Case study
Turnaround Hotel group
A well-established hotel group situated along the picturesque southern coast of England approached the GJC team seeking assistance with their financial performance. Despite boasting an impressive portfolio of four properties valued at £21 million, employing over 300 staff, and generating a healthy turnover of £12 million annually, the group was facing a persistent challenge – annual losses. These losses, totalling £0.5 million each year, threatened to escalate as operational costs continued to rise.
The Solution
The team at GJC Hospitality 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 crafted a refurbishment strategy that considered the hotel’s location, its product offering, and the competitive landscape. This ensured we could protect room revenue in the long term. By optimising the business structure, we streamlined operations and ensured the hotel’s financial viability. Our focus was on empowering staff to deliver exceptional customer service daily, fostering guest loyalty and increasing guest spend.
To spearhead the new strategy, we recruited and developed a high-performing senior management team. This team provided crucial support to the business owner and helped drive the strategic direction forward.
We conducted in-depth customer segmentation to develop a targeted marketing plan. The hotel’s brand was then overhauled to resonate with the identified customer segment. This included revamping brand guidelines, photography, overall look and feel, and brand voice. The new brand identity seamlessly translated into a new website, supported by a comprehensive digital strategy encompassing social media and content marketing.
To complement the brand refresh, we formulated a new food and beverage strategy that reflected the unique personality of each hotel. This strategy was very well received by guests. Additionally, we implemented new service standards and staff training programs. This ensured staff delivered experiences that aligned with the hotel’s brand identity, boosted team confidence in guest interaction, and ultimately, enhanced guest satisfaction.
We conducted a comprehensive procurement review across all sites, analyzing everything from food and beverage suppliers to OTAs, consumables, and housekeeping services. This review enabled us to develop new strategies to maximise operational efficiencies. Furthermore, we implemented measures to prevent off-season losses. These included flexible staffing schedules, payroll controls, group purchasing initiatives, and cross-training staff to ensure they could seamlessly work across different departments.
Results
Digital Transformation Boosts Bookings and Profitability:
Our new digital marketing strategy significantly improved the online user journey and strengthened our online presence. This resulted in a dramatic increase in web traffic, with a bounce rate 28% lower than the industry average (50%). Even better, we saw a 50% increase in direct online bookings, capturing market share from Online Travel Agencies (OTAs).
Enhanced Food & Beverage Proposition Drives Revenue:
We implemented a higher-quality food and beverage proposition, leading to profit margins exceeding 70% and increased profitability across the group. This also translated to a significant increase in guest spend per head, rising from £8 to £30. Additionally, an in-depth procurement review delivered savings of £100,000 per year.
Strategic Restructuring and Staff Development:
By restructuring the mid-management team, we achieved annual headcount savings of £500,000 while building a strong team to support departmental succession planning. To further enhance staff engagement and reduce employee churn, we implemented a robust training and development plan, ensuring we retain our skilled workforce.
Financial Highlights and Risk Mitigation:
Our successful plans facilitated a £5.8 million fundraising, with £4.5 million allocated for refurbishments and £1.3 million used to repay a CBILS loan. Proactive health and safety measures addressed a potential non-insurance issue at one of our sites, preventing a potential claim. This foresight proved invaluable when an unforeseen event later required a £1 million property insurance claim, with an additional revenue loss claim still under review.