November 2022, Virtual
21 November 2022, Hilton London Metropole
Brian Williams is Managing Director of Swire Hotels, which has the Opposite House, Beijing, The Upper house and East Hong Kong, and this month launches a third brand – Chapter Hotels, with the Montpellier Chapter in Cheltenham, England, a 61-room property.
Tell us about Swire Hotels and your involvement.
Swire Properties has had a significant investment in hotels for quite some time, but about five years ago I approached Swire about doing some hotel investment in Europe. They weren’t particularly interested, but there were a number of hotels they were considering in Asia. The question posed to me was whether Swire could develop its own management expertise, or whether it had to continue to rely on third party operators, and of course that question came down to quality of management, quality of service and so on. So I joined five years ago with dual remit. The first was to see if we could identify business in Europe that would satisfy our investors’ returns and get us a foothold, and also in parallel I found myself working on one or two new properties in Asia.
And the Asian properties came on more quickly than Europe?
Well Beijing came on very quickly, yes. What became The Opposite House had to open by the Olympics in 2008 and so we had about 14 months to get it right. So we did that, and then The Upper House in Hong Kong was another opportunity, and then a 350-room business hotel – East in Hong Kong also.
Nevertheless, the European idea was still there. A the time, which was pre global financial crisis, I always wondered why when you go around Spain, Portugal, France, Austria, you go to secondary and tertiary cities and you find good, small, well run hotels, but in England, you don’t. There are a couple of brands that were doing alright, but it was hardly a saturated market. And many of the hotels you find in England are conference and convention hotels trying to become leisure at the weekend and failing on both fronts, and there are some good country house hotels right at the top end of the market. But in lovely towns and cities like Cambridge, Oxford, York and Cheltenham there was never a quality product. And I looked at the real estate, and once you get outside London it’s quite affordable.
So you bought Alias Hotels?
Yes, the Alias hotels were in good towns in good buildings and were good hotels, but clearly had a lack of capitalisation. I was impressed by the product. And they had good occupancy. A place like Cheltenham has a business market, a leisure market, government market, event market, and if you could up the quality of those hotels by clever design, procurement and execution, it wouldn’t be beyond the realms of possibility to take the average rates from £90 to £130 without pushing yourself into another stratosphere. We aren’t trying to be a country house hotel in the middle of town, which wouldn’t work, but we are trying something different. In another life I was at 42 The Calls in Leeds, and we did very well with that.
Lastly, if you look at the car parks of these hotels, they are full of Range Rovers and Mercedes. Are you telling me those people wouldn’t pay £35 more to stay somewhere if it was a really good product? I like seven-day cities with corporate during the week and leisure at the weekend. Malmaison and Hotel du Vin have done a good job in the regions and proved there’s a market out there.
So how are you different?
Our property is very British – the designers, architects, craftsmen, artisans, general manager, and even the local food in the restaurants. So we are championing really good British things. Our Cheltenham property was closed for two years in total and we had the time to get it right. In style we are comfortable and contemporary; not huge rooms, but large enough; a good restaurant, nothing too flash – we’re not star chasing, but a well executed restaurant; good service with friendly staff, unpretentious staff. Then we have little things like free wifi, a small spa, where you can get a facial or a massage. And we have put the pricing at the top end of the regional city market but not too high.
There doesn’t seem to be any crossover audience between these different hotel brands you’ve launched
No, that’s why it’s branded separately. Some areas of technology where we have brought that from Asia, we wrote the applications for that, so they are proprietary systems of our own.
There can’t be many examples where a company launches three brands of four hotels in different continents.
The question is: Can you as an independent compete at the same level as a branded hotel group? And that was the question clearly asked of me before we did it. But, if you ask anyone in Beijing or in Hong Kong, they would say we can. Why shouldn’t we be ambitious? I think we can do it and roll out these brands. It goes against prescribed wisdom, but it works.
Tell us about the other Chapter Hotels.
Well we have 61 rooms in the Montpellier Chapter, Cheltenham, another 60 in Exeter, which will open in March 2012, and in Bristol it will probably be around 90 rooms and will open sometime in 2013. We wanted to leave the biggest until last. The board have given us this investment sum and we have to show the return on the investment. We’re not backed by venture capital and no one is asking me for an exit strategy in 18 months time. We are property developers and hotel operators, and we have a longer term vision. But, fundamentally, we are financial investors and the question is are we going to get a return on the investment?
How did the economic situation affect your plans?
We deferred everything by about 12 months, which helped us with procurement in terms of construction. And in the meantime we had the success of the Asian properties that are performing out of their socks. The return on real estate is very good. And we have East in Beijing opening in March 2012. We are working on a number of other projects.
So when it’s a Swire Properties development, you’re not part of a beauty parade with other five-star operators?
Not really, no. Provided we make the business case it could be one of our brands, but it would depend on the opportunity.
Why not rebrand some of the hotels that Swire Properties own?
We’d have to be careful with that. There’s enough going on with these openings, for one thing, and I’d like to grow the House brand organically and stay true to our brand standards rather than try and squeeze someone else’s standards into it. I joined Mandarin Oriental when there were only five hotels, and so this process is familiar.
Would you consider management contracts then?
I think we should really stabilise our own income, get our systems working, building a few more hotels and then there’s no reason why in the future that couldn’t happen.
How will your market the Cheltenham property?
Through word of mouth, public relations and although we haven’t got a loyalty programme we will be offering Asia Miles to earn and burn at the hotel as well.
Will you expand the House brand in the UK?
Yes, in time, but no plans until these three are open, which will take us through until 2013. Locations are university and market towns, but not London – it’s low risk in London, but it’s also low return, unfortunately. Ultimately if we could team up with someone who wanted our brand then perhaps, but we have Cheltenham, Exeter and Bristol to launch first.