MANCHESTER, England — Whitbread PLC has a goal to grow Premier Inn, the United Kingdom's largest hotel brand by room count, to 125,000 open hotel rooms in the country.
Simon Ewins, Whitbread's managing director for U.K. hotels and restaurants — and a 24-year veteran at the company — shared his vision to help Premier Inn meet that 125,000-room goal during a keynote address at the Annual Hospitality Conference. Whitbread has 85,000 hotel rooms, mostly in the U.K., along with some in Ireland and a growing second scaled portfolio in Germany.
He said Whitbread's success comes from having control of its estate, its guest data and growth potential.
“It is a virtuous circle. Constantly, we learn about what makes hotel postcodes and micro-markets successful, and we do not think any other hotel firms think that way. That allows us to build product with consistency. We own most of the portfolio, and we operate all of it,” he said. “We can scale portfolio and consistency and then keep rinsing and repeating. That is in essence the nature of our model.”
Ewins said that 98% of the company's hotel portfolio is Premier Inn. Last month Whitbread announced it plans to develop a 276-room Premier Inn at Manchester Airport, which will be its largest in northern England.
“We roll [Premier Inn] out to be consistent with our demand model. We do not play with that model or hotel form much. It is a standard 24 square meters [258 square feet] per room,” he said.
Whitbread's other hotel brands include Hub by Premier Inn and Zip Hotels by Premier Inn. He added Whitbread created Hub by Premier Inn to put properties where the company couldn't afford a Premier Inn.
“We’ve been able to access some weird and wonderful sites such as Snow Hill in London, an old Victorian fire station that is a Grade II-listed building. I do not think there is any other company that could develop that,” he said.
Guest requirements or site specifications also have resulted in a few Premier Inns being a little off-kilter, he said.
“There are some Premier Plus room-style hotels with a few more bells and whistles, and we have a new [food-and-beverage] option called Social. Little tweaks do add up cost, though, when they are in a huge portfolio. We need to work out what the proposition is for Hub, and there is major work going on in that,” Ewins said. “The company was founded in 1742, so it has gone through some changes.”
Ewins said there is a lot of work to be done before Premier Inn reaches its goal of 125,000 rooms.
“We have to be fleet of foot and athletic, but we see big opportunities in costs and property conditions, which are looking to be more favorable in the U.K. We have signed big leasehold deals as well as freehold ones,” he said. “Some of the original hotels that helped grow the brand are not so economical now, so we have some thinking to do.”
Whitbread is also changing its food-and-beverage concepts and is not afraid of making some bold decisions, he added.
“We have approximately 450 restaurants, and we are in the process of disposing about 125 of them where we think outside firms could do a better job,” Ewins said. “There are also 110 or so site plans that are freeholds that we believe we can repurpose to add some 3,500 more [hotel] rooms. That idea takes away lower-returning, less attractive assets and give us more productive rooms.”
He said that while 200 pub restaurants might appear to be a small consideration in the Whitbread world, that still is in anyone’s book a very sizable business.
“We need to run those businesses sensibly, sustainably and perhaps more importantly commercially. They are an important part of any community, so we will do all we can to make of those a success,” he added.
Challenging conditions
Ewins is hopeful that U.K. consumer confidence will grow as the direction of the new Labour Party government becomes clear and ideally more jobs are created.
“Hospitality is fed by confidence,” Ewins said. “Hospitality is a treat, so a little bit of bad news in the media, and the demand drops, and vice-versa.”
Boosting employment opportunities in the hotel industry has become a personal crusade, Ewins said. The process of creating and advertising meaningful careers in hospitality needs to start with the industry getting the full credit it is due.
“In the U.K., the industry employs more than 6 million people and provides £56 billion [$74.6 billion] annually to the economy, but the sector is not taken seriously,” Ewins said.
The hotel industry as a whole needs to keep evolving, Ewins said.
“Food and labor is more expensive. We have to be constantly ready to innovate and get beneath our models to see where we can be more efficient. You need to be ruthless. Hospitality will always be here, as we are a social species, but this is about operating and executing in a world-class way,” Ewins said.
He said he is hopeful the Oct. 30 budget in the U.K., the first for the new Labour Party government, will produce favorable business conditions.
“It is a misrepresentation that there is constant labor churn. We have to have a compelling vision, treat our staff well and allow them to grow. That, in turn, will grow their confidence and increase their deliverables, which will bring back more guests,” he said.
He added that he saw artificial intelligence as a process that will be woven into the fabric of what always will be a people business.
“Hospitality is something only a human can give,” he added.