Premier Inn boss Patrick Dempsey talks to Bob Papworth about the relentless rise of the budget hotel brand
FOR THE NON-SHOPPER, Westfield Stratford City must rank as the retail equivalent of hell on earth. Europe's largest urban shopping centre, built at a cost of £1.45 billion, it contains 70 restaurants, a 14-screen cinema, three hotels, a bowling alley, the UK's largest casino, and - wait for it - more than 300 shops.
Opened in mid-September last year, it also contains no shortage of heavily tattooed folk and candidates for Weightwatchers for whom, apparently, the conspicuous consumption of Big Macs and bejewelled mobile-phone socks represents something akin to purchasing nirvana.
Mercifully, however, it also contains a Premier Inn, an oasis of common sense and calm, where perfectly pleasant people, well-versed in the art of hospitality, ply their service industry skills with quiet efficiency. There's not a Croydon facelift in sight.
Back then, it was justifiably described as Whitbread's flagship property, about which Premier Inn managing director Patrick Dempsey was understandably chuffed to wax lyrical.
The phrase 'back then' is pertinent: Premier Inn is expanding at such a phenomenal rate that in the intervening three months, it is perfectly possible that other light-oak-and-purple oases have assumed the 'flagship' mantle, only to shrug it off a week or so later when the crescent-moon logo lights up above yet another new property.
Strengthening presence
At the time of writing, two more London Premiers have opened, along with units in Burton-on-Trent and Bradford. By the time these words appear in print, Loughborough and Dartford will have been added to the roster, and another six are due to open this January.
"I don't think we are anywhere near [saturation point]," Dempsey says. "Although we are already within 12 minutes' drive-time of 75 per cent of the UK population, there is still room for growth.
"For example, we definitely want to be the largest operator of budget hotels at airports. The deal we have done recently with Arora, which will give us [more] hotels at Heathrow, Gatwick and Stansted, is a step in that direction. And we would like a stronger presence in certain cities, like Edinburgh, Oxford and Cambridge."
The Premier Inn boss calculates that there are around 700,000 rooms - of all types - in the UK at present, with budget hotels accounting for around 120,000 rooms, almost half of which have come on stream in the past decade.
"In 2001 there were around 56,000 [budget] rooms, so the room-count hotels, and by 2016 we would like to have more than 100 hotels."
London calling
"I think there is an under-supply of accommodation in the capital - London at the moment is running at about 95 per cent occupancy," says Dempsey . "There's a lack of budget hotels, of good quality hotels, in London - they're just not there."
But adding an additional 20,000 rooms, 3,000 of them in London this year alone - where are all these people coming from?
Obviously, current economic uncertainties have persuaded many to downgrade from the higher echelons of the star ratings. But although Dempsey is careful not to criticise the opposition, he clearly believes Premier Inn is winning has roughly doubled. However, over the same period we have trebled in size to 46,000 rooms. We are going to add another 20,000 rooms, 11,000 of which have already been identified, and we are actively looking to place the other 9,000 in the next five years.
"I don't think that's saturation - I think we can go on to 2020 and continue to grow."
And although much has been made of Premier Inn's pre-Olympic Games expansion in London, Dempsey sees this summer's sporting extravaganza as just another step along the way, and focuses on life beyond the closing ceremony.
"We are going to add about 3,000 rooms. Pre-Stratford [the September opening], we had 6,127 rooms and 51 hotels within the M25; by end-2012, we will have 9,000-plus rooms and 72 business from rivals - primarily Travelodge, and then the vast swathe of independents and bed-and-breakfast options.
And the formula for success, he says, is a simple matter of quality. "Five or six years ago, when I joined, the company was then called Premier Travel Inn, and Travel Inn and Travelodge were pretty similar.
However, over the years we have developed our product - we have invested in our hotels to ensure they stay fresh, clean and comfortable. "One of my key things is making sure that our estate absolutely delivers, at all times. We have a rolling programme of investment - we are about to refurbish another 5,000 to 6,000 rooms over the next six months.
"Those hotels that don't invest in their asset - well, they are going to deliver a poor experience, and if a customer has a poor experience, they won't stay there again. Our competitor set is those people who don't invest in their properties." Note that word "customer".
Dempsey insists: "It's just semantics - I see them as guests when they are in our hotels, but when they are in the marketplace they are customers. Our task is go out and find new customers and turn them into guests. To me, all customers are potential guests."
Corporate conundrum
Famously, Premier Inn does not offer corporate discounts. "I don't see the point," says Dempsey. "We offer a quality product at a fair market price, and that's what you pay." However, it has created its Business Account, which does offer various services - if not reduced prices - that are useful to the corporate market, such as giving the ability to set credit limits on individual cards to control spending, and providing up to six weeks' interest-free credit. "That's largely about management information [MI]," says Dempsey.
"It's what we use to sign up our bigger accounts. The demand is there - our occupancy has continued to grow and we need to offer our business customers really good MI, to look after them when they are in the hotel, and give them a good night's sleep."
After a couple of hours being buffeted around the Westfield shopping hangar, that's an almost irresistible offer.
Patrick Dempsey
A former managing director of Forte Hotels UK and chief executive of the Compass Group's Restaurant Associates, Patrick Dempsey joined Whitbread in September 2004 from Macdonald Hotels, where he held the post of chief executive. Initially named as managing director of Premier Inn, Dempsey became managing director of Whitbread Hotels & Restaurants when the subsidiary was formed in February 2008.
In addition to Premier Inn, he is also responsible for the Beefeater, Brewers Fayre, Table Table and Taybarns restaurant brands.