With the roll out of his three debut sites well underway, Nassar Khalil, chief executive and founder of Rogue City Hotels, is confident that now is a very opportunistic time to invest in the hospitality sector. We speak to him about the launch of the new brand, the struggle to find funding during the pandemic and how his concept challenges the norm.
Nassar Khalil has one ambition; to carve a niche for a new transparent hotel group that puts technology and service excellence centre stage, with no nasty surprises for guests on departure.
And he is well on his way. Rogue City Hotels is currently under construction with its first three sites in Perth, Cambridge and Glasgow as momentum for the new brand picks up pace and Khalil looks to ‘disrupt the status quo in conventional hospitality’.
Khalil is director of hotels and leisure at Henley PLC as well as the founder and chief executive of Rogue City Hotels Group and runs his own consultancy, Essential Hotel Management Brands. He works on a 50/50 partnership with Henley Homes to deliver the design and funding of each new site which will fall under the Rogue City Hotels umbrella, while the group’s subsidiaries Henley Construct and Henley Design complete the construction. He entered
In Cambridge, the Grade-II listed Hobson House formerly the first police station in the city, is being transformed into a new 60-bedroom hotel, atrium-style restaurant and meeting rooms, with completion expected in Q3 2022.
Meanwhile in Glasgow, construction is underway to convert a late B-listed 1800’s former tribunal court into a new 98-bedroom boutique hotel, which will be known as The Wellington. The group has recently won a site in Perth and negotiations are reaching their final stages to secure the brand’s first London property in Harrington Gardens.
“Some may call me a fool, and that maybe hospitality is not the best to be in right now,” says Khalil, “what with all the uncertainty. But if you are good business person, sometimes you see opportunities where others see fear. What I find is, by moving now while others are half asleep, I am actually preparing for a future.”
The group already runs Dunalastair Hotel Suites in Scotland, a full service luxury five-star property which is competing well against the likes of Trump Turnberry and Gleneagles. It’s a profitable business with two restaurants and 32 bedrooms, but is a different model to what Khalil hopes to deliver with the roll out of the Rogue City Hotels brand.
“My concept was always city centre, no frills, a focus on service, with no F&B in house, and making it the best we can, with no surprises with the bill for guests when they check out,” he tells BH.
The new sites will be technology rich, with a huge focus on using innovative solutions to make the guest journey smoother and freeing up staff time to concentrate on that personal service. While restaurant space in some sites may be leased out to an operator, in-house F&B will not be a pivotal part of the experience.
Khalil adds: “Your mobile phone will unlock your door, you’ll be able to acclimatise your room through your TV, sensors will determine the lighting and you’ll be able to order things through voice activation via Alexa.
“People can be checked in within 60 seconds on an iPad, and a code sent straight to your mobile.”
Without a traditional dining room on site, each hotel will encourage guests to venture to local restaurants, pubs and café and will offer discounts to help feed into the local economy.
“I’m not just ‘joining the club’ of another hotel in the city. I want to make sure my hotels are different.”
Creating the concept
Taking away the costly overheads of a restaurant space, the business can concentrate on investing in the bedrooms and maximizing room rate. The concept may sound like a familiar one; Khalil was one of the founders of base2stay – previously The Nadler and now The Resident – before he sold his shares in the company in 2011.
A stint working with Qatar Holdings Sovereign Trust to launch its only seven-star in Doha followed, before Khalil moved back to the UK in 2013. By this time he was out of a contract which restricted him from replicating the base2stay model, and had the vision to do something ‘bigger and better’.
“I was surprised that nobody had challenged the Nadler,” he says. “I know how lucrative what I had created was. By editing out the F&B and focusing on the common commodity of the bedroom and making it as good as it can be, you are still able to charge rates of that of a conventional hotel without all the overheads that comes with F&B.
“I want our hotels to be a direct challenger to The Resident – what was formerly The Nadler. But I want to do it bigger and better and higher in standards,” he adds.
Khalil’s experience in hospitality started from humble beginnings with a placement at Claridge’s, where he admits he ‘got the bug’ for the sector. His first breakthrough came as front of house manager at Hilton Olympia and then went on to work for the likes of Montcalm Hotels and K West Hotel and Spa under the Nikko Hotels ownership. It was here he learnt real attention to detail – “I once had to fire someone for putting a pen in their mouth whilst they were checking in a guest,” Khalil adds.
It’s this pedigree that helped Khalil secure the first round of funding for his ambitious new projects with Rogue City Hotels. However it was with financials locked in for the roll out of the first two sites in Cambridge and Glasgow and money spent on legal fees, that the pandemic struck and funding partner DRC Capital got cold feet.
“Because of the pandemic, they said they would no longer be lending to hospitality so they had to pull out,” Khalil says. “That was a £25m deal that I secured with them and I was left holding the baby and £300k plus of legal costs. What do I do now? I have two empty buildings – we have already started construction, we have already fixed prices with suppliers; it was a lot of sleepless nights.”
Khalil then had to bang on many doors to no avail, and was struggling to find a new lender as the months rolled by. Construction was stalled and the future looked in doubt for the group bearing in its infancy.
“Finally because of my track record in the industry, I managed to get a funder in Tikehau Capital; they saw the potential and I signed a deal with them to fund the next two hotels and beyond,” Khalil adds.
Prior to the financial complications, Khalil had fought hard to compete for the sites in the first place, given their history and listings. In the battle for the building in Cambridge, Khalil was up against five or six ‘big boys’ from the likes of Marriott and other hotel chains, and even after winning the site, planning permission proved difficult.
“I had to go and speak to each councilor and explain my concept, and how it would be an economic multiplier for the local area,” he says.
Aims and ambitions
Each hotel within the Rogue City portfolio will have its own identity and carve its own reputation in its location, with a core thread running through so guests will know it belongs to the wider group. Khalil says the company has been specifically designed like this.
“They are all Rogue City Hotels, but each one will have its own standing,” he explains. “So Cambridge will be The Hobson and have its own unique design, complementing what the city provides. The Wellington in Glasgow will be a bit more edgy in design, with exposed brick wall and neon lights in the corridor.”
While construction was paused due to Covid, development is ramping up with a busy few years on the horizon as each site gears up with opening within quick succession.
“Glasgow should be ready about 13 months from now and Cambridge around 17 months,” Khalil says. “We will be launching them two or three months apart, so it’s an extremely busy time.”
The third property in Perth has just been secured after a long bidding process and will be called The Capital. The hotels will all have an agreement in place with Essential Hotel Management, Khalil’s management consultancy arm, to manage each site.
So with an ambitious growth strategy and the ability to be agile with both acquisition and construction, surely further expansion beckons for Rogue City Hotels? While Khalil says he is ‘opportunistic’, he wouldn’t naturally buy existing hotels, as the amount of reconfiguration usually required to fit into his design and concept would mean it ‘wouldn’t make sense’.
Instead he looks for empty sites in fantastic locations.
“I look for car parks, I look for empty plots as long as they are strategically located, that’s the important thing.
“Target cities for me are like Oxford, Bath, Bristol, Edinburgh, Manchester, York; what I call the ‘first tier’ destinations.
“We are actively looking and have a whole team of land managers who are on the hunt for opportunities to convert office buildings and the like,” he adds.