“We want to be unique”
Village Hotels has invested more than £150 million in the development of their business under the leadership of Gary Davis, Chief Executive. Having spent the majority of his career with Planet Hollywood and Hard Rock Café, Gary brings a different perspective to the hotel industry. What does he believe is the potential of the business? Heather Gibson reports.
Village Hotels, part of the De Vere Group, is a mid-market brand with a customer base drawn as much from the local community as the typical corporate and leisure markets. With both leisure facilities and a branded food offer operating alongside the hotel’s accommodation and conference services, the business model was delivering three independently strong revenue streams at the time of Gary’s appointment nearly three years ago. Coinciding with the acquisition of De Vere by the Alternative Hotel Group, Chairman Richard Balfour-Lynn commented earlier this year that, “Securing multiple revenue streams and not being solely dependent on room income has always been a big part of the Group’s strategy, and this is particularly important in the downturn.” It is evident in meeting Gary that he shares this view and is convinced of the brand’s long-term viability.
“I saw big potential with Village and liked what AHG were saying in terms of its development: they were ambitious. When I was originally invited to look at the business, the truth is that it was seen as the workhorse of the old De Vere portfolio. “However, what stood out was the combination of the three separate operations. For example, the leisure clubs were as good as major players in the market. So while the brand was not very well defined, there was enormous scope. It created a different feeling inside the hotel to what you may experience elsewhere; there was always lots of hustle and bustle about the reception areas.”
Big ambitions…
Village has a stated ambition to increase its portfolio to 50 hotels over the next three years, becoming a national brand. The business currently has 22 hotels, including six built according to a new design blueprint which is at the heart of its transformation. There are two more new hotel openings planned this year, and discussions are underway on a further two projects.
“Village is not a City Centre brand given our requirements, including the 3.5 acre space required to accommodate car-parking space and swimming pool. Ideally we look for the outskirts of a city with good commuting routes. Previously Village was very much seen as a North-West operation, but we have expanded through the Midlands and further south, with possible new sites around the M25.”
Though focused on the immediate plans for UK development, Gary believes in the scalability of the business and international expansion is part of the long-term vision. Given his background, this should be no surprise. Both Hard Rock and Planet Hollywood were new concepts at the time Gary joined to expand their businesses from near start up to fully fledged enterprises.
“There is definitely a brand and product able to compete on an international level. I believe Village has the right elements for Northern European countries and also think it would work well in the US, the Middle East and India. Whilst there might be a question mark as to whether it would work everywhere, it is conceivable that we could adapt the operations to suit these markets. Once you bolt on a great food and leisure offering, there are many parts of the world where a business can work.”
Adding depth…
Creating a distinct value driven offer is essential. The focus has been to create a different strategy for each brand to maximise positioning, whilst remaining affordable. Pricing in all three parts of the business reflects the local market. The cost of a pint of beer, for example, is matched to a local pub not a hotel.
“My starting point was to ask: how can we create more depth to each element of the brand? The business plan was robust and each area contributes roughly 30% to total turnover. What we found was that, in improving and developing one part of the business model, the other parts responded favourably in terms of sales as well.”
In addition to upgrading the brand’s existing leisure facilities, significant investment has been made in the hotel and food offer. In Gary’s view a hotel should have the best quality of bed available regardless of star rating. New food and beverage brands were created to complete the plan - the Verve Grill, the Victory Pub & Kitchen and a coffee shop, typically a Starbucks.
“In F&B you have to work hard to make less money – but it’s an essential ingredient: good quality food at a good price. This makes it easier to sell a room or book a conference. We are compared to the local market, so you have to make an extra effort and keep the offer fresh.”
Gary spent a total of 12 years with Planet Hollywood during two separate periods.
He currently ‘commutes’ between Orlando and the UK, having moved Stateside during the course of his second stint, where he was International President for seven years. An intervening period as CEO of Kingdom Entertainment, a division of Prince Alwaleed’s hotel and leisure company, provided Gary with exposure to hotel operations through investments in Four Seasons and Fairmont. He spent five years as European Operations Director for Hard Rock, during which time the business grew from three to 50 locations worldwide.
“Richard Balfour-Lynn has big ambitions for the business and I liked what he was saying about the potential for Village. He is a very dynamic business man who has let me get on with the job.
“I like to get a brand full of life and energy. The opportunity with Village was a little bit different to what I had done previously and that was part of the attraction. This project bought with it the potential to grow a brand with a slightly different aspect.”
Throughout his career, Gary has been mentored by Robert Earl, the entrepreneur and visionary who founded both Hard Rock and Planet Hollywood. Robert famously recognised the power of celebrity endorsement to fuel his marketing strategies for both ventures, and Gary comments that this is an area where he has been particularly influential.
“Robert is extremely dynamic and quite a unique individual. I learnt a huge amount from him; how to get most out of people, how to drive a business to its maximum, the importance of marketing. Robert ignited peoples desire to come and see a product.
“I want to apply all of those influences with this brand. You can do a lot of hard work with a brand, but you have to market it and stimulate interest. There is no point just spending money on making the product better you have to tell people it’s good.”
Embedding this philosophy into the promotion of Village Hotels has been high on Gary’s agenda. During the England versus Germany football game last year, its branding displayed on the electronic feed throughout the stadium in Berlin. Village is also promoting Colleen Rooney charity designs for the Variety Club alongside other partners, whilst Dame Kelly Holmes will help promote the business’ Olympic mission.
“It’s not what you expect of a 22 chain hotel but for me that’s the point. I wanted to do something out of the ordinary which will get us noticed. Ultimately I believe the brand and the product is in a good position and we want to make people come and look at Village.”
Though he believes Village is seen more as a budget brand than a four star hotel, Gary believes the business can compete with both markets given the value offer that has an appeal to those wishing to trade up or down, particularly once a regular visitor becomes bought into the concept of getting everything you need under one roof.
“People have changed forever with the credit crunch. We are a morally sensible option because we are not seen as excessive. Village is not the cheapest but it is the best value. There is no one else in the market that competes with us and we believe we have a great opportunity to steal big market share. We want to be unique.”
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