Catherine Chetwynd talks to Heiko Figge about Thistle and Guoman's strategy under the coalition government and the new economic climate.
BBT: Now that you are managing director of both Guoman and Thistle, does this suggest there will be a closer relationship between the two brands?
HF: They are not necessarily being brought closer together. There are synergies - back of house and procurement have always been combined. At the front, there is a clear distinction between the two and they need to operate separately.
Typically, Thistle hotels are in a great location, they are easy to do business with - the place you would want to stay when travelling on business. Guoman is all about a unique experience, like The Cumberland - cutting-edge design, fantastic F&B [food and beverage], provoking a response. We will have celebrity chefs in some properties, as we have got here [at The Cumberland], and will have a fantastic F&B operation at The Grosvenor.
BBT: The economic troubles that hit most hoteliers held up the full conversion to Guoman of both the Charing Cross property and The Grosvenor in Victoria. Is there a plan to complete these?
HF: We are doing the Buckingham Wing at the Charing Cross in August. Recession was not the reason for the delay - the building is overseen by English Heritage and it takes time to get planning permission. And we are going into The Grosvenor in August. We are spending just under £18 million on the 375 rooms, meeting rooms and a new F&B area. We are bringing in Ah Seng, one of the top three Asian chefs in the world, to run a Hong Kong Chinese restaurant, and we will open a new brasserie, too.
We are also looking at The Tower, evaluating what we can do, and we are starting to land on a design that will allow us to maximise space. But we are subject to so many planning authorities - not just the authority the hotel is in, but those it is visible from - and it is on a World Heritage site. We will not make a start until significantly after the Olympic year.
BBT: Having invested considerably in both brands, how will you keep the business?
HF: We have made a £70 million investment in the past 18 months to improve the Thistle brand in the UK. We have solicited extensive customer feedback online. We received 2,500 returns via our properties, so we have a fairly good idea of our service delivery, product quality and booking processes. Our customers said: "We like staying in your hotels because you are in the right location, but make it easier to do business with us."
We went through the whole process of booking meetings and event space. If you tell us, "this is our budget", we will work with you to deliver within your budget. We have looked at what customers want, and we deliver against that.
BBT: And what did your customers want of restaurants in Thistle hotels?
HF: Customers want an uncomplicated food offering. Their response was: "I am in the hotel because I have to be." A lot of them want to take off their jacket and tie. They want good but informal food - a great burger but not processed food. Thistle food is cooked well and allows guests to graze, to enjoy eating little bits of food.
In our Middlesbrough hotel, for example, the lounge area next to the restaurant was rocking, but the restaurant, which had AA rosettes, was quiet. People didn't want to try it because they wanted to relax while they eat and work. When we changed it to a good basic restaurant, numbers went through the roof.
BBT: After the opening of the Shanghai property, where are you looking to develop Guomans outside the UK?
HF: The UK is the key market. Guoman is in international gateways such as London; and Edinburgh, Glasgow, Manchester and Liverpool are all major cities that are right for Guoman. We are looking at location and opportunity - that could be individual properties or a collection of hotels. We will not just take properties in the existing portfolio and rebrand them, unless we can be confident they will perform well as part of the Guoman brand. In Asia, we are really talking about China. We are opening with 400 rooms in Shanghai and, in the next 12 months, also in Beijing, another conversion with partners.
BBT: How was the redesign and relaunch of Thistle received, with its greater emphasis on the location of the hotels?
HF: It was designed to remind our corporate customers and travel agents how good our locations are: in Newcastle, we are opposite the railway station; we are in Manchester city centre; and in Liverpool we are opposite the Liver Building. We are in the locations where you want to be - you don't need to get a taxi anywhere. Our customers have noticed that Thistle is changing - they have seen the investment we have put into properties and noticed we are much more responsive to what they want. And we are creating tools to make booking easier. We are establishing white-label sites for companies, with all their details and rates on. And when people talk about Guoman, we want them to say: "This is one to watch." Having got there, we must make sure they stay with us and create loyalty to the brand. That is what excites me about this business. I think we do have good loyalty, but we don't want to take that for granted. We have constantly to reinvent ourselves and when we stop doing that, we will lose [customers].
BBT: What impact will government spending cuts have on domestic business travel and on Thistle?
HF: We take a sizeable amount of government business into our hotels and we will identify ways of working with the government and add value to its stays in our properties. We are looking for dialogue with the appropriate people to demonstrate we understand what they are having to deal with. We can demonstrate how to save cost year-on-year, identify locations where it is less expensive for them to travel to, look at certain categories of room type, and help them meet their budgets. A significant part of government spend is external meetings, using hotel rooms. There are days of the week when there is less demand - Monday, Thursday and Friday - and they can achieve savings then. We are actively involved in these discussions.
BBT: How have you benefited from the weak pound/strong euro?
HF: The strength of the euro has helped offset some of the falling corporate business. Germany, Spain and Italy have brought huge [leisure] business and the availability has been there. The real question is what will happen because the euro is on the slide and the pound is getting stronger? The only positive I can see is that continental Europeans take breaks - holidays are very important and the desire to travel will continue, if with fewer and shorter trips.
We see encouraging signs for business travel, and meetings and events business. We have had some incredibly large enquiries at unbelievably short notice - there are signs that they had been planned, but put on hold until they became affordable.
- Heiko Figge was promoted from chief operating officer for Thistle Hotels to managing director of Guoman Hotels and Thistle Hotels in January this year. His remit includes developing the distinction between the brands as they continue to benefit from significant investment over the next two years. He has worked for the group for more than 10 years and has worked in the hotel industry for the past 25 years. He lives in Old Welwyn, Hertfordshire, and has "two beautiful daughters, aged 14 and 17". Given the demands of the industry and the job, he says: "One of our hobbies is spending time together."