Case Studies

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Bedfordshire Accommodation Development Project - 2003-04

BMR Consultants were retained in the autumn of 2003 to assist the Bedfordshire and Luton Tourism Officers Group in preparing research on the development of Accommodation in the County. Bedfordshire County comprises two District Councils - South Beds and Mid Beds, Bedford Borough and Luton Unitary Authority.

Our work covered:

Familiarisation and Document Review: meetings and discussions with Tourism Officers, "Locate In Beds" group, Planning Officers and review of documents provided;
Supply side Research and Analysis: UK trends of relevance, visits to key properties in the County, meetings and discussions with officers of County Tourism Associations and questionnaire survey of accommodation businesses in Bedfordshire;
Demand side Research and Analysis: UK trends, interviews with the Tourist Information Centres (TICs) and Luton Airport management and associated organisations, and despatch and analysis of 300 questionnaires to companies based in the County;
Analysis and Conclusions on Objectives and Key Issues: our analysis and conclusions phase concentrated on these key issues:

Is there business actually being lost to accommodation outside the County, for example Milton Keynes?
Is lack of accommodation in any way preventing the County from attracting businesses?
What are future demand trends and where is the County likely to fail to meet them?
What are the criteria for assessing options for development - least damage to existing businesses, lowest possible cost to the public purse, and speed of development?
What are the options for development? And do these need "pump priming" by the public authorities?

BMR's final report was presented in late January 2004 and the clients are bidding for funds in order to expedite the implementation of many of the recommended actions, for example:
Greater cohesion between different departments that deal with development of accommodation;
Onus on encouraging development of accommodation near to the M1 and in and around Luton;
Integrated promotion of the County's accommodation stock with other tourism services and with neighbouring counties;
More rigorous approach to encourage more accommodation properties to accept the Inspection and Grading of their properties.

The conclusions indicated some market failure and the need for gaps in accommodation in the County to be filled.

Our main client contact commented, "BLEDP, the main funders, are very happy with the report".

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Four Star Hotel in Northumberland - 1999 onwards

BMR Consultants have been assisting the owner of this four star country house hotel since 1999. Our role has been to supervise the operation and development of the hotel and associated facilities, which opened with 31 rooms and 27 holes of golf.

Since our involvement there have been many successes in performance terms:

Total sales have risen by over 30% and operating profit by 75%;
Many awards have been won: 2002 Silver award from the English Tourism Council, 2001 Small Hotel of the year in Pride of Northumbria awards, 2002 Small Hotel of the year in the Excellence in England awards, 2002 Two AA rosettes for Food and Beverage by the AA;
2002 accredited with Investors in People status.

The facilities have been constantly developed and the hotel is about to open an additional 22 rooms taking it to 53 rooms and the opening of a major spa complex in April 2004.

The key ingredients for success at the hotel with which BMR have been closely involved are as follows:

The property itself set in beautiful grounds has been restored and converted with good taste and high quality standards throughout.
The recruitment and development of like minded management and staff who share the owner's aspirations to make the hotel 'The Best'.
Sales and Marketing updated strategy with clear targets and objectives and sales actions. A dedicated sales manager with strong team to carry out the work.
A strong PR consultant working in close liaison with the owner and the management and staff of the hotel.
The on-going improvement to the golf course and grounds which has played a major role in placating an unhappy membership sharing hotel facilities, no clubhouse and temporary changing areas.
The setting, communication and monitoring of service standards to every member of the team.
The expansion of the financial information, daily, weekly, monthly. The involvement by Heads of Department in the setting of budgets, financial monthly reviews and reward through financial incentive for over and above budgeted gross operating profit. Timely financial information and three month rolling forecast.
A redesigned kitchen with equipment to deal with the extremes of wedding business, fine dining and brasserie style food.
An ambitious young chef keen to make his name in the industry and to put the hotel firmly on the map with regard to food standards.
Recognition of the need to support and identify weaker aspects of management and staff, and through training and development they have gained in confidence and job satisfaction.
The sense of pride that now prevails the team building, led by the owner and staff activities that take place on a regular basis.
The constant review of strategy with involvement by all concerned with strong emphasis on unique selling propositions and "SWOT" analysis.

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Advice on development and negotiation of Heads of Terms on lease agreement for a new build hotel project in Essex

BMR advised the owners of an office block in Essex on conversion of five floors into a four star hotel. The owners had been in discussion for some time with one of the major UK four star hotel groups who had presented them with a suggested Management Agreement.

Our work involved setting out the pros and cons of a management agreement versus a lease. It was then agreed with the client that the management agreement exposed them to far too much risk and was commercially biased to the hotel group. It was decided to offer the hotel group a lease deal instead.

The hotel group was not able to proceed with a lease and the owners decided to rebalance the property in favour of residential and other uses.

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Acquisition pre-feasibility and purchase negotiation assistance

BMR worked for a UK based leisure company to assess the value and future viability under new ownership of a large mixed-use resort in Southern Europe and to help it formulate an exit strategy.

BMR analysed the market for the property and then completed an extensive survey of the resort including meeting with the owner's representative and key general management.

BMR prepared an offer for the property, which was submitted to the vendors. In the event the parties could not reach an agreement on price and the purchase did not proceed.

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Negotiating the purchase of a Southern African resort

BMR's client here was a European private bank whose client wishes to buy a specific resort property. Our work comprised deal advice and structuring, resort feasibility analysis and valuation. As corporate finance and restructuring advice was required BMR brought in a major Accounting firm to work alongside it in this project.

Initial advice on the company law, accounting and financing aspects were dealt with in London. A joint BMR and accounting firm team then carried out a detailed survey of the property to establish:

Its potential value;
Capital expenditure needs;
Possible repositioning in the market.

The negotiations between the owner and our client's client are ongoing.

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Hotel with Leisure

BMR Consultants were appointed to help the owner of this hotel and leisure resort in the middle of 2003. It was running at a loss with very little financial or operational control as most of the operations had been outsourced.

BMR's first actions were to:

Address pricing - this had been overly aggressive leading to low volumes and poor recovery against fixed outsourcing costs;
Complete an operational audit;
Review all the outsourcing agreements;
Formulate and agree a plan of action with the owner.

This resulted in:

Bringing certain functions back in-house: general management, accounts production, sales, marketing and public relations and maintenance;
Appointment of key general management, financial, maintenance and marketing personnel;
Improvement in maintenance performance;
Renegotiation of the Personnel and Housekeeping outsource agreements in the businesses' favour;
Production of monthly accounts four days after month end as opposed to 28 days after month end;
Communication of budgets to all staff with regular planned follow-up meetings to check on performance.

The business is now operating profitably and has been given a vote of confidence by its bankers.

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