As managing director of Exclusive Hotels and Venues, a family-run, independent group of country house properties situated across the south of the UK, Danny Pecorelli has a clear understanding of UK's transient, leisure business—and how shifts in the economy and political climate have an impact on the local hotel industry.
Pecorelli will deliver an opening keynote at the upcoming Annual Hotel Conference, October 12-13, at the Hilton Hotel in Deansgate, Manchester, centered on "Performing in Transient Times." In it, he will share how his hotel group has remained ahead of the game by anticipating and responding to changing market conditions with innovation and conviction.
Ahead of the conference, we asked Pecorelli 11 questions on his business, how to successfully operate F&B, the state of UK's hospitality industry and its future.
1. Exclusive Hotels and Venues is a diverse collection of stately, manor-like properties. What are the challenges of operating a mix of independent hotels? Conversely, what are the opportunities that exist?
Pecorelli: The Hotels and Venues aren’t as diverse as they seem, they may be completely individual but they all appeal to the same target market. For hotels its upscale leisure, the MICE market and celebratory events, particularly weddings. For the two venues it’s the MICE market, weddings and local corporate, with the added benefit of the venues operating in the MICE market at a slightly different price point to the hotels. So our share of corporate pie increases when we get a request for different budgets, as we have two different products that can accommodate different budgets.
2. How is operating a collection of independent hotels different from operating branded hotels?
Pecorelli: We work quite hard to actually establish a brand, but having said that we are a little bit anti-brand in the way we present ourselves, and we try to tap into people wanting really personalized experiences. We compete against the homogeneous brands, where everything is identikit. Our particular customer base wants consistency of service offering and product, but in unique environments with a personalized service offering.
3. What does working for one ownership group allow that working for disparate owners does not?
Pecorelli: Working for a family business as opposed to disparate owners gives us two core advantages. One is we can take an exceptionally long-term view, which has enabled us to demonstrate steady growth without some of the short-term pressures that sometimes get exerted in other environments. At the same time, it allows us to make decisions exceptionally quick if needed without the bureaucracy of the big machine. The big don’t eat the small, the fast eat the slow!
4. F&B has become such an integral part of a guest experience. What are your tips for operating a successful F&B business?
Pecorelli: The key for hoteliers operating food and beverage is always to treat it as a separate business and to think like a restaurateur. The product life cycle of restaurants as a general rule runs shorter than hotels, which means you have to keep refreshing your offering more regularly than a hotel offering and consumer trends evolve at a faster rate. I’m not saying you have to jump on every consumer trend, but you have got to keep an eye on it to tweak your offerings to stay ahead of the curve. Also the margins are much finer within food and beverage, so even more attention has to be paid to the fine details to ensure they contribute profitably in their own right. As we have a number of destination restaurants, getting a high profile high, particularly around TV, [is important] as are high scores in "The Good Food Guide", Michelin, The AA, etc.
5. Distribution and marketing are vital to ensuring your hotels are full. Without the power of a big global brand behind you, how do you achieve this?
Pecorelli: Be it a small operator or a large operator, distribution and marketing is just a case of really understanding every channel. There are so many nowadays and they vary so much by market segment, so understanding every channel and every driver of the business and then working out which ponds you want to fish in and which tools you need to use to do the job [is vital]. Having said all of that, its pretty old fashioned, but if you offer a really good product, focus on operational skill, i.e. deliver great service, then your repeat is really high, be it in leisure or the MICE market. If this is done properly, it can actually drive your marketing spend down. It’s as true today as it’s always been: If someone has a fantastic hotel experience, they will tell their friends about it.
6. You are known as an hands-on leader, but as managing director you can’t always be on the floor, so to speak, with front-line employees. How, then, do you balance the two?
Pecorelli: It's absolutely vital in our business to be able to carve out time for strategy, as ultimately that drives the success of the business. You also need to spend time walking the four corners, talking with guests, talking with staff, looking out and listening properly to feedback—from both staff and guests. Then sifting through the information to make those right strategic calls, but also with the detail 100 x 1 percent makes 100 percent, so the detail feeds through to one of our core strategies just to be good old fashioned great operators.
7. How do you describe your leadership style?
Pecorelli: It’s always dangerous to describe your own style! I would hope on the combination of approachable, friendly, lead by example, but at the same time you have got to be focused on the end result, and on it 100 percent of the time. I’m not sure everyone who works for me would agree with all of the above.
8. What is the opportunity for the Exclusive Hotels and Venues collection moving forward? Are you looking to add new properties and venues?
Pecorelli: We are pretty conservative in terms of taking on too much debt because we have to be sure we can make an operating profit out of any acquisition. Put it this way: We walk away from more than we go for, and if you look back we have got six hotels in 30 years, so we tend to average one acquisition every five years. Having said that, when we consider the market to be frothy, we look to organically expand at the existing properties, so our aim is to expand the number of rooms and wait for another recession before we look to expand organically and add a number of rooms. We will wait for another recession for the next opportunity of an extra property.
9. Has your business changed at all subsequent to the Brexit?
Pecorelli: It’s just another challenge that gets thrown at you in any business, and we have to react quicker and better than the competitive set. On a personal note, I was hugely disappointed with the result, particularly with how it made some very loyal talented members of my team feel.
10. What should the investment community know or take away from the success of a collection like Exclusive Hotels and Venues?
Pecorelli: There’s value to being good operators.
11. What is the importance of a conference like AHC? Why do you come and what do you get out of it?
You never stop learning so conferences like this always stimulate some idea or actions.
The Annual Hotel Conference is October 12-13, at the Hilton Hotel in Deansgate, Manchester. To learn more about the conference and to register, click HERE.