Balmer Lawn was put up for sale last year when its current owners announced plans to retire, but last month, the hotel was taken off the market. General manager Michael Clitheroe tells BH what happened and explains how the property is securing its future amid an industry backdrop of rising costs.
SKIP TO RELEVANT SECTION
“I’m not embarrassed, it’s just one of these things”, says Michael Clitheroe, general manager at Balmer Lawn, a four-star hotel and spa in the New Forest. I’m speaking to him on the phone, soon after news broke that the hotel – which had been put up for sale at an asking price of £12.5 million last summer – had been taken off the market.
He continues: “At the point when you and I first spoke, we were almost certain that we knew who the next owners were going to be. To go from that to where we are today, is a bit of a shock to everybody.”
That first chat took place in Clitheroe’s office a few weeks earlier, where we spoke for well over an hour about plans for Balmer’s future. Clitheroe stands by his belief that the site would be a perfect asset for a small portfolio of hotels, but tells me he is equally as excited about the property’s future under the continued stewardship of Chris and Alison Wilson.
The sale of Balmer Lawn was never a case of desperate hoteliers looking to dispose of a stressed asset, but rather a genuine attempt to explore the viability of retirement after 25 years of ownership. In that time, aided by Clitheroe’s eight-year tenure, Balmer Lawn has been transformed into a confident product which punches well above its weight financially, forecast to turnover £5.3 million in ‘23-24.
In August of 2020, the hotel was granted planning permission for a major refurbishment, which would see the function room capacity double, as well as the addition of 38 extra bedrooms and the creation of a new spa and leisure facility.
The refurbishment is projected to cost around £7 million and will create up to 30 new jobs for the area.
Clitheroe says the Wilsons are now fully committed to ploughing ahead with this. He explains: “Chris, Alison and I brought the planning to the table, because we understood the long term viability difference that would make to our offering. When that was done, it was done with the mindset of remaining in ownership. So for them, it’s not a huge change of path. They and I very much believe that delivering this product through the expansion is going to be fantastic.”
These plans have shaped much of Clitheroe’s strategy for the hotel in recent years and he has kept open lines of communication with staff throughout – since the hotel was brought to market, no staff have left the property and Clitheroe says the team is excited about the future.
He explains: “When you are hired, you are part of that process that one day we will be this kind of product and we are going to go on this kind of journey. I recruit with that in mind. Pretty much everyone for the last three or four years has been recruited on the basis that this is coming.”
Looking to the future
In our initial chat, Clitheroe told me that despite Balmer’s strong financial position, the idea of putting the hotel up for sale was brought to life in part because “it was becoming ever more difficult to run an independent hotel. We don’t have a couple of sister hotels to spread costs, we only have a finite amount of income. The costs are going up and up and up. An independent hotel will feel this disproportionately compared to larger properties.”
Now that the Wilsons will remain as owners, they are in the process of refinancing and Clitheroe says the refurbishment will begin “as soon as possible.” Demolition work will start as early as this summer, seeing an old staff bungalow and garages torn down.
Anyone hoping for a scandalous scoop then will be disappointed. As Clitheroe puts it: “For us, it’s very much business as usual – that might be anticlimactic, but for me, it’s still quite exciting.”
The refurb
While there is huge excitement around the proposed refurbishment, achieving planning permission was not an easy feat. Clitheroe tells me the process took four years and nearly £150,000 in costs to get over the finish line, although the hotel benefited from “huge support” from the parish council, business communities and locals, with not one official objection to the plans.
Recently, hoteliers have told us planning applications caught up in endless red tape are crippling industry growth. Clitheroe acknowledges the challenges operators face in this area, but believes it is about having “a compelling story” and “evidencing safe, secure stewardship over many years.”
He explains: “I have had the backing of these lovely owners to reposition the business through capital investment and investment in our staff on a massive level. When people look at our business and measure it over many years, they can see this is not a get rich quick scheme. This is natural evolution and it secures the hotel for another generation.”
Rising costs
When it comes to the hot-button issue of rising costs, Clitheroe is aware these problems aren’t going away anytime soon and that business models have to adapt. “The interesting thing is, it is kind of a three way approach,” he tells me. “We have the rise of cost of living to our customers, the rise of cost of living to our employees and the rise in cost of receiving goods and services to the hotel. That is not easy.”
Clitheroe says the problem is worsened by guests who perhaps aren’t aware of the tight margins hotels operate within: “Customers think we don’t feel the cold financially and then will start bartering over the phone. There is a lot of reluctance to price.”
To combat this, he says it is important to educate guests about your offering. “Make sure you have a strong USP,” he advises, “and make sure they understand how and where they can spend their money – why is it special? What’s value added about it? We can’t be doing discounts at a time like this, because then it becomes a race to the bottom and this is not going to go away.”
One way Balmer Lawn has created added value is through the addition of a second F&B concept at the hotel. The Lodge is an indoor/outdoor space which serves a more relaxed menu than the hotel’s main restaurant and is more family-friendly. Clitheroe explains: “They are not priced into committing to a fine dining offering and this is a little bit easier on the purse. It is quirky, contemporary and a completely different vibe to the traditional side of the hotel.”
Clitheroe has also championed the local offering, partnering up with nearby attractions to offer a 20% discount on online rates – he says these venues “understand the value of the tourist industry and the hotel accommodation providers locally.”
The discount scheme is also available to hotel staff, some of whom have been largely impacted by the rise in fuel prices as they drive to work. Clitheroe has responded to this by allowing certain back-of-house roles to be conducted from home a few days a week. “With infrastructure and technology investment, it’s almost like they are here anyway,” he tells me. “So why wouldn’t you [allow working from home] if you know that person is really worth fighting for? Let’s make it possible.”
Other initiatives have included raising wages and joining the Hoteliers Charter, which is a commitment to providing a sound workplace environment. Clitheroe explains: “These are things you just don’t get when you join a competitor and I don’t just mean a competitor in the industry. It could be Tesco, could be an Amazon van driver. Do they do this? We really take care of people.”
As for dealing with rising operational costs, Clitheroe says there is no quick fix. He tells me: “You need to see if you can cut costs and not corners. You need to figure out what that looks like.”
Chatting with Clitheroe, it is impossible not to be affected by his optimism. This isn’t a general manager who has buried his head in the sand, but rather someone who chooses to see the opportunity in adversity. You get a sense that whether or not Balmer Lawn were sold is almost irrelevant, as Clitheroe will ensure the hotel’s future is bright either way.
As we are wrapping things up, he takes a moment to awe at the industry he clearly adores: “The true spirit of hospitality has beaten anything that’s been thrown at it. We will get through pandemics, recessions. We may be lighter for it or skinnier, a little more threadbare. But we have learned – we can adapt and overcome.”
