What-Franchise-Issue-20.1

Picture a carefree life in a grand hotel at a scenic location, meeting people from around the world. That’s the life of a hotel owner – or that’s what the films would have you believe. Garin Davies, CEO at Vine Hotels runs several franchised hotels including Accor, Best Western, and Hilton. He gives readers a dose of reality. What does it take to open a hotel? 1 / How easy is it to open a hotel? Like any business venture you embark on, the hospitality sector comes with its own set of complexities. You shouldn’t enter the industry because you like staying in hotels and so you feel you know what makes them tick (you’d be surprised how often I hear that). It’s a business that requires tough decisions and strong cost management. At its heart, it’s a service-led sector that requires creating experiences. That costs significant money up-front but can prove to be a good investment long-term. In simple terms, opening a hotel is easy but opening a well-run, profitable hotel takes years of experience. 2 /What is the typical lifestyle like for hotel franchisees? For me, it’s about managing the teams that deliver the experience. Ensuring general managers are effectively delivering on sales, revenue management, cost control, procurement, human resources, and guest service. I’m also involved in ensuring that the hotels maintain the brand standards we commit to in a franchise agreement, and in return, that the franchise team is working to promote and develop the hotel. 3 /What trends are you seeing develop in the hospitality industry? Post pandemic and with the cost-of-living crisis, the corporate sector has contracted significantly. Business meetings are less face-to-face, and conferences are getting shorter. Companies bring remote teams together less often but make more of the opportunity when they do. So, franchisees will need to consider how they can offer a different proposition to the corporate client. The Christmas market has had renewed growth, so maximising revenue in November-January is crucial.We manage several hotels in tourist locations, with clear seasonality, so this brings challenges. The summer season has shrunk, with more UK guests travelling abroad or scaling back holidays. So, franchises will need to get clever on finding new markets or perhaps looking at the international traveller. 4 /What should you consider when assessing the profitability of a potential hotel location? You must be clear on who your market is, and how can this be developed. How will I reach this audience? Is there growth in the audience? Maximising bedroom numbers is key to profitability, so looking at the potential for expansion or the creation of additional guest rooms could play a big part in your cost decision. The business head will also assess what investment is needed to bring the hotel to a standard that a franchise hotel needs to maintain. You may have to commit significant money and make changes ahead of securing your franchise. I also like to look at the wider social and economic makeup of the area, and what infrastructure is in place to get travellers to the hotel. 5 /What’s the biggest challenge for hospitality right now? The economic trading conditions are a huge pressure. Rising costs on simple utilities have sent many hospitality businesses into administration. Plus, a tougher recruitment pool following Brexit means payroll is higher and it’s harder to fill vacancies. 6 /What philosophy does a successful hotelier need to have? Be prepared for hard work - you’ll need to make bold, tough commercial decisions. Never lose sight that at the end of your business is a guest. The desire and enjoyment in creating the right experience is what drives the sector. 59 WHAT-FRANCHISE.COM Interview