operated 24 hrs a day 365 days of the year.

The largest revenue stream will be from room sales (86%) followed by food & beverage sales (13%) and other revenues such as pay movies, guest laundry, telephone etc (2%).

Smart and simple hotel… will have a well-designed and competitively priced bar that will appeal to both resident and non-residents alike.

Market Analysis

Tourism in the southeast is enjoying a particularly buoyant period (5% rise in visitor numbers is forecasted for 2005 by the Visit Britain organisation). This boom is due to the efforts of organisations like Visit Britain and The Southern Tourist Board. It must also be noted that there were no significant events to affect the industry in 2004 such as foot and mouth, war, terrorist attacks S.A.R.S. etc.

According to Tri Hospitality Consulting, provincial hotels recorded rev pars in 2004 of £45.09, the highest since 2000, and occupancies had only last attained their 2004 level (70.8%) seven years ago. Room rates performed likewise and achieved their highest levels ever recorded (£63.72).

Robert Milburn, UK Leader for Hospitality & Leisure at Pricewaterhouse Coopers predicts record levels for hotel revpars in 2006. He says “This latest forecast supports the view that the key fundamentals are in place for a period of sustained future growth in the UK hotel market.”

New research released from Barclaycard Business Travel in April this year reveals that business travellers are now spending 13% more on hotel accommodation than twelve months ago. The average budget per night, per professional, increased from £81 in 2003 to £93 in 2004 (15%).

Provincial hotels, unlike their London counterparts, are more attuned to factors that directly affect the UK domestic economy than they are to wider global events, and all of the economic indicators point to further stability in the UK hospitality market throughout 2005 and into 2006. Predicted rev par growth for 2005 is 9% for London and 5% in the provinces.

In July this year we are awaiting the announcement of the location for the 2012 Olympics. Whilst 2012 is a long way in the future, for the southeast of England the announcement itself will have a significant positive impact if London does win the bid.

Competitive Analysis

Name:	Rooms:	Rates:	Distance:
Hotel du Vin	35	125 - 175	0.3m
The Spa	73	115 - 205	0.4m
Wellington	74 (36 en suite)	75 - 105	0.4m
Russell hotel	36	60 - 100	0.2m
Days Travel inn	42	55	1.4m
Royal wells	38	99	0.5m

Hotel du Vin operates with average occupancy of 83% and average net room rate of £103.00. The Spa operates with average occupancy of 78% and an average net room rate of £101.75

The other hotels listed above are either to far out of town or in a very different segment to our business.

No Rooms at The Inn...

On Friday the 13th of May we attempted to book a hotel in Tunbridge Wells, Tonbridge, Sevenoaks and Maidstone for Saturday the 14th with absolutely no success.

The first available room found was for the 15th of May (a Sunday) and the average rate quoted was £72.00 net and no further rooms again until the following Sunday

Target Market

Smart and simple hotel… will target both business and leisure travellers through the following market segments; Rack, Corporate, Local Privilege Rate (LPR), Leisure, Fully Inclusive Tour (FIT) / Group, and Special Promotions.

Rooms have been designed to retain traditional features where appropriate, but also incorporate some modern luxuries; good sized showers, lots of lighting to allow guests to work in their rooms, dimmer-switches and ambient lighting for leisure guests, large desks/tables - big enough for laptops and paperwork and equally as practical to enjoy the views over the common with a glass of wine.

E-Commerce Sales

Only three of our competitors currently have websites and only one of them is able to take bookings online. None of our competitors are listed on the Global Distribution Service (GDS), which generally accounts for up to 35% of the business of participating hotels.

The growth of the Internet has brought a whole range of new opportunities to both business and leisure consumers, and many hotel companies are still under utilising the various forms of technology and distribution channels available to them to boost occupancy and drive rooms yield.

By maximising our e-commerce potential and investing in web and search engine optimisation, we will reduce our dependence upon outside agencies that charge commission rates of up to 18%.

The company will benefit from the experience of the directors and management who have implemented the required technology at similar sized hotels in the past and have gained valuable experience in exploiting this technology to its full potential.

A monthly newsletter will keep our strategic partners informed of what’s going on in the hotel and indeed in the local area. This newsletter will also double up as our monthly press release that we will send to our database of press contacts and customers both locally and nationally.

Pro-Active Sales

The key area for building our non-leisure, mid-week business will come from developing relationships with local companies such as PPP healthcare, NPI, Mazda, Pembury hospital etc as well as a host of other companies located on the new industrial estate. Sevenoaks, which is home to many large companies, is only five minutes drive from Tunbridge wells and does not accommodate any significant hotels.

The location of Smart and simple hotel…Tunbridge Wells means that we will also be able to target business associated with Gatwick Airport and Ashford’s Euro tunnel terminal.

We will initiate our “on-the-road” pro-active sales strategy through the Operations Director as soon as the lease is signed, and this will form a significant part of our pre-opening campaign.

Customer Database

The use of an intelligent Property Management System (PMS) will allow us to build a strong database among our customers. We will add to this database the Royal Tunbridge Wells Chamber of Commerce contacts and conduct relationship marketing with the local Spa, Restaurants and the Theatre, and in a very short period of time we will have a valuable collection of names and addresses of people who opted to receive data.

Business Relationships

In addition to targeting local business through meetings and familiarisation trips we plan to incentives our two main competitors to send us their turn-away business, which is currently quite considerable.

By building good relationship with other local businesses such as Thackeray’s Restaurant, The Wells Spa, Hotel du Vin, and The Spa Hotel, we will be able to offer more choice for our customers thus generating a market that no one else is pro-actively targeting.

We have made arrangements with the Wells Spa, a new £2million spa built only three minutes walk from Smart and simple hotel… to package spa breaks and coordinate joint promotions. This is a sole agreement, which no other hotel will be able to make.

Thackerays, a Michelin starred restaurant, is only five minutes walk from the hotel. We have a similar agreement in principle where we will promote the restaurant as our gourmet partner and hotel residents will enjoy a 20% discount. We will be able to package dinner, bed and breakfast rates at very competitive prices.

We intend to use these relationships to market to luxury weekend breaks and to up-sell to o ur corporate clients.

Operational Trends

Greater use of technology and more investment in training will be used to increase efficiency and productivity.

By fully utilising the experience of the management and directors, we will train young people who want to enter the industry and help them to develop into commercially aware and service biased professionals who will grow with the company. As can be seen from the organisation chart, almost 25% of the workforce are trainees. This can be achieved because the senior executives have previously performed at top management levels and are now able to provide the necessary training and guidance.

By investing in our staff they will act as our sales people. They will be trained to treat every interaction as a sales and marketing opportunity and will be encouraged to interact with guests to gain information about their requirements and be empowered to go that extra yard to meet them. Keeping our team motivated and interested will ensure happy friendly people greeting our guests and allow us to achieve higher retention levels which will, in turn, promote further development and future growth.

Marketing Strategy

Good people providing good simple, efficient, service in good environments will be the success of Smart and Simple Hotel We will adopt an aggressive marketing plan to build the brand and develop awareness paying particular attention to website traffic. We will continually strive to build new business while looking after our existing guests. Our staff will be our number one sales people from day one, with great effort being put into our trainees and their development.

The management will endeavour to create and maintain a positive, appealing image for the company. This image will be consistently portrayed through the marketing activity.