ENNIS, Ireland—A global recession isn’t necessarily an ideal time to start a hotel company, but the directors behind Great National Hotels & Resorts saw an opportunity that has blossomed into a portfolio of 50 hotels and plans to reach 200 properties by the end of 2018.
David Collins, co-owner and COO of Great National, said his company took its first booking in January 2010.
“At that time, we were knee deep in the recession,” he said. “I guess you could say we were caught in a perfect storm: unemployment, reduced consumer spending, inbound tourism was reduced almost exponentially.”
Irish hotels faced some real challenges, Collins said. Occupancy in the country was at 66% in 2007, but it fell to 55% by 2010. Revenue per available room fell from €57 ($64.84) to €39 ($44.36) in the same timespan. Traditional marketing wasn’t working as everything was moving online and to mobile, he said, and the online travel agencies were growing stronger. There were too many hotels and the demand that was left was spread across the existing hotels, he said, so revenue was in a downward spiral as the hotels entered into a pricing competition.
“Hotels were hurting,” Collins said. “The challenge for us was to stop that slide, to stabilize the business and make sure hotels could reasonably plan their business and bring a little growth back to the table … That’s something we’re very proud of. We enabled owners to work through a difficult time in Ireland’s history.”
Building a foundation
When Great National started, it had no hotels, no brands and no clients.
“What we did have was a blank sheet of paper on which we could build the company from the group up,” Collins said. “We had no baggage. We could grow and grow very, very quickly.”
The guiding principal for the directors was to make a tangible, sustainable difference for their clients, he said. The business is wholly owned by its four principal shareholders, and any growth has largely been funded through retained earnings. “Sweat equity” helped put the company in the strong position it is in now, he said.
“We grew to one, which quickly led to two, and we grew to four then,” Collins said. “We began to develop reputations amongst hoteliers. We ran into some who didn’t want to work with us, but more often than not, we were making differences for hotels. We were adding certainty and reducing the slide in value in the industry.”
During the recession, developers brought in international brands to Ireland at the instance of the large banks, Collins said. While putting a brand name over the door was good for bringing in the inbound business, there wasn’t as much domestic demand for them, he said. Great National began as a soft brand by offering its name as an umbrella for existing independent properties. Since then, the company has grown to manage, own and lease its own properties.
The company offers a range of services to the hotels in its soft brand, Collins said, including signage, standards, distribution and reservation systems and more. The soft brand option gives the independent properties an alternative to the “onerous aspects” of long-term branding.
“We are gradually morphing into a bona fide hotel group, a hotel and resorts group, providing representation in planned services and arrange asset management as well,” he said.
Great National has 50 hotels in its portfolio, Collins said, which are split evenly between the United Kingdom and Ireland with another two potential acquisitions in Ireland in the next three months. The portfolio ranges from midscale to upper midscale. The company has €50 million ($56.9 million) worth of assets under management, he said. The plan is to grow the company through the end of 2018 to reach 200 hotels.
“That’s significant growth,” he said. “We believe it’s entirely attainable. Our targets for this particular year of 2016 are on schedule. We hope to have 100 by the end of this year, principally from growth from the U.K.”
On top of that, Great National will launch a new budget boutique brand, Great Nite Inn, this year, Collins said. There are four properties earmarked for conversion to the brand along with two franchise agreements, meaning six will be in operation in Ireland by the end of this year.
“We’d like to see an accelerated rollout of that brand in 2017,” he said.
Adapting to guests’ needs
Consumers have become increasingly demanding on the experiences they have with brands, Collins said. They want their stays more personalized, which forces hotels to micro-engage with guests.
Attracting their business requires different methods than before, he said. While ads in national newspapers, on the radio and online campaigns might have been somewhat effective 18 months ago, they’re less effective now. Consumers have changed the platforms from PCs to mobile phones and they’re particularly sensitive to their digi-social space becoming cramped and invaded.
“They’re deciding the rules in which brands will engage with them, instead of the other way around,” he said.
On a practical level, that means hoteliers must have a good handle on customer data and how that data is used, Collins said, such as finding trends within that data and how to relate to clients at a precise moment of need.
The process of ad buying is becoming automated, which Collins said is a good thing, since an automated system can comprehend and compile coherent strategy in a way human minds can’t and transfer it across markets.
“When I look at recruitment going forward, it will be more for mathematicians than for marketing,” he said. “It’s less with advertising, more with analytical skill and data analytical skills.”