Ufi Ibrahim, BHA Chief Exec Steady as She Goes! What Does the Next Financial Quarter Have In Store?
The Impact of the Scottish Referendum on Hospitality The Secret Behind Premier Inn’s Success Legal Pitfalls and Zero-Hours Contracts
What Can Hoteliers Learn From History?
How to Recruit Sales Staff ... Not Marketers 7 Ways to Maximise the Impact of Your Training The Impact of Guest Emotions on Revenue
Hotel Industry Magazine Q3 2014 – ISSN 2051-0632 Editorial Editor: Lee Jamieson Email: editor@hotel-industry.co.uk Editorial Contributors: Anne Blackburn, Alistair Campbell, Caroline Cooper, Chantel Gohil-Gray, Michelle Grant, Ufi Ibrahim, Lee Jamieson, Vicki Jamieson, Conor Kenny, Stephen Moore, 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: contact@jamiesonmedia.co.uk 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.
Nationalism rarely makes long-term business sense. Key industry figures can only really lead when they collaborate to achieve common aims. And in 2014, Scotland is facing this problem head on. The sense of national pride in Scotland is strong at the moment ... And rightly so! The Scottish tourism calendar is packed with landmark events: the Commonwealth Games, the Ryder Cup, the MTV EMA Awards to name a few. Even Glasgow has completed its regeneration as a destination and has finally put its “grimy city” reputation to bed. But to what extent will this sense of national pride transfer into the referendum result for an Independent Scotland in September?
town in 2012. To continue driving demand, all sectors of the hospitality industry had to work together to achieve positive change. If you are not convinced about the results of collaborative cross-industry working, then jump straight to page 5 and read Ufi Ibrahim’s Leading View, where she shows how collaborative solutions are creating jobs, a new Tourism Council, and visa reform in the UK ... Will Scotland learn this difficult lesson too late?
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.
Let’s not forget that shortly after the vote, Scotland’s tourism calendar will suddenly be void of world-class major sporting events. What then? The need to work collaboratively, that’s what!
I hope that the current wave of welldeserved national pride doesn’t cloud Scotland’s business sense, because it is in the period AFTER the vote that need to work together will be strongest felt ... So please vote with your head, not your brave-heart!
No material in this publication may be reproduced in any form without the prior written permission of the publisher. © Copyright 2014, Jamieson Media
London experienced something similar when the Olympic Games left
Lee Jamieson Editor, Hotel Industry Magazine
What a difference a year makes!
talent, capability and incentive to solutions to the issues and challenges create a strong and vibrant future. which stand in the way of economic The question is how do we achieve it? growth and job creation.
This time last year, the economic outlook was very different. Despite the overwhelming positivity of the post Hospitality and tourism has always Olympic legacy, the UK was still in the had one eye on the future and one on grips of recession. the past and we are not afraid to communicate our views and beliefs But even in the midst of doom and and lobby the groups and individuals gloom, the hospitality and tourism who need to hear us. industry stood apart from other sectors through its vision, foresight As an industry we learn from and ability to work collectively. experience; we champion growth and we embrace change and innovation. As the UK economy begins to experience the green shoots of Most importantly we know and recovery, now is a crucial time for our understand that the future of our industry to step up and make good on industry depends on attracting, the preparations for growth that were investing in and developing the future made in the tough times. generation through job creation. At the British Hospitality Association, we have long held the view that the best way to predict the future is to shape it. As an industry we certainly have the
We know that successful relationships are imperative and as politicians and mandarins gear up for the 2015 general election, now is the time for our leaders across the hospitality and tourism sphere to work collectively towards a shared vision, utilising joined-up thinking to future proof our industry. Tourism Council
Collaborative Solutions
The newly-established Tourism Council, announced by Tourism Minister Helen Grant at the BHA’s 2014 Hospitality & Tourism Summit is the result of three years of lobbying work by the BHA.
Our experience with the Olympic Games has taught us that working collaboratively to find solutions is a must. Divide and conquer and find
The Council has been set up as a partnership between Government and industry that will focus on improving skills, increasing the quality and
Tourism Minister, Helen Grant, launches the Tourism Council
It is no longer enough to expect that young people will naturally gravitate towards our industry. We need to invest time and energy into finding appealing and relevant ways to attract new talent, showing them that careers in this sector can be rewarding and meaningful. quantity of jobs available and boosting enterprise in the industry. By establishing the Tourism Council, the Government is affording the hospitality and tourism industry an equivalent voice to other sectors, helping to drive forward the economy.
recognised as world class, and the BHA’s key goal for the coming year is to deliver the change that matters most to the brands, owners and operators who have a vision for the strongest possible industry we can build.
Our key objectives focus on job It is this kind of joined up thinking and creation, on global competitiveness, action which will help to positively setting and maintaining high impact across our industry. standards and innovation. World Class Vision Our vision at the BHA is for the UK hospitality and tourism industry to be
Underpinning all our work is the need and desire to inspire the next generation and attract talent towards hospitality and tourism careers.
We have to find ways to demonstrate career paths which develop these stars of the future. The BHA’s Big Hospitality Conversation with partners Springboard, DWP, the National Apprenticeship Service and a cohort of industry leaders including Whitbread plc, Moorfield Group, Baxter Storey and Ellerman Hotels is key. It is continuing to establish hospitality and tourism on UK PLC’s agenda for growth, and the creation of 34,000 work placements, apprenticeships
and jobs across 18 events is a good start. If every one of the UK’s 180,000 hospitality businesses created just one job for a 16-24 year old, youth unemployment would be cut by a quarter. 1. Cut Tourism VAT: Explain the issues surrounding tourism VAT in a way which real people understand so they can support our Cut Tourism VAT Campaign and put pressure on Government 2. Work Placements: Encourage hospitality and tourism businesses to create even more apprenticeships, work placements and jobs for young people 3. Tourism Council: Be vocal on the Tourism Council, setting out the facts to Government on the key issues, and ensure that we see real progress and tangible results 4. Food Safety Regulation: Work closely with the organisations and industry bodies who regulate food safety to ensure that the rules being made support businesses as well as customers 5. Ensure Future Success: Examine the regional, national and global trends which will impact on the evolution of our industry to ensure that hospitality and tourism is on the front foot, capitalising on developments for our commercial success
Time for Action! Our political capital has never been higher, and we must support the rebalancing of growth beyond London, driving exports, investment and jobs deep into local economies.
So more needs to be done to widen the net and also to demonstrate that the industry can and does offer jobs of high quality and high value. Global Competitiveness Looking beyond the UK, the BHA continues to champion global competitiveness. Last year saw some success in helping to simplify tourist visa And so our message is simple: We applications for Chinese visitors by will continue to create valuable jobs allowing a single application to cover for the UK economy. both UK and Schengen requirements. In return, we don’t want hand outs, This year we have been lobbying but simply the recognition and relentlessly to cut VAT on hotel understanding that tourism is a jobs accommodation and tourist attractions and growth generator. to 5% in a bid to give Britain’s regions a helping hand. We want continued support to expand the Big Hospitality Conversation The Sun, Britain’s best selling daily which creates work placements, job newspaper is backing the cause with opportunities and apprenticeships for Give Us a Break, a campaign young people. highlighting how Chancellor George Osborne can give Britain’s hard Hospitality and tourism is a major pressed regions a bolster that will export industry and should be benefit everyone over the long term. nurtured as such. The campaign continues to attract thousands of industry supporters, encompassing industry bodies such as the BHA and BALPPA, to small B&Bs, family run attractions, zoos and major international brands. If each hospitality business joined in our march towards shaping the future we would be unbeatable.
Improving visa access for tourists and business people alike is absolutely critical to allow more people into the country. And that means we also need faster decision making on additional runway space. We must also continue to ask for a lower rate of tourism VAT to compete in Europe on a level playing field.
If each business rallied around our call for streamlined regulation, policies for growth and a competitive These are the issues which matter to environment, there would be no our industry. stopping us!
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Robust trading conditions spread across the UK hotels sector, with steady growth in the last quarter showing renewed confidence in the hospitality industry. In April, UK hotels saw a strong month as a result of the Easter weekend and warmer weather. Both the regions and the capital saw strong growth figures with an 8.2% increase in rooms yield in the regions and 6.1% in London, year on year. Regional average room rate rose to £57.70, a 7.4% increase on last year and London matched this with a 5.3% increase to £128.22. Occupancy in the regions also increased by 0.8% to 73.6%, while at 83.4%, London occupancy was 0.8% higher than in April 2013.
More Occupancy Data
London verses “Everywhere Else!” The steady growth between regional hotels and those in the capital changed in May, when the absence of major sporting events resulted in slow growth and a dip in occupancy for hotels in London. Rooms yield was down -2.4% on last year, whereas room rate figures remained stable. Occupancy in the capital, however, fell by 2.4% to 83.1% as a result of skewed figures in May 2013 when Wembley hosted the UEFA Champions League Final. Regional hotels, on the other hand, continued to show strong increases in room rate (increasing by 6.3% to £62.15) and rooms yield (up 7.5%) in May. Occupancy also increased by 1.2% to 76%. More Rate Data
June showed another strong month for the regions with rooms yield up by 6.8% and room rates up to £64.75, an increase of 5.8% on the same time last year. Occupancy also showed a boost by 1% from June 2013. London Fights Back! London also saw a return to a certain degree of stability after last year’s bumpy performance. Rooms yield was a 0.1% increase from June 2013, and the average room rate was up 1.6% to £151.48. Occupancy dropped by 1.5%. A recent report has shown that London has topped a list of the most popular global city destinations. In addition, the latest ONS results indicate that visits to the UK by overseas residents were up 11.7% in the first quarter of the year. This highlights the UK’s attractiveness as a destination for overseas visitors and, combined with a strong domestic market, the Q3/4 outlook is positive.
Dig deeper into BDO’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
More RevPAR Data
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Photo: VisitEngland/Visit South Devon
Choosing where to invest in hotels is a complex process of balancing expected demand against supply and understanding future local, regional, country and wider issues that may affect the success of the investment. Our quarterly analysis provides insights into some of these factors. What to Expect in Q3 Pipeline? Supply data from AM:PM (as at 7 July 2014) shows that 3,710 rooms are due to open in the UK in Q3 2014. Of these, the vast majority will be either budget or 4* - 51% budget, 36.5% 4* - with the remainder made up of aparthotels (4.5%), 5* hotels (4%) and 3* hotels (3.5%).
Rooms Opening in Q3 2014 By Major City
This quarter continues to show that budget and 4* hotels dominate the near-term pipeline. The proportion of budget hotels rises from 37% to 51%, while 4* hotels remain strong at 36.5%, though falling from last quarter’s 45%.
6
Five star hotel openings are also lower at 4% instead of 11%. The 4* pipeline should be helped by improving economic conditions and increasing corporate booking activity.
4
1. London 2. Liverpool 3. Edinburgh 4. Glasgow 5. Bath 6. Aberdeen Other
(Rounded % by Major City)
3
London will see the most new stock at 45% of the total, followed by Liverpool and Edinburgh. Other locations (locations excluding London, Liverpool, Edinburgh, Glasgow, Bath, Aberdeen, Belfast and Manchester) make up the next largest segment, providing 36% of capacity and showing that a wide spread of locations is experiencing a recovery in economic confidence. Compared with last quarter, London has fallen from 61% to 45% of expected new openings. Other accounts for twice as many rooms as were expected last quarter.
45% 5.5% 4% 3% 3% 2% 37.5%
2
5
1
Rooms Opening in Q3 2014 By Region
Of the regions, London and the South lead the way followed by Scotland, reflecting last quarter’s pattern. London (in this analysis London is also classified as a region) still takes the largest share by region, followed by the South and Scotland, although London’s share is only 45% this quarter compared with 61% last quarter. Openings in the South increase this quarter from 17% to 25%. A degree of rebalancing away from London would be expected as the cost of investing in London has risen and the performance outside London has improved over the last twelve months.
3
The active pipeline for hotels has barely changed over the past quarter, although Glasgow and Aberdeen have three more hotels each in the pipeline than last quarter. Changing Visitor Numbers Visitor numbers, both from within the UK and inbound, determine the level of demand and, to some extent, the average revenues per available room. Internal visitor levels tend to reflect GDP, as economic activity drives business travel in particular. According to the ONS, the economy has improved in all regions and countries in the UK with London and the South East performing best, followed by East Midlands and West Midlands. The lowest growth occurred in Northern Ireland. The highest growth
45% 25% 13% 9% 5% 2% 1%
(Rounded % by Region)
7 4
Comparing active pipeline (where opening dates have been confirmed) with total pipeline, where openings have not been confirmed, can indicate recent decisions taken by hoteliers. However, most decisions relating to hotel openings are taken with a much longer term view.
1. London 2. South 3. Scotland 4. North 5. Central 6. Wales 7. N Ireland
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5
1 2
Photo: VisitEngland/Jeremy Cangialosi
in Gross Disposable Household income was in the North East, followed by Wales. However growth contracted in Northern Ireland.
Staycations Here to Stay
recovery, but their appetite for short UK breaks may also increase.
Visitor numbers from within the UK have grown since the downturn and Recent data from Barclays forecasts VisitEngland believes that staycations an increase of 1.8% in inbound This would seem to indicate that even are here to stay, at least for the visitors to the UK. in some of the parts of the UK hardest medium term. hit by the downturn, there will be more Visitors from the US, the largest business and leisure travel activity. According to qualitative research from source of inbound visitors to the UK, VisitBritain, the change has been are also up 12% year-on-year. This is ONS data for July 2014 forecasts driven by a preference for multiple especially good news as Americans annual GDP growth will accelerate to short breaks over the year, risk were ranked top for length of stay and 3% in 2014, the highest rate since the aversion, last minute planning and the spend in 2013. start of the economic downturn search for value. Goldman Sachs even bumped this up Visitor numbers from the EU are also to 3.4%. The majority of at-home expected to be 7% higher than in the holidaymakers have had very positive previous 12 months. Expected levels These growth expectations bode well experiences on their staycations and of spend are also up, by 11% overall. for corporate bookings in the coming are there therefore likely to maintain months. Leisure spending should also the trend for short UK breaks. These trends indicate that hotels and receive a boost as employment is other tourist facilities will enjoy a forecast to continue to fall, dropping That said, people are likely to larger inbound market this year, as to 1.07m in 2014 and 0.96 million in reintroduce longer holidays abroad as well as significant demand from UK 2015. they feel the benefits of economic residents.
Budget Rules At 51% of the total Q3 openings, the majority of new rooms are budget rated.
Premier Inn dominates the budget hotel sector for the next quarter, opening 10 of the 17 new budget hotels plus one hub by Premier Inn.
for profitable alternative use of hotel sites. According Savills London residential land values have grown by 87% since their low of March 2009 and now, on average, exceed their 2007 peak.
The remaining budget hotels include three from Travelodge, one Z hotel, one Marston Inns and one Ibis budget hotel. Demand for residential development land remains strong, with an ever increasing number of purchasers Transaction Trends According to Savills World Research, competing for a limited number of city fringe budget hotels are likely to There continues to be an element of permissioned sites. be the biggest beneficiaries from the distress driving hotel sales in general increasing number of Chinese tourists but new trends may also be affecting Hotel owners with property in the right visiting the UK. hotel sales. location, and who can obtain permission for residential use, may Chinese visits have increased 19% in Of the two hotels which closed in the find that selling for residential each of the past three years. Most last quarter, one was in receivership development is an attractive visitors travel in tour groups, and are and has plans for change of use, alternative exit path. cost conscious when it comes to while the other has been sold to a accommodation. Although the developer. This may be a temporary reliance on group holidays is set to phenomenon as the “housing bubble� diminish longer term, these large These may reflect the impact of the in the south east may in the future be budget hotels are ideally placed for steep rise in land values in London threatened by corrective action and by the large tour market. and the South East, and the potential the strong pound, which could affect However budget hotels make up only 33% of Q3 openings, indicating that budget hotels have more rooms than the average hotel.
hub by Premier Inn. Photo: Whitbread plc
exports as well as reducing the volume of international property buyers. Overall, the next quarter (and looking further ahead) is likely to be positive for hotel owners and operators with increased demand from international visitors, sustained or increased demand from UK residents, a potential increase in visitor spend and alternative exit routes. There may be a few small clouds on the horizon, but the outlook is generally encouraging.
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On 18 September Scots will go to the polling booths in a referendum on the future of Scotland. It is a vote – an irreversible vote – that will have huge effects on the tourism sector. Tourism is a sector which, as well as being important to us all, plays an even greater part in the economy of Scotland: in 2009 the visitor economy accounted for 10.4% of Scotland’s GDP and 10% of our total employment. In England, the respective figures are 8.6% of GDP and 8.3% of total employment. Difficult Times The debate is set against the backdrop of a challenging environment for the hospitality sector
in Scotland. Official Scottish Government figures show that Scotland experienced an 8% decline in tourism in the year to March 2014.
They argue that greater focus on Scottish sectors like whisky and tourism through a Scottish embassy network would yield greater dividends.
This is the picture in the run-up to Scotland’s “big year” of events, featuring the Commonwealth Games in Glasgow, the Ryder Cup, the Homecoming and the MTV EMA Awards ceremony.
But for many hotel groups, this is an area of concern ... and rightly so!
Scottish Embassy Network One of the tourism-focused arguments often levied by the Yes Campaign and the Scottish National Party (SNP) is Scotland’s poor representation through the UK embassy network.
The UK’s embassy and consular network is well established and many tourist bodies currently have good contacts within it to promote their business or destination. The reputation of the UK network brings with it a lot of “soft power” as an established country that people know about and respect. Brand Power!
Rather, they plan to promote Scotland The UK has excellent visibility as an globally through Scottish embassies. international tourism destination and
MSP Block. Photo: Adam Elder/Scottish Parliament Corporate Body
has developed a reputation on the global stage.
and strong international visibility required.
Whilst it is true that Scotland benefits from being a unique brand in its own right, it is also worth remembering that the destination benefits from the global visibility of “Brand UK”, attracting tourists, investors and students from across the world.
The real question is how much business and how many visitors would be lost in the interim?
We genuinely have the best of both worlds: the Scottish industry doesn’t need to choose between “Brand Scotland” and “Brand Britain” ... it can use both!
We might like to think that Scotland, its attractions and “reasons to visit” are known all around the world, but an analysis of our tourism statistics reveals that it’s not that straightforward.
The UK uses its soft power to promote Scottish cultural events internationally. An independent Scotland would force us to start from scratch and it would undoubtedly take time to build the positive reputation
It is a risk. A real financial risk.
where Scotland is not. It is a good thing for all Scottish-based tourism businesses that we have VisitBritain promoting this island and that we can benefit from onward visits from elsewhere in the UK. Hopefully, those visitors will return and spread the word.
The London Factor
The (perhaps unpalatable for some) fact is that London – that major world city with its Buckingham Place, Changing of the Guard, art galleries and theatres – is globally recognised,
Some who support the Yes cause might say that VisitBritain promotes tourism in the Republic of Ireland in a similar way, but the fact is that the Irish tourism authorities pay for that. A similar arrangement would probably apply with an independent Scotland. This represents another additional cost, which would have to be borne by Scottish taxpayers and businesses. In the short term, there is a specific
advantage to Scotland when we consider the GREAT campaign, a drive to build the UK’s brand. It aims to deliver long-term increases in tourism, along with trade and investment.
area of the UK. We don’t know how this position will fair under an Independent Scotland.
A requirement for separate visas for an independent Scottish state and for the continuing UK would involve The campaign’s advertising uses additional cost and effort for visitors iconic Scottish images such as the and may discourage them from Glenfinnan Viaduct and the Edinburgh visiting both countries. Tattoo. This could reduce the average length The UK Government has committed a of stay and therefore expenditure by further £30 million to GREAT, and each visitor in either an independent aims to generate £15 spend for ever Scottish state or the continuing UK. £1 spent on the campaign. This possibility is reflected in Ireland where authorities north and south of Free Movement? the border believe two separate visa Another fact is that the current regimes restrict tourism across the arrangements provide the opportunity island as a whole. for travellers to visit more than one
However, any mutual recognition of visas between an independent Scottish state and the continuing UK would have to be negotiated and agreed. The facts are clear for those of us in the tourism business: if we are patriotic and business-savvy Scots, then we know Scottish tourism and UK tourism work better together than they will apart. That’s why we should, for the best interests of our industry, say “No Thanks!” in September.
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In 2004, Premier Inn, owned by Whitbread PLC, ranked third in the UK hotels market in terms of room revenues and only had a share of 3%. Nine years later, the company ended 2013 ranked first in the country with a share of 12%. The company’s strong product, superior service and value for money, along with its ability to finance its own growth, have all propelled the company to the top. The future evolution of the company, though, depends on the strong execution of its new brand, hub by Premier Inn, and international expansion in the face of growing competition in the UK. UK Leader
introduction of dynamic pricing in 2010, which allows the company to better manage prices in times of low and high demand.
It has engaged travellers through relevant content, such as customer reviews, TripAdvisor ratings and social media activity, to encourage direct bookings.
But the company’s emphasis on its product and service has helped it gain In 2013, Premier Inn had more than traction with travellers. 34,000 followers on Twitter and over 96,000 Facebook fans. This helps In 2000, it introduced the “Good Night drive traffic to its website, which Guarantee.” Guests can obtain a accounts for three quarters of its refund if their sleep is not satisfactory. bookings. The company also invests heavily in maintaining its product.
The company has been able to obtain its leading position through a variety Between 2013 and 2014, Whitbread of means. invested close to £80 million in repairs, maintenance, refurbishment By leveraging its own balance sheet, and systems. the company has been able to continuously build hotels, even during To further improve the customer the recession when financing was experience, the company has scarce. bolstered its online presence, stimulating traffic on its web and Another smart move was the mobile sites.
Fierce Competition Although Premier Inn is the leader in the UK hotels market, it faces competition from a great deal of budget competitors. Travelodge, its main competitor, has lagged in recent years, but it has almost finished revamping its entire portfolio with brand new room designs and it is expanding beyond traditional roadside hotels into more key city
Company % Shares of Room Revenues (UK) Company Whitbread Plc Hilton Worldwide InterContinental Hotels Group Plc Travelodge Hotels Ltd Accor Group Best Western International Inc Marriott International Inc Wyndham Worldwide Corp Jarvis Hotels Ltd Hilton Hotels Corp Others
2008 7.7 6.5 4.2 4.5 3.3 3.5 1.0 6.9 62.4
2009 8.3 7.4 6.2 4.6 4.7 3.0 3.4 1.1 61.4
2010 9.3 7.9 6.5 5.3 4.7 3.1 3.1 1.0 59.1
2011 10.6 8.6 6.7 5.7 5.6 3.5 3.3 1.1 54.9
2012 11.2 8.8 6.8 6.0 6.1 3.7 3.4 1.2 52.9
2013 11.9 8.8 6.9 6.3 6.2 3.8 3.5 1.1 51.4
Total
100.0
100.0
100.0
100.0
100.0
100.0
Source: Euromonitor International
Silicon Oasis pool at Premier Inn Dubai. Photo: Whitbread plc
centre and leisure locations, with five new hotels set to open in London between 2014 and 2015. In November 2013, Travelodge announced the construction of six new hotels (579 rooms) across the UK, with an investment of £41.5 million. The company also faces threats from high-design, low-price hotel brands, such as Citizen M, and pod hotels, such as Tune and easyHotels. New Product for Evolving Markets In response to the changing competitive environment, Whitbread announced a new brand, called hub by Premier Inn, in July 2013.
Cities like London and Edinburgh are key targets for hub by Premier Inn. The first hotel is set to open later in 2014 in St Martin’s Lane in London. Another eight hotels are in the pipeline, including two in Edinburgh.
Its heavy dependence on the UK, though, makes the company vulnerable to its mature economy.
Because it is relatively late to the international expansion game, Premier Inn may struggle to gain a foothold—it will be competing against Pipeline Development global chains that have more Whitbread has set ambitious goals for experience in those markets. Premier Inn, reporting over 10,000 rooms in the pipeline. The gains, though, certainly outweigh the risk, as economic power shifts By 2018, it plans to have 75,000 away from mature economies towards rooms in the UK, up from 55,000 developing economies. rooms in 2013, and reach close to 10,000 internationally. International With these two main initiatives, expansion is focused on select Premier Inn is on the right path to international markets, including India, retain its leadership position in the UK Dubai and Abu Dhabi. and grow beyond its borders. On the Right Path
The brand is eyeing the pod hotel business, which consists of small but contemporary rooms located in city centres, which means lower costs and highly competitive prices. The initiative represents a major opportunity to sustain future growth, as consumers remain price sensitive and are willing to exchange extra space for unique room designs.
Given the company’s success with Premier Inn, it is likely that hub by Premier Inn will be launched successfully and allow the company to penetrate markets not viable for the main brand. It will be a strong source of new growth for the company and help fend T: off new rivals, such as Tune. W:
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In April, the Office for National Statistics (ONS) published statistics on the number of contracts that do not guarantee a minimum number of hours (often described as zero-hours contracts). According to the statistics, women are more likely to have zero-hours contracts than men (55%), and these individuals are also more likely to be in full time education (18%), or be in young or older age groups (36% are between 16 and 24 and 7% are 65 or over, compared with 12% and 4% respectively for their counterparts not on zero-hours contracts). In addition, nearly two thirds of zerohours workers work part-time. The ONS estimated that between
January and February 2014 there were 1.4 million zero-hour contracts that provided work in the reference period of the fortnight beginning 20 January 2014. This estimate is higher than that of the Labour Force Survey of 583,000 people, who have primary employment on a zero-hours contract between October and December 2013. Although this difference can be attributed to reasons such as employees being able to have more than one contract, there has clearly been a recent increase in the number of people employed on zero-hours contracts and they are particularly popular in the hospitality industry which experiences such variations in
demand from season to season. It is therefore important to consider the advantages and disadvantages of zero-hours contracts and the risks for employers when using them. Defining Zero-Hours Contracts There is no legal definition of a zerohours contract and there are varying opinions as to what such contracts include from the employee and employer perspective. Indeed, one criticism is that workers can be unaware of their limitations and not realise there is no obligation to be offered minimum hours of work. The Department for Business Innovation & Skills (BIS) consultation
on zero-hours contracts in 2013 states that: "in general terms, a zerohours contract is an employment contract in which an employer does not guarantee the individual any work and the individual is not obliged to accept any work offered.�
relevant employment legislation since would not accrue such rights, but the contracts should be considered on would still be entitled to statutory an individual basis. holiday rights.
If, according to the contract, the individual is not obliged to accept Employers should consider prior to work, the employer could have an entering into the contract whether the argument that there is not the individual will be an employee or a required mutuality of obligation worker, as there can consequently be between the parties to indicate that a contract of employment during the the individual is an employee. period when the individual is not A lack of a guaranteed minimum working. Employers should therefore consider number of hours of work is a key how they wish to implement such element of such contracts. If the individual is legally an employee contracts in practice. rather than a worker, they would qualify for rights such as any statutory This is particularly important where The Risks for Employers redundancy payment or unfair the individual may in reality be given There are issues to overcome that the dismissal rights if they have accrued regular work as a court or tribunal employer should consider prior to the relevant continuity of employment. would consider the written contract as entering into the contract, in well as how the contract has been particular, the danger of falling foul of If the individual is only a worker they performed in practice. 1. Employee or worker?
The main advantage is that zero-hours contracts are flexible and allow employers to hire staff as and when the business requires.
Zero-hours contracts can be a foot in the job market door for individuals and a stepping stone to alternative employment.
As the employer can tailor its staff requirements to demand, the business can not only develop without risks of recruiting permanent staff, but employers can also hire staff to whom it may subsequently want to offer full time employment or guaranteed hours of work.
An attraction for young people in particular is that the contracts can help them focus on their future career path, provide them with skills in a work environment and allow students to continue with their studies. For individuals approaching retirement, they provide the
12 weeks (in which they were paid) this can be difficult to calculate: zeroCalculating holiday pay with zerohours workers work irregular hours hours contracts is notoriously difficult and as these calculations include as, unlike full-time workers who are overtime payments and bonuses paid entitled to the statutory minimum of 28 during the 12 weeks, there are days’ holiday per year, zero-hours consequently financial advantages for contract workers will normally only be the workers to take their holiday entitled to pro-rated holiday pay. following a busy 12 week period. 2. Holiday Pay
As rolled up holiday pay has been prohibited by the European Court of Justice (in the case of RobinsonSteele v P D Retail Services Ltd), employers will need to keep track of accrued holiday throughout the year to avoid administration difficulties.
flexibility to plan for retirement and ease out of the labour market whilst maintaining an income and job skills. However, the contracts often include exclusivity clauses preventing workers being employed elsewhere and supplementing their salary, even though they are not guaranteed a minimum number of hours work per week. Furthermore, the employer may be reluctant to provide the zero-hours worker with benefits that full-time employees enjoy. Less Favourable Treatment) Regulations 2000. That said, should a zero-hours worker bring such a discrimination claim, they would need to identify a suitable comparator employed on the same type of contract and case law demonstrates that this is difficult for zero-hours workers to establish.
3. Discrimination Claims As stated above, employers are likely to be reluctant to provide zero-hours workers with extensive benefits.
However, if the employer is considering whether or not these Holiday pay entitlement will differ employees should have different according to whether holiday has benefits, as zero-hours workers will been taken or paid for in lieu. probably be considered part-time employees, any less favourable However, as the normal rule is that a treatment may need to be justified by week’s holiday pay is the average pay the employer so they do not breach a worker received over the previous the Part-Time Workers (Prevention of
Employers should also consider the potential for indirect discrimination claims if many zero-hours workers share a protected characteristic. 4. Pensions Due to the recent obligation for employers to auto-enrol eligible workers into company pension schemes, this has introduced a further issue regarding zero-hours workers, who will likely have fluctuating earnings, and whose pay dates will
probably not coincide with the company's relevant pay reference period. Another issue arises in establishing when a zero-hours worker reaches the threshold of qualifying earnings for the auto-enrolment requirement. Furthermore, if the zero-hours worker is auto-enrolled, their earnings could subsequently decrease below the qualifying threshold, and for such a period any deductions made to reflect employee contributions into the pension scheme will not be mandated by statute.
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Employers could face unlawful deductions claims if there is no contractual basis on which they can deduct such pension contributions.
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This risk can be avoided by enrolling all employees contractually into an auto-enrolment compliant scheme, or by using advanced (and likely expensive) payroll system making sure that deductions are only made for the month where the worker reaches the threshold.
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Employers should track employee earnings carefully and periodically reenrol employees into the scheme under auto-enrolment rules as, should the employment contract provide employees with the right to opt out of the scheme, the risk would again be that the employer could face liability for unlawful deductions if contributions are still deducted from salary. Undoubtedly, despite the risks these contracts are proving popular with UK businesses, however as detailed above care should be taken by employers not only prior to offering a zero-hours contract to workers, but continuously throughout the working relationship.
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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.
The Battle of Stirling Bridge
Lesson From History
Lets travel back to 1297, The Battle of How does this relate to hotels and Stirling Bridge. technology? In that battle, John De Warenne, (the Earl of Surrey and leader of the superior army (in numbers) of English is marching against the Scots. He decides to take heed to the advice of Hugh De Cressingham.
Well, we still have accountants in hotels who make decisions that cripple the original vision of the hotel owners and managers!
These are the kind of short-sighted colleagues who are absolutely Cressingham was the treasurer of the necessary in keeping the balance English administration in Scotland, an right, but who also see any type of accountant by modern day terms. investment in electronics, mobile devices and new innovation as a The Scots only had about 300 knights “capital investment”. or mounted men-at-arms whilst the English cavalry was estimated at That approach to technology strategy My writing in Hotel Industry Magazine close to 3000, sporting some of the means you are gridlocked for five normally focuses on hotel technology best warfare technology of the time! years, utilising legacy systems that and the new innovations that help us are so inflexible that you will only be deliver better service. A Scottish knight who joined the considered innovative for the first 12 English side offered to show a months of using them! However a number of events different route further up the stream (including some consultancy projects that would allow the English to We are witnessing a new Era of that the mantra of “saving money” outflank the Scots, but Cressingham consumer behaviour and also a new resulted in some unfortunate insisted that by using Stirling Bridge era of employees that need to be decisions by hoteliers), made me (that only allowed two-three horses inspired. realise that no matter how much I side by side to pass) they would save write about technology and the considerable amounts of coin. Forget about the divide between work plethora of opportunities and -life balance, that was the mantra of possibilities, there are still plenty of The rest is literally history: from the Generation X. Today’s generations hoteliers that chose to take short cuts 10,000-strong English army, less than talk about life-life balance. or listen to an advisor that seemingly a thousand survived whilst the Scots has little understanding of concepts sustained just a handful of casualties. They realise that work and life are such as vision or strategy! both part of one continuum, not two Army numbers vary depending on separate segments. They simply do So for this issue I have decided to source, but this is a defeat that need not share the same thinking that we, take a little detour… not have occurred. the older generations, accepted.
We need to alter our thinking and embrace technological innovation and see investments in technology as an investment in consumables. We need to be ready to inspire, but also to let our employees and customers inspire us in turn through the usage of technology that we never imagined. We need a strategy that truly empowers the younger generations. We need to stop our complacency that characterise our sectors . No longer should we borrow technology from aviation or retail, we should be nurturing our own research and development teams.
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We need to be nibble and fast and grab opportunities the moment they appear. And technology can really help in the pursuit of internal, and external customer service excellence.
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If we need to travel back in time even further to convince ourselves then let us do so.
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Remember what happened at the Battle of Salamis (480 BC) during the Greko-Persian Wars? Template policies and contract clauses
A flexible innovative smaller force with superior technology will almost certainly defeat a bigger but inflexible opponent. When you think of your competitors, what do you see? Do you see a giant that should be feared? Or do you see the giant but also see in you a hospitality-warrior that dares to “fight the unbeatable foe� and beat the odds? Please do not become a Hotelier that allows your strategy to be undermined by your accountants or anyone else with a smaller vision than your own. You are better than that! We are all MUCH better than that!
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It’s 9:30am and it’s a Monday morning. Business is tough, you’re concerned. The sales meeting was due to start at 9:15am but two out of three are late. Jason arrives looking the worse for wear, as he puts it later, “a full on weekend” and Caroline is late because there was no hot water. Still, the obligatory kitchen-side chat and coffee must consume Mondays first ten minutes.
The frustration builds; it’s just you and Annabel who appear to care. The meeting starts and clichés flow. The reports, well-written but studiously vague, are really just another one of those mindless ‘haveto-do’ exercises that get in the way of cheerful fun. It’s time to chat about activity and here are just some of the lines that emerged:
On the 7 show arounds last week: “They went really well”, “They were really nice”, “They loved our hotel” and “I liked them” On activity for this week: “I’ve got to meet the printers, interview the digital marketing student and meet the interior designer about wallpaper for the function room”.
On results from the Meetings Showcase: “83 attended and the feedback was really positive”. On reaching targets next month: “I’ve got a really good feeling about next month”. On new prospects: “I’m just waiting for the new advert to go live”. On lost business: “We were too dear”. On external sales calls: “I’ve a meeting with the Pharmaceutical Company on Monday week”. On follow up: “I’ve two quotes still out there and I’m waiting for them to get back to me”. On any other business: “Can I have a private chat about my salary and holidays later?”
lunches, commission and more. In fact, you might unwittingly have sold those little trinkets when you employed them. Then again, wasn’t there a reason why they were available in the first place? Here’s a few things you could think about doing before you dive in and recruit:
Check their track record with the people who weren’t on the reference list.
Ask them to explain the difference between marketing and sales, but make sure you know beforehand
Get them to sell you your hotel once a quarter, but know your USPs, ethos and brand values first.
Go with them to a sales call, but don’t tell them when.
Have a short sales meeting every week, not every month.
Mystery buy them. Get a trusted friend to tell you how good they were.
Test their follow up. Did it summarise the problem?
Of course the real problem here is that you hired Jason and Caroline to sell and they thought differently. Quite quickly, they morph seamlessly from “sales” into “marketing” because there’s more ambiguity in theory than in hard transparent figures. You get frustrated and they wonder what your problem is. It’s all about expectations and that’s just the first chink in the armour. You see, very few people want to be in sales. They want the benefits they perceive: freedom, a car, long
Conor Kenny is author of Sales Tales and CEO of Conor Kenny and Associates. Experts in sales, marketing, sales training and people development, CKA help you to get the most out of your people and your business. Discover more: www.conorkenny.com
Ask them to set objectives for the next two weeks. In two weeks, review, assess and score.
Ask them to define failure. They will set their own standards and you can agree or not.
Interview carefully and slowly. Think of how long the opposite end of the process can be.
People who succeed in sales do so out of a great desire to help other people. It’s attitude that matters. If you recruit a misfit then don’t blame the candidate, blame your process. Good sales people, especially in the hotel business, are very hard to come by. If you nurture them, train them, develop them and listen to those rare good people, you will immediately stand out from Mr. Average next door. After all, the first part of selling is simply to get noticed. After that, it’s a journey that must follow all the steps. Failure comes when ‘being clever’ means skipping a step or two. When that happens, you usually fall into the water and might even drown!
Conor will be presenting at our two-day Hotel Sales Workshops in Manchester and Birmingham.
The quality of service and care your guests experience - and the likelihood of returning - is probably as much down to your team and how they care for your guests as it is about the quality of food, your choice of decor or the crispness of your linen.
answers, where you’re encouraged to seek out new activities and it’s accepted that people will fail occasionally as long as you learn from experience.
There are many reasons why hoteliers may be tempted to cut back on training, but developing your team is a critical factor in keeping your hotel standing out from the competition.
Before embarking on any training establish your expectation, what you want to improve, and why.
Not only does it provide consistency in customer service; well-trained staff can help improve productivity and efficiencies and can free up your valuable management time. Investing in your team also helps them feel valued. This leads to better employee engagement and motivation, and can help your business establish a reputation as a good employer, enabling you to attract – and keep - the best people.
projects on real business issues, identify staff champions, encourage job swaps and cross training for greater flexibility amongst the team. 4. Plan Ahead
2. Know What You Want It's disruptive for everyone involved when people are given inadequate notice.
Being concerned about your day-toAsk yourself how you’ll know when it's day duties not being covered will at been successful. Not every problem best be distracting. Give forethought equates to a training need. for people's schedules, busy periods in their working week or month and Avoid the sheep dip approach; only consideration for a life outside work. involve those who’ll benefit; and have an opportunity to it put into practice. So give plenty of warning, and remember to tell them what they’ll be No one wants to sit through learning and why. something that is a repeat of what they've already done, irrelevant to 5. Make it Engaging and Fun their job, or insult their intelligence as they've been doing the job to standard Get people involved. Ask for opinions, for many years already. add energizers and group activities.
3. Be Creative But if you’re yet to realise the benefits of training, here are some ideas on Stop thinking about training purely as how to reap its full potential: an activity that takes place in a classroom. Formal off-job training can present logistical challenges, 1. Create a Culture particularly with complicated shift Make learning a part of the day-to-day patterns. activity, where it’s second nature for people to help and support one Use everyday activities as another, and to learn on the job. It opportunities for development. Use should be okay to ask questions and team meetings to direct focus and to admit that you don't know all the reinforce messages. Assign tasks or
Use team exercises to encourage interaction, and quizzes and games to add an element of competition and fun. Add variety. Do something different to what people are used to; make it interesting and memorable. Take people away from their normal environment (as long as this doesn't make them feel uncomfortable), use interesting presenters or even actors.
Caroline Cooper is a speaker, author, trainer and consultant on customer service and loyalty. She’s founder of Naturally Loyal, specialising in helping businesses retain more of their quality customers. She is also author of The Hotel Success Handbook Discover more: www.naturallyloyal.com
6. Make it Transferable Make the transition from theory to practice easy. Use relevant examples to help people relate the principles to their own job. Help them identify situations where they can put their learning into practice as quickly as possible, preferably within the next day or two. Identify obstacles that might prevent this happening. Do they have the necessary resources, time, authority, peer support and opportunity to put their learning into practice? Don’t expect perfection straight away. People need time to practise and find their own way of doing things, and they shouldn’t feel afraid to make the odd mistake when they apply their new learning, so long as they learn from it. It can take a while to instil new habits, so put checks in place to reduce the likelihood of reverting back to the ‘old’ way. Assigning a mentor, coach or buddy can help overcome the initial barriers to perfecting a new skill. 7. Measuring your Return Don't continue to invest in learning and development activities unless they are paying dividends. However recognise and be prepared for the fact that sometimes this will be a longterm return.
The Guest Experience is the competitive battleground for all hoteliers. As meeting guests’ emotional needs is 70% of the guest experience, it more important than ever to go to greater depths to understand how guests feel about you. What are their emotional drivers and how can you use this intelligence to anticipate their needs, identify new revenue opportunities and create profitable experiences? Understanding how to evoke positive emotions for your guests will enable you to create powerful memories for them that they want to share. Emotions help create memories. Memories create stories. Positive memories and stories drive revenue as guests become an advocate for your property. Going beyond the usual guest feedback channels such as apps, text, email and paper surveys is necessary to get inside the minds of your guests.
Here are four key actions you can take. 1. Understand your guests’ emotional journey You need to identify what emotions your guests value at the key touch points in their journey with you and also those they want to avoid.
2. Competitor Intelligence Ask your most profitable guests where else they stay or would like to stay. Be brave and ask them what they like and don’t like about your competitors and why. As well as visiting competitors yourself, follow them on all social media channels and monitor their Trip Advisor feedback closely.
No hotel deliberately sets out to create negative emotions for guests, but it happens, and you need to know what those are so you can work out Compare it carefully with your own. how to eliminate or reduce their This will identify the things that guests impact. most value, what they like to tell stories about and what upsets them. For example; guests might want to feel excited when making enquiries, 3. Listen to staff seek reassurance and stimulation prearrival, feel valued and special during Let them know you want to receive their visit. guest feedback daily. Ask them to plot trends in guest perceptions, emotions They probably don’t want to feel part and behaviour and be active listeners. of a process on arrival or feel hurried or dissatisfied on departure. Hold weekly staff listening groups or start an internal feedback system, Most importantly what memories will anonymous if necessary, so you those emotions create for guests and capture in the moment guest thoughts what stories will they tell about you? from staff. Good ones or bad ones?
Anne Blackburn is the co- founder of the award winning Sidona Group. As Customer Experience Director, Anne specialises in mystery guest programmes, guest research, learning design and conference speaking. Discover more: www.sidonagroup.com
4. Develop a critical guest. You need to know what it really feels like to be your own guest. Ideally, when you are not on duty, invite critical friends to experience your hotel journey from enquiry to post departure. The de-brief should evaluate all your hotel processes, staff interactions and emotions evoked. How easy are you to do business with? How committed and caring are the staff? How knowledgeable are they? How special and valued do they make guests feel? You can clearly assess the physical aspects of the hotel yourself, it’s identifying and managing the emotional element of your guest experience that you need feedback on. Perceptions, needs and competitors constantly change, so this needs to be an ongoing part of your hotel business strategy and drive your leadership decisions. Especially your recruitment, training and development plans to ensure your teams demonstrate the right attitudes, behaviours and language that create unique and profitable guest experiences.
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HR and employment law for hoteliers
Step-by-step guidance for hoteliers
Template policies and contract clauses
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