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are generally pragmatic and professional when it comes to sorting out an issue, but they don’t respond well to threats or the suggestion of litigation – if an owner goes down that route, they become very defensive.


Are we reaching hotel brand overload? I don’t think we are yet at the point where the market is saturated, but we may see some of the weaker brands being swallowed up by the larger ones. What we are seeing more of is the growth of the brands that enable hotels to retain their own identity, but to also enjoy the benefits of working with the big hotel companies.


Five Lakes


“The first thing I was taught, but is so often forgotten, is that the most important thing in a marketing message is the headline”


How do you help hotels select the right brand? It is important to consider how a brand can add value to an existing property. The com- mercial terms of a brand agreement need to be sensible and give a good return. Will the distribution of the brand bring more business to the hotel? Is the cost of meeting the brand standards going to be too high? For instance, some brands require all hotels over four storeys to install sprinkler systems.


management, which at the time was not particularly well respected as a business. I had learned influencing skills from being


chairman of VisitEngland and as a director of VisitBritain. In those roles, you work closely with government but you have no control – you just have influence in making things happen. Those three angles to my career – marketing, operations and investment – mean I have a good perspective across the sector, which helps in my role.


How would you describe the position of Michels & Taylor within the hotel sector? We are very much at the centre of the industry, as we work with investors, banks, brokers, brand companies and management compa- nies to drive value.


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How are brand terms drawn up? Every deal is different. The basic contract is likely to include an incentive fee dependent on the level of business. There will be a capital reserve provided by the owner for fixtures, fittings and equipment (FFE). This usually equates to around 4%-5% of turnover and is in the brand’s control. I like to reduce FFE to as low a level as possible, to allow the owner to control the investment reserve rather than the brand. Some brands also provide key money up-front to help with the conversion costs. Then there are performance tests, which can be a problem if the hotel does badly. If it appears that it is impossible for the two parties to work together, we will provide a solution. It can be very costly and difficult to get out of a contractual agreement, as it is very unusual for a brand agreement to end early. The brands


You started in the hotel industry as a marketer. Has the practice of hotel marketing changed with the advent of a digital platform? I believe the principles of marketing have remained the same. The first thing I was taught, but is so often forgotten, is that the most important thing in a marketing message is the headline. So much marketing material fails to carry a headline.


What are the key principles of sales? Sales should come from four directions. The first is conversion of direct enquiries. On average, the industry converts only 32% of direct enquires to a confirmed booking. Why is that not higher? Second is bringing back old business – the customers who you know and who were happy at your hotel. This is often the best chance of getting business, but many hotels don’t have a system in place to capture it. Third is new business from existing clients.


For instance, if IBM uses a hotel close to its Milton Keynes office, there is the opportunity for a sister hotel near IBM’s Swindon office to capture that business. Finally, it’s going out and getting new customers. Too many hotels concentrate on this area when the other three options are more likely to achieve positive results.


After Sir David Michels’ announcement of a £200m fund to acquire hotels, which will be managed by Michels & Taylor, how are these plans progressing? We have been actively looking at a number of hotel opportunities – probably around 35 properties in total – and now have active bids on a number of them. We will be ready to take over their operations once the bids are accepted.


How do you regard the legacy of your father, Derek Taylor, who was a leading specialist in hotel marketing? Dad has often been described as the best sales- man in the business. One of his claims to fame is that he was the pioneer of short-break holi- days. He was a very direct businessman – he said things others would have said differently. And, annoyingly for me, he was always right. For many years I was described as Derek


Taylor’s son, but I think I have now become my own person. But I’m very proud to be my father’s son.


31 July 2015 | The Caterer | 27


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