The owners of The Headland in Cornwall cut costs by more than £120k over the last 12 months after re-evaluating the efficiency of the business during the hotel’s ‘most difficult year’.
Carolyn and John Armstrong, who have owned the hotel overlooking Fistral Beach near St Ives since 1979, stepped back into the business in March when the pandemic forced England’s first lockdown, and made significant changes to the way the hotel was operating, cutting costs by around £127k.
The lockdown allowed Carolyn and John to get fully immersed back into the business and reassess where money was being spent.
Speaking to BH, Carolyn says: “We cut out the OTAs in June, which saved so much. For the three months, July, August and September, in 2019, our OTA commission totalled £70,700. This year, (2020) it was just £9,400, a massive saving.
“Being business owners, we are not just investors, we actually run the hotel and when our MD left, we looked at where we were with all of our expenses,” Carolyn says. “We looked at our costs, went through and decided what we didn’t need and what wasn’t giving us good value; we cut out of a lot of costs.”
One area they focused on was the hotel’s heavy reliance on agency staff, which Carolyn admits ‘is not the way forward’.
From July to September in 2019, agency costs totalled £50,500 – in 2020 the pair trimmed this down to just £13,000.
Alongside agency costs, The Headland has made huge savings on recruitment. Previously almost £30,000 was spent on finding and hiring the right people, and in 2020 this figure shrunk dramatically to just £1,400, which was used on advertising for the hotel’s new general manager.
“That’s what you can do when you are owners of the business. We got our priorities right,” Carolyn says.
The government’s VAT reduction, which the hotel retained, also meant a further £284,000 was saved in July and August, and £142,000 in September across the business.
Carolyn and John have taken an admirable approach to running the business during the pandemic. And key to their success is the transparency they have championed between senior management and staff.
In June, with no reopening date announced, Carolyn and John revealed that they were to start the difficult process of asking for voluntary redundancies at the hotel.
However, when July 4 was confirmed as the reopening date for the hospitality industry, the hotel was able to retain 90% of the jobs initially considered for redundancy, and instead seeing the loss of just 12 members of staff.
Further positivity came later that month when The Headland officially launched its much-anticipated £10m Aqua Club.
“We had our best occupancies and takings ever when we reopened,” explains Carolyn.
To read the full interview, keep an eye out for the February edition of Boutique Hotelier.