Lynn Hood, The Belfry Growth, Growth, Growth What Does the Next Financial Quarter Have In Store?
10 Trends Shaping Customer Expectations and Decision Making Change is Afoot ... Are You Prepared?
Why You Should Not Invest Heavily in Mobile Apps
Flood Damage! Beware of Memory Loss Donâ€˜t Fall at the Last Hurdle Dealing With Staff Problems
Hotel Industry Magazine Q2 2014 – ISSN 2051-0632 Editorial Editor: Lee Jamieson Email: firstname.lastname@example.org Editorial Contributors: Anne Blackburn, Graham Burrell, Mark Chambers, Andrea Collins, Caroline Cooper, Lynn Hood, Lee Jamieson, Vicki Jamieson, Conor Kenny, Ioannis S. Pantelidis, Graeme Smith Hotel Data Partners: BDO, Euromonitor International and Zolfo Cooper Digital Web: www.hotel-industry.co.uk Data Centre: www.hotel-industry.co.uk/data Twitter: @hotel_industry Facebook: www.facebook.com/hotel.industry Jamieson Media Hotel Industry Magazine and hotel-industry.co.uk are published by Jamieson Media, a UK Registered Partnership Website: www.jamiesonmedia.co.uk Email: email@example.com VAT Registration No: 127 7969 65
The opinions and views contained in this publication are not necessarily those of the publisher. The publishers regret that they cannot accept liability for error or omissions in this publication, however caused. All information in this publication is provided for general use. The publishers advise all readers to seek specialist advice before acting on any information contained in this publication. Readers are also advised to directly contact advertisers and companies mentioned in this publication in order to qualify the claims made, adherence to regulation and financial security. No material in this publication may be reproduced in any form without the prior written permission of the publisher. © Copyright 2014, Jamieson Media
There is a wonderful theme that threads throughout this issue of Hotel Industry Magazine: Growth. It‘s been a long time since we‘ve been able to write about growth in any substantial or robust way, but it does finally seem that the hard times are behind us. Our quarterly review of Q1 2014 (page 8) shows robust performance and our forecast of Q2 2014 (page 10) reveals growth in both the boutique and budget sectors. But, as Conor Kenny says on page 28, ―recession uproots everything‖ ... but have we really adapted to the new rules of business?
write our Leading View (page 5): how important will F&B be in this brave new post-recession world? Moving Away From Boutique So, it finally seems that the UK hotel industry has found its way again. We know where growth is coming from, and there is finally a plan to capture value from this growth.
If you are not sure where to begin, But it does mean that the market is then turn straight to page 16 and read going to change ... but that‘s OK. our feature on the top 10 trends shaping tomorrow‘s hotel guest. In my view we‘ve become far too focused on ―boutique‖ in recent years But in a world where innovation has - the industry needs to diversify again become a commodity, hoteliers would to avoid a ―bubble‖. do well to reinvest in the basics. Innovation doesn‘t replace the need We‘ve got growing segments in chicto do the basics really well! With this budget, capsule and aparthotels. This in mind, we invite The Belfry‘s is exactly how it should be ... and it‘s managing director, Lynn Hood, to long overdue!
1. Check the ―heart rate‖ of your hotel. Is your F&B a ―needs must‖ or ―place of choice‖ 2. Invest in your F&B teams both in terms of product knowledge and their commercial understanding 3. Talk to your chef. What is trending in F&B from a concept and taste perspective? How can this benefit your overall business? 4. Ask yourself: ―would I choose to dine in my restaurant or drink in my bar?‖ 5. Decide who is leading F&B in the absence of a highly skilled F&B Director
Throughout my career, I have been fortunate enough to work for some of the world‘s leading hotel and leisure brands, including Walt Disney in America – where I started my career, through to Malmaison, City Inn hotels and The Belfry where I am currently serving as Managing Director. My career has centred on food and beverage, as I spent a significant amount of time in my earlier years training in the kitchen, before moving onto more managerial roles where I worked with both traditional fine dining as well as more modern fast-paced dining environments within hotels.
destination of choice!
Traditionally, hotels were seen as a place for discerning diners to go for a great meal and unique dining experience, although expensive prices probably meant that these visits were only reserved for special occasions.
This hotel had built up years of goodwill, winning best newcomer restaurant and attracting more than 50% of its restaurant trade from outside the hotel itself. It is now slightly soulless and functional when it comes to food offering, which is sad to see compared to the iconic status it once held.
However, due to the expense of high quality food and beverage, I think some of the bigger hotel brands have neglected this area, and chosen to focus their expenditure elsewhere. I acknowledge that for certain budget chains or business-centric hotels, their main focus will be elsewhere, with food and beverage generally being outsourced, however it is a dangerous trend for the industry if hotels are just to be seen as somewhere to ‗get your head down for the evening‘ as opposed to somewhere you can escape to for a memorable experience. As a by-product of this trend, there has been a decrease in demand for professional Food & Beverage Directors and Managers across the industry in the UK. Therefore, highly regarded and skilled individuals are being forced to pursue their careers in this field internationally, and we are losing some great talent. Functional Food
I ran The City Inn Riverside Hotel in Glasgow with a fabulous waterfront and outside terrace that was perfectly located and designed to be one of the most desired dining experiences in the area. The hotel was subsequently These experiences have fuelled my bought by an investment company passion for this area and belief that and rebadged under a well-known great food and beverage should be at international hotel chain. the centre of any successful hotel. They added a pre-packed microwave However, I am concerned that this service in the lobby for all to see ... may have been neglected across the not exactly an inspiration for industry. continuing to make this a dining
I appreciate that this is more of an extreme example, but feel it demonstrates just how some hotel chains may come in and disregard F&B as a needless expense, and capitalise on a time-starved, captive audience. Thereby failing to appreciate how this contributes to the overall guest experiences across the hotel or resort. Return to Boutique The age of the boutique hotel revolution in the mid to late 90s witnessed hotels becoming a place to dine and be seen, when entrepreneurial hoteliers saw the merit in creating a heart for the business through vibrant bars and unique restaurants that encompass the finest aspects of the hotel. This is something that I would love to see us get back to; where hotels are thought of as much more, as somewhere to escape and spend your valuable leisure time – which can also be tied into the wider leisure facilities as well as the food and beverage offerings. I strongly believe that the importance of great food and beverage should not be overlooked, as it not only provides a strong income stream for the hotel, but also benefits the wider aspects of the resort and business. Customers are attracted by the food, stay for the weekend, and subsequently spend money on the rooms and wider aspects of the hotel.
Great resorts have great restaurants and bars, and great chefs are worth the investment as they can extend their knowledge to add value and enhance the experience for conferences, events and weddings, all of which increase revenues. Winning F&B This applies to our approach at The Belfry, where as part of our ÂŁ26 million refurbishment we wanted to put gastronomy at the heart of the new resort and make it into a culinary hub of the West Midlands. We have invested in leading talent by bringing in award-winning Chef Director Glen Watson along with a host of other well renowned chefs and trained bar staff, who have created a number of signature dishes and cocktails to add to the all-round experience amongst the luxurious
surroundings. I acknowledge that food and beverage at resorts can successfully operate in a number of different ways. For example, Martin Wishart at Cameron House on Loch Lomond is a prime example how franchising out this part of the business can prove beneficial for all parties. The restaurant is a highly desired dining experience across Scotland, which therefore provides resulting benefits for the resort, elevating it to a level above its competitors. At a more boutique level, award winning and 2-star Michelin chef Michael Caines added his culinary expertise to the Abode portfolio ensuring it punched above its culinary weight, adding a complementary dining experience to the much desired bedroom product making these hotels highly regarded hotel destinations.
Even if you donâ€˜t have the budget to spend significant amounts on bringing talent in to provide expertise in these areas, you can most definitely still create unique experiences for guests and diners alike. Hoteliers need to strive to provide a special service that is unique to the hotel and restaurant, by looking at signature dishes and unique elements to set you apart. I hope the realisation that food and beverage needs to be at the centre of a great hotel has started to hit home across the hotel industry, and that we can get back to an era where this is a key part to most strategies. Not only can this bring substantial benefits in terms of finances and profile for the hotels, but it will hopefully bring hotels right back to the forefront of the hospitality industry.
Hoteliers started the first financial quarter of 2014 with a spring in their step! The economic outlook has improved and data for Q1 show this has translated into more confident consumer behaviour. The subsequent increase in rates has created a firm footing for the year ahead. In January, regional hotels experienced a good performance posting a 3.8% occupancy growth to 56.8% and a 4.3% room rate increase which helped rooms yield grow by 8.2% to £31.65. Scotland (9.9%) and England (7.9%) were the best performing regions, due to increases in both occupancy levels and room rate. The Capital experienced more modest occupancy levels increase, up 1% to 68.8%. However it was the room rate growth in both Inner and Greater London that (+5%) drove rooms yield performance up 6.1% to £73.45. Strong Results This sustained recovery continued into February when hoteliers in the regions experienced an amazing performance on the back of flat results from the year before. Rooms yield grew by 10.7% to £40.63, as the rise in room rate from £54.76 to £58.17 (6.2%) was the main driver of the growth. Occupancy was also up by 4.2% to 69.8%. Hotels in the capital also saw rooms yield growing from £87.83 to £92.80, a 5.7% increase. Occupancy remained stable at 77%, while rate was up 5.6% to £120.52.
Evolving Landscape This long-awaited talk of growth is supported by strong performance results in Q1 2014, However, the business landscape is evolving for hoteliers. The budget sector is driving growth in the regions, benefiting from a boost from cash-conscious consumers. London is benefiting from the return of the corporate market, driving strong occupancy during mid-week. The increase in rate experienced in recent months bodes well for the future. The year ahead looks bright and operators remain confident that the sector will continue to grow.
0207 893 2143 www.bdo.co.uk
Dig deeper into BDOâ€˜s figures in our interactive Hotel Industry Data Centre. Benchmark your occupancy, RevPar and rate by location and sector with our interactive graphs and visualisations. Discover More: www.hotel-industry.co.uk/data
What can hoteliers expect in this quarter‘s pipeline? It can take years to bring a hotel on stream. Plans to create these new hotels will have been made based on a number of factors, including the returns being generated by existing hotels and projections of requirements for the future as well as trends in land prices and the economy. Data for the hotels due to be launched in the next quarter show that healthy numbers of hotel rooms are about to open in Q2 20141. Analysing the number of new rooms by the type of hotel accommodation shows that, of the 3,920 new rooms to be added to the UK‘s stock in Q2, 45% will be 4*, 37% will be budget, 11% will be 5*, 5% will be apartments and 2% will be 3*.
Rooms Opening in Q2 2014 By Major City 1. London 2. Edinburgh 3. Liverpool 4. Glasgow 5. Bath 6. Cambridge Other
This reflects the proportions of the number of each type of hotel, although aparthotel openings tend to consist of fewer rooms than other new openings. Outside London, Edinburgh will see the most new rooms added to its stock, with 17% of the quarter‘s new additions outside London, followed by Liverpool and Glasgow, each with 10% of regional rooms. Other regional cities due to gain new rooms are Cambridge (8%), Bath (6%) and York (1%). Regionally, London and the South lead the way followed by Scotland.
(Rounded % by Major City)
Will Visitor Numbers Group? Traditionally hotel demand tracks GDP as economic activity drives business and leisure travel. Forecasts for the UK economy predict a 2.8% increase in GDP this year and 2.4% next year. In addition, claimant unemployment is expected to fall from 1.3 million in 2013 to 1.1 million in 2014 and to 1 million in 2015.
61% 7% 6% 4% 3% 3% 16%
Rooms Opening in Q2 2014 By Region
All this means that UK residents should have more disposable income to spend, among other things, on hotels and travel.
1. London 2. South 3. Scotland 4. North 5. N Ireland
As for inbound visitors, statistics from VisitBritain show peak visitors numbers in 2007 at 32.8 million, after which visitor numbers dropped. But they are now recovering and topped 32.5 million in 20132. Average spend continues to trend upwards, but stays have been getting shorter since 2002, dropping to 7.4 nights in length according to the most recent data.
(Rounded % by Region)
This visitor data looks positive, as does economic data. This, together with the increasing range of debt providers and the greater ease of obtaining finance, suggests that the pipeline should continue to increase.
However, the world is experiencing a period of rapid technological and social change, while the market is also subject to rising land and property prices.
The combined effect of these factors on the UK market is that the mix and type of hotels in the pipeline is likely to change. Budget Explosion At 45% of the total Q2 openings, 4* hotels make up the majority of hotels and rooms. The second largest sector of openings in the next quarter is budget hotels, making up 37% of the total Q2 pipeline. Within that is a growing number of typically high tech, small footprint, design conscious rooms - as small as 7square meters at Yotel, 8 â€“ 12 square meters at ZHotels and 17 square meters at Moxy Hotels. Two budget hotel openings this quarter are especially notable: Zhotel
Sources: 1 AM:PM, data as at 9 April 14 2 ONS: Overseas Travel & Tourism 3 Savills Serviced Apartment Report Oct 2013
61% 17% 13% 8% 1%
4 LJ Research 5 The Scotsman Monday 7 April 2014 6 Clyde Waterfront
Glasgow and Zhotel London - and there are more in this year‘s pipeline. As well as growth in the budget segment, aparthotel room numbers are also growing rapidly, along with new ‗sharing economy‘ entrants to the accommodation market, such as Airbnb. At a $10billion valuation on IPO (without providing balance sheet access to investors), Airbnb has a formula that the equity market clearly favours. While views on the level of impact of Airbnb and its peers on the hotel market differ, it undoubtedly increases consumer choice and it would appear unwise for hotel companies to simply dismiss it. In some ways the major chain hotels‘ new style-conscious, high tech hotels are also aiming at the same traveller: the experienced, technology savvy, style conscious millennials. The serviced aparthotel market in the UK is far behind that of the US where it accounts for 12% of all room sales; it‘s only 5% here3. Recent new additions to the aparthotel market in London include luxury versions clearly aimed at taking share from the 4 and 5 star hotels. But they are also expanding into the regions as part of the growth in the budget room sector.
Scottish exceptions Aberdeen is a long-term star performer with exceptional occupancy, room rate and a RevPAR which is consistently higher than anywhere in the UK except London. The main driver of hotel performance in Aberdeen is business travel, primarily for the energy sector but also for manufacturing, and professional and scientific businesses.
the highest since monthly record keeping began in 1999. This summer‘s Commonwealth Games is already having an impact on Glasgow hotel rates. Recent coverage5 claimed that the majority of rooms have been booked for those directly involved in the Games, which may leave many visitors unable to book hotel accommodation. Glasgow would like to see a lasting legacy of increased tourism to the City and is aiming for a 4% increase in tourism over the next three years - an additional £30 million in revenues6.
According to Aberdeen Invest, much of the North Sea is still to be developed so the city will remain at According to HM Treasury, public the heart of the energy industry for the spending will be down by £12 billion next 20 to 30 years. This would indicate that at least 320 this year. The Financial Times more rooms will be needed, although Austerity Audit claims that 60% of With business expenditure on hotels the city has seen a record number of spending cuts are still to take effect significantly higher than leisure travel, new hotel rooms added to its stock and that Northern towns and cities will Aberdeen will continue to need more recently and the hoped for legacy may be hit up to five times more heavily business accommodation. be ambitious. than the South. Market Transactions Also in Scotland, the hotel market in This has a strong message for hotels Glasgow has a positive outlook, with outside the South and away from nine months of continuous growth4 While there are still some distressed major regional hub cities. and record occupancy at over 90% - sales (three out of seven sales this Regional economy
quarter have been out of administration or on behalf of receivers and among the three hotels for sale this quarter, one is on behalf of administrators)7, a recent report from Saville‘s says that it expects to see an increasing number of voluntary transactions this year as portfolioholders dispose of non-core stock, confidence continues to improve and more domestic and overseas banks offer debt finance for hotels.
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In addition, private equity, High Net Worth Individuals, and Sovereign Wealth Investment Funds have entered the market in greater numbers. UK hotel transactions in 2013 were over £1 billion higher than in 2012 and the highest since 2007. This trend shows no sign of slowing in 2014 as demonstrated by Starwood Capital‘s acquisition of Four Pillars Hotels and the De Vere Venues business, and the sale of the 173 bedroom London EDITION to Abu Dhabi Investment Authority. Transaction activity outside London this quarter has also been brisk with the 207 bedroom Radisson Blu Durham and a number of Premier Inn and Travelodge hotels being sold. With strong fundamentals fuelling investor appetite and an increasing number of investors entering the market, we might see pressure on stock causing prices to rise in prime locations making hoteliers look beyond prime assets and prime locations, and at different formats, for future investments.
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The contribution Britain’s tourism industry makes to the UK economy is predicted to more than double in Demand for a Digital Experience the next 12 years. Such growth would place the sector’s worth at over £257 billion, making it an employer to some 3.7 million people and seeing it outperform even the retail industry by 2025. What demands are customers likely to make on the sector during this time, and what strategies must operators put in place to not only meet, but exceed these demands in order to achieve this growth? We discuss 10 principle trends and how they are influencing customers’ thought processes and choices.
Technology will continue to transform the traveller and guest experience, and exert significant impact on loyalty, advocacy, and revenues. With over 82 million mobile subscriptions in the UK and over 49% of adults using their phones for internet access, customers expect good digital experiences. In recent research, 70% of travellers indicated that a hotel‘s technology (website, mobile app, TV, and other digital tools) influenced their decision to book. Whilst such facilities have long been a prerequisite for business travellers, they are becoming increasingly important to nonbusiness customers looking for the convenience, accessibility and connectivity they provide.
Attracting Overseas Guests The outbound tourism industry of emerging markets has grown exponentially in recent years driven by an increase in disposable income in BRIC countries giving rise to an affluent middle-class. These new travellers bring with them differing expectations to those of their developed market counterparts. Recent research indicated that 64% of Chinese and 62% of Brazilian travellers expected tailored hotel experiences designed to meet their specific, personal needs, compared to just 42% of UK travellers. Experience personalisation and service consistency, coupled with adherence to local tastes and cultures are most valued by these new travellers.
Harnessing People Power Customer experience is the delivery of a companyâ€˜s brand promise, and engaged employees are paramount in this process. Whilst the quality of an experience and the value placed upon it are defined entirely by the customer; committed and passionate employees will continue to have the tacit knowledge and skill set needed to create personalised and differentiated interactions with customers that leave them feeling special and valued. High attrition can be costly and make it difficult to maintain consistency in customer experience delivery within the tourism industry. Therefore, companies need to develop ways of protecting their investments by retaining this talent.
Delivering Omnichannel Experiences
Exploiting Social Media
Social networking has transformed the way customers embark on a purchase. Social media platforms have opened up a global forum for customers to share experiences, make recommendations, and express likes and dislikes. Companies willing to embrace this shift and actively Starting with a social media review, integrate social insights into their leading to web enquiry, a subsequent customer service functions will be voice call, and perhaps a follow up better able to protect their brand email, they will expect a level of image through more effective connectivity and interaction history resolution of current problems and such that they do not need to start prevention of future issues. their conversation from the beginning. Furthermore, closer integration will allow employees to engage in more Furthermore they will demand a meaningful conversations with consistent brand experience across customers and begin to humanise the all mediums. digital experience. With the wealth of communication mediums at their disposal, hotel guests will increasingly look to switch seamlessly between channels at various touch points throughout their customer journey.
Achieving Customer Centricity
Adapting to Gen Y
Customer experience will remain the primary differentiator for companies within the tourism industry looking to cultivate loyalty and enjoy continued commercial advantage. These companies are those who place the customer at the heart of what they do, defining purpose, relevance, and value from the customer‘s perspective and adopting an objective, outside-in view of their operation. Customer Journey Mapping will remain one of the most effective diagnostic tools for companies intent on improving service, building innovation, and injecting empathy and ―wow‖ into their customer lifecycle.
Baby Boomers are currently statistically the most affluent age group in the UK.
Challenging the Stereotypical Customer Profile
Enriching the Entire Experience
Move Towards Anticipatory Service
Today‘s customers actively seek out opportunities to enrich their entire travel experience. For example, Millennials are interested in local culture and will delight in the chance to submerge themselves in foreign customs. Companies who look at the travel experience in its entirety rather than solely focusing on their part in the process, can help optimise their customer‘s overall experience. This commitment to going beyond what is required, is what starts to build emotional connections with the customer, these emotional ties are far more effective in securing customer loyalty and trust than any incentivebased initiative.
Customer service will continue to shift from reactive to proactive, and companies unprepared for this will be left behind.
Customer profiles are evolving and becoming multidimensional. Business travellers, holiday makers, student backpackers, independent travellers, and retirees can no longer be categorised as strictly, as it is now commonplace to blend roles on different occasions. For example, a businessman may extend a business trip for a few days pleasure. This shift implies that individuals may have different requirements and expectations to those historically associated with that profile and as such companies need to become more adept at simultaneously anticipating and meeting these.
The Office for National Statistics states that some 43% of individuals within this age bracket have total wealth of >£500K, compared to only 26% within the 16-24 age category. This age bracket makes up 23.5% of the UK population, individuals‘ disposable income, time, and desire to travel mean that they represent a significant focus for the tourism industry.
These are just some of the key trends shaping the future of customer experience in the tourism sector, they will undoubtedly develop over time. What is certain however is that those companies who have invested in securing customer loyalty and trust will be those best positioned to capitalise on evolving customer requirements and expectations.
However, the next 10 years will see a new demographic emerge, known as Generation Y or the Millennials. This group will emerge as the new core customer as their earnings, spending, and travel inclinations peak. This age bracket is the most unpredictable and emotional, least loyal and patient, and most driven by technology and automation. Companies need to start preparing for how they can capture the hearts and minds of this group.
Forward thinking organisations will start to truly exploit research and analytics data in order to gain a deeper understanding of their customers and to develop more individualised and personalised customer experiences. These companies will start to look at ways to proactively recover from service issues before a customer has even had the opportunity to complain, simply by detecting changes in loyalty patterns.
01793 493468 www.i360experience.com
Anyone looking to buy or sell a hotel or other commercial property asset must be aware of the new changes in legislation concerning capital allowances.
types, and additional claims can be made for various assets that provide ambience.
home or abroad, and offshore or foreign companies and individuals investing in the UK.
So what are capital allowances?
What has changed?
This has the potential to significantly benefit you if you understand the implications.
Capital allowances are a form of statutory tax relief available for capital expenditure incurred on fixtures within most buildings.
From April 2014, in order to claim capital allowances on a property acquisition, purchasers will need to ask the seller (if the seller is a tax paying entity) to ‗pool‘ any qualifying expenditure prior to sale.
It also has the potential to cost hundreds of thousands of pounds if you are not aware and don‘t seek professional advise during the due diligence stage of a property transaction. What‘s more, the impact of these changes on the hotel industry will be felt to a greater extent than many other industries, as the value of fixed assets contained with hotel buildings are higher than most other industry
They enable you, as a UK tax payer, to write off relevant expenditure against taxable profits and income, resulting in a substantial increase in post-tax profits and income. Can anyone claim them?
In addition, both parties will have to agree the value that is to be transferred upon sale, via a Section 198 Election, within a two year period.
Failure to meet these new Capital allowances are available to all requirements may result in any investors and occupiers liable for UK qualifying expenditure being treated tax including UK based companies as ‗Nil‘. and individuals investing in assets at
Not only this, but any future undertaken appropriate action in the purchasers of the building will also be lead up to exchange of contracts, may restricted to this figure. result in a reduced sale/purchase price to accommodate the loss of any This is a radical departure from potential qualifying expenditure (see current long standing practice, such the worked example on the next that up until April 2014 there was no page). time limit for claiming capital Who will benefit and who will lose allowances on the acquisition of a out? second-hand property. The new owner of a property simply had to research the tax history back to 24 July 1996, to satisfy HMRC that there had been no prior claim made by a previous owner. How will this affect me when selling a property? The changes are of such magnitude that failure to have comprehensively addressed capital allowances and
Other beneficiaries are sellers who are not chargeable to tax (such as pension funds) where there have been no prior owners to April 2014. These properties will typically be more attractive to purchasers compared to a similar property being sold by a seller who is within the charge of tax who has not ‗pooled‘ the qualifying expenditure.
The winners will undoubtedly be those who seek advice and operate within The losers, as the worked example on the new rules. the next page clearly demonstrates, are purchasers of properties from Assuming they are appropriately April 2014 onwards where the informed, those most likely to benefit previous owner, as a tax paying are sellers of properties ‗rich‘ in entity, has failed to ‗pool‘ all qualifying fixtures, who are chargeable to UK tax expenditure, as any available and who have not pooled the allowances may be treated as ‗Nil‘. allowances, because clearly there is a deal to be done here with the Thankfully, there are some purchaser. exemptions in place.
Are there any exemptions?
What about chattels?
There are some exemptions in place In our experience, there is often a as the new rules come into force—but separate price attached to only if very specific criteria are met. ―chattels‖ (loose assets) in hotel deals and this can be a significant The following transactions and issues contributing factor to the total sales will not be affected by the revised price. legislation: These chattels fall outside a Section 198 election and are also treated The grant of a leasehold differently for tax purposes. interest for a capital sum – where the right to the allowances is not passed to the The hotel industry is renowned for providing poor supporting cost lessee. documentation and records, so early The entitlement of purchasers who acquired prior to April 2012 engagement to audit the available information is essential. and who continue to own the property When advising on a sale which Capital allowances relating to includes chattels, we generally split capital contributions Purchase of an SPV (although the purchase price between chattels, the SPV itself may come under fixed plant and machinery, the land and the building structure in the most the revised legislation) The purchase of a new unused optimum fashion. property from a developer So although capital allowances may trader not, until recently, have been high on Pension fund purchasing a the pecking order of priorities when property from a pension fund where no prior qualifying owner acquiring a property, this will now be a crucial part of the sales process. had owned it The entitlement of purchasers Ignorance will result in an underclaim who acquire a property from a in tax relief, not just for the first pension fund where no prior property transaction but for the value qualifying owner had owned it of the property for the rest of its life. The entitlement of a purchaser to claim integral features on a The gradual reduction and now property, where the seller or a complete removal of tax relief on hotel prior owner was not entitled to building structures make it more claim integral feature important than ever to consider other reliefs that may be available on Should details about capital hotels. allowances claims be included in vendor packs? This industry has much to lose, but also much to gain, from these Yes. We would always recommend changes. It is entirely dependent on that our clients include capital getting the right advice and acting allowances within a vendor pack/sales promptly. particulars. This provides any future purchaser with an informed view on what will typically be available, such that it could also lead to increase bids in some cases; particularly if you are selling to a high net worth individual.
020 7182 2000 www.cbre.co.uk
Ioannis S. Pantelidis is a principal lecturer in Hospitality and Culinary Arts at the University of Brighton. He is editor of Routledge Handbook of Hospitality Management and coauthor of the best-selling book, Food and Beverage Management. His PhD topic focuses on the personality of the hospitality consumer and technology acceptance.
and all round useful apps have to pay to get visibility you can imagine how difficult it would be to make a hotel Change always brings opportunity app stand out. and mobile developers have realised that if they canâ€˜t make money from Still if you are a major chain with selling apps they may make some thousands of loyal customers, a hotel money from app makers. Mobile app app may make sense. But for the rest DIY is here! of us developing a native mobile app has really stopped making sense for Try sites such as appsbar and some time now. Appypie or Eachscape which give you the possibility to build a customisable Technology, Technology application. I would suggest that you consider your restaurant operation (if So what has changed? Well for one, you have one) as the focus of your technology has changed. app development.
The vast majority of hoteliers that I come across tend to be in the â€•late majorityâ€– of the innovation adoption curve (see: Everett Rogers work on diffusion of Innovation). With that in mind I expect that there are still hoteliers out there that are thinking of commissioning a mobile app developer. And most likely that developer will design a hotel app that is destined to never deliver ROI.
From HTML5 and 4G LTE to exponentially faster mobile processors, mobile websites have become a highly competitive option. Browser technology is also evolving and websites can today send push notifications in the same way news apps do. It is not hard to imagine that by 2020 Hotel apps will be obsolete. So what about the present? What can a hotelier of a smaller chain or an independent hotelier do?
It is increasingly harder for hoteliers to come up with compelling reasons to Well first decide if developing a convince their customer base to mobile app is really adding value to download a hotel app. your customer base. If you are truly convinced that you need a mobile app The app store is heaving with apps then you have some options to and when developers of remarkable consider.
Use that DIY app as a pilot stage that allows you to understand if your customers are likely to adopt mobile apps and gather some feedback from early adopters of your app to either keep improving it or decide that apps are not really worth your trouble.
Consider a hybrid app. For the same reasons that mobile web is becoming increasingly powerful a hybrid app allows you to leverage that technology whilst keeping the costs of the app down. If you really intend to invest money then hybrid is one of the most balanced cost-value approaches.
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Ensure your hotel shows in the search results of some of the most downloaded travel mobile apps. Depending on your hotel brand you may want to associate your property with specific apps but a quick search on the web would reveal some of the top travel apps for your country. From hotel price comparisons to last minute hotel deals there are numerous apps that have an existing user base. Download a few and attempt to book a hotel near your location. Use your findings to make informed decisions.
Team up with a third service provider that is likely to add a powerful mobile app in the package. From virtual concierge service companies to restaurant reservation services, there are alliances you can make that provide you with mobile apps as an add on to their core service. No matter your choices, you must remember that what ultimately secures your customer trust is imaginative design that enables them to have a more seamless experience in your hotel.
Step-by-step guidance for everyday and complex tasks
Templated policies and contract clauses
Eg, legally dismiss an employee, Discipline a pregnant employee
Eg, accident procedures, lone worker policies, employment contracts
ďƒź Respond to business issues as they arise compliantly Eg, investigate an employee grievance + the letters to send
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With spring now well and truly upon us and with blossom on the trees and the unexpectedly warm weather, it is hard to believe that a mere 8 weeks ago the country was in the grip of some of the worst storms the country has seen in years. Flooding destroyed homes, flights were grounded and the severe weather wreaked havoc on the roads, on agriculture and on day to day life for many people. Some areas were, of course, hit worse than others but national media coverage of the difficulties was blasted to the public on a daily basis. The sometimes sensationalist reporting styles of many of the national tabloids made out that entire counties were cut off and a ‗no go‘, rather than just highlighting the difficulties in specific locations. Somerset and the South West, where we have a number of hotels, was unfortunately badly hit which had an impact not only on the public, but of course on small, local businesses. Our problem was not that we were battling the weather, but we were hit by the
negative media coverage and the sometime ‗scaremongering‘ of the national press. Whilst some parts of the counties were certainly in difficulties, access to our hotels was never compromised and guests could happily have reached their destination, however many cancelled due to the nature of the news coverage. The media simply don‘t realise the effect that such reporting can have on small businesses and incidents like these can herald dark times for the tourist industry but there is always something that organisations can do in the face of adversity. So what can we do? We can embrace the negatives and turn them into positives. We can think outside the box to immediate actions that will counter the inevitable trough periods in trading. TOP TIPS: ONE: Forge partnerships with appropriate organisations who share the common problems. To collaborate and share best practise gives us a greater voice.
TWO: Seek out media contacts that are carrying the sometimes misleading stories and present a positive spin. Building relationships with these reporters can help to counter balance negative reporting when they are properly informed that not all is ‗doom and gloom‘. THREE: Lobby government agencies such as local tourism authorities, MPs and councillors and let them know that businesses in their area are still there, trading and unaffected. FOUR: Though we are loath to do this on a regular basis, certain times call for certain measures. Activating ‗distress rates‘ with third party websites will help to get the word out that your business is still trading and will induce uplift in business for your trough periods. FIVE: Never forget the great British stiff upper lip. In times of crisis the people of this country pull together and often if they can help each other they will. To quote a popular phrase, in times of difficulty try to ―keep calm and carry on‖.
A loss of memory is often a coping mechanism for trauma or damage but, beware, it has dangerous side effects too. As we nervously and unsteadily emerge from the deepest well of recession, it‘s easy to see who has learnt from the pain and who may yet perish. Some time ago, in mid-recession, I wrote ―beware pirates getting into positions of power on the high seas‖ and I also predicted ―pirates would perish‖. Both happened and none of us will forget the pirates even if some have yet to perish. A storm uproots everything, but what matters is what we learnt. What‘s unthinkable is to hope for a return to ―the good old days‖. What‘s worth looking at is the traits that sustained the good guys amidst the storm. Integrity It‘s one of those words that gets thrown around but it doesn‘t often stick. The good people who run good businesses have survived. It‘s as simple as that. Integrity often means ‗doing the right thing‘ and, inevitably, doing the right thing is significantly harder than doing the ‗easy‘ thing. Clearly, Pirates are integrity free.
didn‘t need the money, would you work with them?‖ If the answer is ―no‖ then you are in for trouble. The purpose of business is to create customers, but that also means ―reasonable customers‖. Quite simply, you can‘t afford to have your time consumed pleasing the unpleasable and the impact they will have on your brand. It takes courage to say ―no‖ but it might well be what defines you. New Brands Of course there is the well-worn cliché of recession creating opportunity. There‘s another way of looking at that: it creates new brands. Those new brands can change the playing field considerably and they don‘t always need a recession to disrupt the marketplace successfully. When money is tight, people look more to brands and ask ―Can I trust this?‖ Therefore, to survive, you need to spend more time and money on your brand, not less. If you don‘t, the new entrants will eventually take you on. The Key Questions I‘ll offer two. You need to interrogate your version of both of these questions. They should be customer facing and not inwardly self-congratulatory.
The most common and unimaginative response to tumbling income is ‗value‘. It‘s as if a quick banner proclaiming ‗value‘ is the saviour of the universe. Sadly, it‘s not. Drive down any High Street and how many times do you see ‗value‘ as the proposition. Being ‗good value‘ is fundamental not something unique. Value is also entirely subjective and to guess at what‘s good value for me is the same as guessing my income. In today‘s new world, you need to show me value rather than tell me it‘s value. Training A General would hardly ask his troops to conquer a neighbouring hill held by an opposing army without setting out the vision. From the vision (conquering the hill) they‘d set out a plan of attack (the mission). To do that, he would need the buy in and commitment of his troops (motivation). Before doing that, he would have to train them and equip them to do the job (training).
Good businesses invest in training every week. If you look at who survived the storm, inevitably they Q2: Does your marketing really create invested in their people. After all, the desire to buy? companies do not grow, people do. Q1: Why should I buy from you?
Choosing Your Customers There‘s a very simple, perhaps simplistic question, it‘s this; ―If you
Value Recession creates new clichés. Every time you hear it, it becomes less plausible.
Conor Kenny and Associates are experts in sales, marketing, sales training and people development. They help you to get the most out of your people and your business. Companies don‘t innovate; people do. Discover more: www.conorkenny.com
Reimagine Business changes. Good businesses constantly seek criticism, ways to improve and meaningful feedback too. Every business needs to dismantle and rebuild. If your business was a mobile phone, think of how many recent reincarnations that‘s had. Better still, think of what it wiped out? What’s The Difference? This is a true story. A very short story with hidden depth and a huge powerful lesson. Like you, when the first giant wave hit, I asked myself several questions about our business, our direction, our focus and our future. Like you, we were suddenly sideswiped but knew that doing the right thing would see us safely to the other side. Still, we would take experienced advice from wherever we could. My Dad spent a lifetime working with managers. He founded the Irish Management Institute and worked with many of Ireland‘s most distinguished and successful businesses. On top of that, his books were best sellers. He was a good port of call. I wanted his advice about managing our business in a recession. His answer is the best piece of wisdom I
can share with you. I said; ―What is the difference between managing in a boom and managing in a deep recession?‖ He raised an eyebrow, paused for a second and said: ―None.‖
What a waste! You‘ve had a fantastic time. You‘ve been well cared for, attended to with fantastic hospitality.
about booking again, telling their friends or colleagues, or telling the world on TripAdvisor about their experience?
When I‘m working within any business Your stay was wonderful, the reviewing the customer experience I atmosphere was relaxed and you and always ask them to imagine the your family have had a great time. conversation or the feelings and thoughts they'd like their customers to But then it all turns sour. It‘s time to have when they're on their way home go home and suddenly no one is from staying with you. interested. Whether that‘s the whole family in the You‘re ready to check out or pay your car on their way home from a summer bill, but there‘s a queue to part with break, a couple sat on an aeroplane your money! You take a visit to the on their way home from a relaxing loos and wish you hadn‘t. You need a long weekend, a walk back to the hand with your luggage but can‘t find office after an important business anyone. You need some directions meeting or a newlywed couple and but no one knows the way. their families at the end of their special day. Has this ever happened to you? Whatever your guests come to you for More importantly has it ever - business or pleasure - ask yourself happened to any of your guests? what would you want them to be saying, doing or feeling after doing One of the most important business with you? determining factors in prompting a positive lasting memory and potential Do they feel appreciated and that repeat visit is what happens in the you‘re sorry to see them go? Or are very last few minutes of the guests‘ experience. What‘s the very last thing your guests see, hear, smell, taste or feel as they leave. What will be the lasting memory that stays with them when they're thinking
you unintentionally making signs that you‘ve other more important things to be getting on with? The equivalent of impatiently looking at your watch or getting the Hoover out! It may not be obvious, but letting them know you‘re running late, that you‘re relieved it‘s the end of your shift, or you‘ve a queue of other guests to attend to. Any signs of rushing them out of the door or off the premises will leave them feeling they‘re not important. How about when they‘re the ones in a hurry or ready to leave, and we keep them waiting. They‘ve had breakfast or finished their meal, but their bill isn‘t ready; they‘d asked for directions and we‘ve forgotten to print them out, they ask for a receipt but the printer‘s out of paper. Small things, but not the best impression to leave with a guest when they have to wait to part with their money; it might be the one thing that puts a damper on an otherwise great experience.
Caroline Cooper is an author, trainer, and consultant on customer services and loyalty helping businesses to get more sales through their existing customers. She is founder of Naturally Loyal and author of The Hotel Success Handbook. Discover more: www.naturallyloyal.com
What‘s going on behind the scenes that‘s not quite what you‘d like your guests to experience? Are your toilets as pristine at the end of a busy function as they are at the beginning? (Just reflect on how many of your customers make the ladies or gents their last port of call before setting out on their journey home.)
Everything your guest experiences during their visit up to this point might be seamless and perfect. But it‘s those last few moments which influence the end result - how they feel, what they say, and what they do as a result of their visit.
So don‘t let it all fall down What‘s the last conversation they hear at the last hurdle. as they leave? Is it a genuine smile, offer to help with their luggage and sincere heart-felt ―thank you‖ in person? Or do they get to hear the back stage gossiping and gripes about the weather, a long shift, the management, or excuses for delays or disappointments. What‘s the last thing they see on their way to the car park? Particularly if there‘s a sneaky short cut via a rear exit. Is it the chaos of a storage area used as a dumping ground, the cluttered cleaning cupboard, over flowing bins, the remnants of last night‘s function, or even your team having a crafty cigarette by the back door? What do they see or feel in the car park? How secure do they feel if it‘s dark? Is the level of service consistent with everything else, or is the last person they see a grumpy gardener or off duty waiter fooling around and letting the side down?
Are you spending too much time, effort and resource in dealing with problem staff? If so, I have some strategies to share for dealing with staff problems. This will also be the subject of my free seminar at Hotelympia (Tuesday 29 April, Careers Hospitality Stage, 1.30pm). Do you have staff with poor attitude, who cause conflict with team members and guests, don‘t take responsibility for their actions, never meet your service standards and don‘t follow instructions?
Observe candidates on a taster day, interview in groups and involve your best people to test out the candidates. Can you do more to get the right people into your organisation?
Examine your Processes Sometimes organisational processes act as a barrier to delivering a great guest experience and frustrate staff as well as guests.
Leadership Development People join organisations and quit leaders.
Staff may not want to mention something that has always been a rule, holds them back and could be done better. Ask staff if any of your processes are getting in the way of them doing a great job. Then change what‘s not working quickly.
People will choose their behaviours and language based on how they are treated by their managers.
Staff serve as you lead so ensure leaders are creating a supporting, nurturing and rewarding environment that creates the desire and Hospitality is a people business and a opportunity to do a great job. team sport. With guest expectations at an all-time high, you cannot afford Invest in developing your leaders to to have staff who are not performing have the skills, knowledge and consistently well. emotional intelligence to maximise the potential of every member of their This has a negative impact on morale, team. employee turnover (often losing your best people), your employer brand, Ensure they spend at least 50% of productivity and guest satisfaction. their time setting clear expectations Resulting in loss of revenue, and coaching staff on how to do their profitability and a bad reputation. job better. Are your leaders great role models? So, what can you do to prevent staff problems and create a high performing workforce? Right Recruitment Techniques Ensure your recruitment processes identify attitude and personality and get the right fit for your culture and guest profile.
So, now let us turn our attention to strategies for fixing staff problems. Here‘s my top five list: 1. Identify the Cause Why is someone not performing to the necessary standard? Is it poor technical skills or an attitude problem? Technical skills can be trained to solve the problem quickly. Attitude changes require strong leadership skill to influence the necessary change.
Anne Blackburn is the co-founder of award-winning Sidona Group. As the company‘s customer experience director, she specialises in customer experience research, strategy, learning design and evaluation. Discover more: www.sidonagroup.com
2. Gather Evidence You need specific examples of poor attitude, unacceptable behaviours towards guests and any inappropriate use of language to support your theory. Examining guest feedback and observing the staff in action will give you specific examples to discuss with the under-performing employee. 3. That “Difficult Conversation” Leaders need to be brave and have the ―difficult‖ conversation with the employee and point out what is not working and what needs to change. We find too many leaders unskilled or never having these types of conversations so the underperforming colleague continues to deliver poor service, is unaware of their impact and carried along by your best staff. 4. Gain Commitment to Change The outcome of the conversation needs to be a willingness and commitment to change the attitude and behaviours that are not acceptable. 5. Measure Success Leaders need to provide coaching to influence and sustain the changes. Recognise in the moment, the positive changes in behaviours to ensure they are repeated.
Don‘t allow problem staff to destroy your guest experience. People can and do change their performance given the right leadership, environment and training.
Published on Apr 22, 2014
There is a wonderful theme that threads throughout this issue of Hotel Industry Magazine: Growth. Our quarterly review of Q1 2014 (page 8)...