Mark Chambers is a man on a mission. When he sits down to talk to Boutique Hotelier, the ink is barely dry on the biggest deal of his career to date, the purchase of Bovey Castle, one of south-west England’s most iconic hotels.
The news comes on the back of the announcement just a few weeks previously, that EHC had purchased Tides Reach, a traditional seaside hotel on a prime position overlooking the beach at Salcombe in Devon.
Tell us about your role at EHC
When I joined the company as GM at Mallory Court in early 2006, my job was very much to be part of the growth plan for the business – which was to add appropriate hotels as and when it was opportune to do so.
There was no target number. What we wanted hasn’t changed since those days.
We wanted Eden Hotel Collection to be recognised as a leading boutique hotel operator.
We had a bit of a spurt in 2012 when we bought three hotels but we’ve tried to go for sensible growth where we’ve been able to absorb those businesses into the existing structure and adopt and adapt what’s right and wrong so that we could continue on the trajectory of being quality hoteliers doing things properly.
You so often see exponential growth in certain groups then they can’t cope with it and they lose their way.
You’ve recently added two more properties in as many months…
Bovey is a leap for us in terms of size of property because it’s our single largest hotel.
The team there has done a great job at steering that property, it’s big and not an easy location.
It has 65 rooms and 24 holiday lodges in the grounds. It has a golf course, it has a big spa, it’s a huge site.
It’s a formidable grand dame in the industry and we’re very excited for it to be part of our collection because we have a quantum of very small hotels.
There will be investment – it needs it.
We’ve earmarked £2m as an initial figure. There’ll be a programme of works – once we get our feet under the table – in the public rooms and restaurants and bedrooms.
Hopefully we can bring the benefits of scale that you get through some resourcing, some purchasing and our central office team but importantly through the marketing effort.
What about Tides Reach?
Tides Reach is a golden opportunity to do something really special.
The existing hotel was built 50 years ago and in modern-day hotel-keeping terms wasn’t really fit for business.
So we took the decision to create something new and Tides Reach will be a contemporary, modern, 21st century hotel that delivers for that location and it adds a further string to our bow in the EHC.
It will be a 50-bed build with some exciting food and beverage propositions across several concepts, and there will be a spa as well.
As a hotelier I want to deliver something that has a point of difference over what our competitors are offering.
That was a £12M investment, How much of that was acquisition value?
The acquisition was about £3m and the entire cost will be in excess of 12m.
As directors we live and work in the communities where we have hotels, and it’s really important to us we engage as good neighbours – that’s even more important when you’re developing because you don’t want to be enemies before you put a spade in the ground.
We’re at the pre-application stage now. We had a local consultation for a day in Salcombe last month and it was very positively received.
Timescale for approval is mid-summer and we’re feeling positive about that.
We’re not creating something to build and sell on in three years’ time.
We want to be part of the Salcombe community for years to come.
One of the things for us is to make the most of the coastal location, on the waters’ edge.
Will you be hoping to keep some kind of consistent ehc experience to the new build?
All the core values I mentioned earlier will remain. We’re making memories for people, be it a multi-generational family holiday on the coast or a couple on a country house spa break.
What do you look for when recruiting into the business?
We’ve got 400 people working across the hotels.
There are some things written down but essentially, we specially select people, in particular the general managers that lead on a local level.
They have to subscribe and be in tune with what we’re trying to achieve and I think we’ve got that absolutely right.
All of our GMs are integral to the business they’re managing locally and they get what EHC is about.
We’re looking for people who are very clear on the understanding of the quality end of the business but we don’t exclusively seek people that have only ever worked in the private sector, though people that come and work with us tend to be from that background.
But what’s right at Mallory Court restaurant won’t necessarily be right for the Greenway Hotel.
It’s about empowering people to deliver what they think is right for the business and as long as they understand what we’re trying to achieve we’re all in tune.
I don’t think it’s any secret that all businesses struggle to recruit skilled and talented people, it’s tough and that’s where – as an employer – you’ve got to make a point of difference about your approach and work ethic.
Every hotel collection will only be suitable for a certain type of person – someone with their own initiative, flair.
Take a chef for example, we don’t give our chefs menus to cook, our chefs give us menus they’re going to cook, so unlike a branded product where you’re given a kitchen, 10 microwaves and menus labeled A to F, we want our staff to stamp their individuality on the plate.
Have you seen more good-quality properties coming on the market now as business is starting to pick up again?
There’s probably been a little more of a surge in Q1 of this year, but I wouldn’t call it a spike –we have consistently seen businesses for sale in the last five or six years and during the peak part of the recession there were a lot of distressed businesses coming through that weren’t of interest to us because of the type and style of business that they were.
You also see various combinations where people have lived on the fat of the business during the good times and failed to invest and you’re looking at a business that is overpriced because they owe too much to the bank, needs huge investment and then becomes commercially unviable because it needs too much.
What do you look for in a potential acquisition?
The key things have always been… the hotel has to be fitting for our group – so hotels that are architecturally pleasing and lend themselves to offering a bespoke or boutique type product.
So a building that has bedrooms that are all very different for example – that’s what we’re working for.
The business has to be trading relatively well but not so well that we can’t make a difference, it’s got to reflect the price, location is important, architecture is important, reputation is important.
For people on the acquisition trail, the recession is a good time because, if you have funding available, you’re able to pick up some good businesses and that’s what we did.
The demise of Von Essen hotels, for example, saw us buy two quality hotels that have added value to the collection.
You’ve still got to manage these businesses through really tough trading conditions, it’s all very well being able to pick up a bargain but it’s no good if you can’t trade it better than it has been so you’ve got to be able to make a difference.
What are the biggest challenges to business?
There are a number of things really. We have seen our wedding trade tail off and our corporate business fell away quite quickly when the recession hit.
And overall, the market became very price sensitive.
The industry has tried to retain the volume and the occupancies but we’ve all seen that, with very few exceptions, impacts on rate, which then affects profitability and then you have to watch your costs much more carefully – it’s no different in hotels to any business.
If you’re not putting enough sales in at the top you’ve got to watch your costs.
Your past experience has included working for international chains. Did you learn lessons from these multi-nationals that can be incorporated within a small domestic, boutique chain?
During my time with the chains I learnt the essence of customer service and how to run a hotel operationally.
What I’ve learnt in the boutique hotel market is much more akin to what I think is needed nowadays – how to take a business forward without the benefit of the massive brand behind you.
And I learned that you can fill the hotel up when you let the rates drop through the floor but you haven’t made any money.
On the other hand, lessons can be learnt as a hotelier in the boutique part of the industry by sharing your experience with colleagues.
I am involved in several networks across the industry in order to discuss how we can make the industry better – and that’s a valuable thing.
I’ve learnt through being vice chairman of the Meetings Industry Association that it’s a hugely sophisticated and competitive business and in hotels of our style and size generally, we were way off in understanding that.
When I began to engage with other members of the MIA I realised we’ve got to get on top of it.
It’s all about customer proposition, how you’re perceived and what you’re delivering for the customer.
We’ve worked really hard on that and engaged with these organisations – not exclusively to the meetings and conference business.
For example, we thought giving a superb set three-course lunch in a Michelin environment was really appealing for the meetings market in one of our hotels, but actually that is the last thing conference delegates want at lunchtime.
We were so involved in our own offering and thinking that it was the best, we didn’t really ask what the customer wanted.
When you took on Tides Reach you said the south west was a key area for you – do you have it covered now with this property?
Never say never. I can tell you at the moment there’s nothing on the horizon but my chairman is a very dynamic gentleman and he’ll never sit still, particularly when it comes to expansion.
So I could put the phone down to you and he’ll ring me with an exciting opportunity – that’s how he opens the conversation: “Mark, we have an exciting opportunity.”