A well known hotel group operating four sites on the southern coast of England reached out to the GJC team for help with their financials.
Whilst they had a property portfolio of £21m, over 300 staff across the sites, and were turning over £12m, they were still producing a loss each year. The losses were totalling £0.5m and they were in danger of spiralling with operational costs increasing.
The solution ✅
The team at GJC Advisory were introduced via professional advisors, and very quickly a strategic review of the business commenced. The review incorporated mystery visits, deep dive interviews with staff and customers, financial analysis, competitor comparisons, desktop research and consideration of historical customer reviews from many other sources.
The output of the review was used to formulate a 12 month action plan of priorities which we were retained to deliver.
The journey ✅
We recommended a refurbishment strategy balancing the location and the hotel product within a competitive marketplace to ensure they could protect room revenues over the long term. By altering the business structure we could ensure the efficient running of the hotels, and its long term financial viability. The focus would be on delivering high levels of customer service on the floor every day, driving returning customers and increased customer spend.
To ensure the new strategy succeeded, we recruited and developed a strong senior management team to support the business owner and to help facilitate the strategic direction of the business.
We developed a strategic marketing plan based on the exploration of customer segmentation and overhauled the brand to fit the segment ; including guidelines/photography/look and feel/tone. The new brand was extended and developed into a new website, supported by a new digital strategy including social and content. We complemented the new brand by formulating a new food and beverage strategy to reflect the individual personality of each hotel, which was well received by customers. Introduced new service standards and training to ensure staff deliver an experience in keeping with the hotels, further developing the confidence of the teams to engage with customers, so enhancing their visit.
By carrying out a full procurement review of each item across the sites from food, drinks suppliers, OTA’s, consumables and housekeeping, we were able to formulate new strategies to make the most of operational efficiencies. We prevented off season losses by flexing rotas, controlling payroll, introducing group purchasing controls and training staff to work across different areas of the business.
The results ✅
A significantly improved online user journey and a stronger online presence through our new digital marketing approach resulted in a large increase in web traffic, combined with a 28% bounce rate on the website compared to industry stand of +50% saw a 50% uplift in direct online bookings taking away share from OTA’s.
A better quality food and drink proposition that now sees the margins exceed over 70% thus increasing profitability across the group, and resulting in increased spend per head from £8 to £30. Through the in depth procurement review, we were also able to see savings of £100k pa.
By restructuring the mid-management team, saw a headount saving of £500k pa, and a team strong enough to support succession planning for the heads of department. A robust training and development plan was put in place to engage staff and decrease the employee churn rate. Keeping skilled staff in situ was important to the group.
Successful plans enabled a fund raise of £5.8m, £4.5m raise for the refurb and £1.3m CBILS repayment. Health and Safety review overcame a non-insurance issue within one of the sites (ahead of an unfortunate on site event that required insurance claim to be made): £1m property insurance claim, and undetermined loss of revenue claim in-play.
