EP Magazine

A better future from a position of strength

ANDREW COPPEL CBE, chairman and chief executive of De Vere Group, has sought to bring about a new approach to management since he took up the latter role in October. How does he want to reposition the company? HEATHER GIBSON reports

In one of the major leadership changes of 2011, Richard Balfour-Lynn stepped down as chief executive of the De Vere Group to focus on his other business interests, most notably that with MWB. As one of the most high-profile corporate entrepreneurs within the hospitality industry, Richard at times divided opinion among industry observers and his departure has been viewed with considerable interest as a ‘changing of the guard’ within this £360million turnover company. De Vere possesses many great assets, including properties like Cameron House on Loch Lomond and The Grand in Brighton. However, its financial position, including high debt levels, has been a talking point, recently leading to major restructuring in agreement with De Vere’s part-owner, Lloyds Banking Group, who agreed to convert £650million of the total debt into preferred ordinary shares. At the time this was reported as a measure of confidence in the company’s growth potential. However, it is arguably the change in leadership which has been the most significant indication of this confidence to date, and Andrew Coppel is well equipped to lead the charge.

Highly experienced and commercially astute, Andrew is a measured and reflective character. He does not like to use the word ‘I’, preferring to discuss the potential which exists within his entire team; creating De Vere’s executive board was the first major announcement following Andrew’s appointment as chief executive. He graduated in law from Queen’s University, Belfast before qualifying as a chartered accountant with PriceWaterhouseCoopers. In 1993 he joined Queens Moat Houses (QMH) as CEO and over the next 10 years led a major turnaround of the hotel company, which saw its debt reduce from £1.4 billion to £625million. He has since gone on to be chief executive of Jockey Club Racecourses and is the former chairman of Tourism Ireland and London Irish RFC. Prior to joining De Vere, Andrew was chairman and CEO of McCambridge Group.

When discussing the potential within De Vere, he draws a comparison to his time at QMH: “De Vere is similar to QMH in that there is a high level of debt at the top of the company. However, in sharp contrast QMH was a challenge from top to bottom, whereas De Vere is the real deal. We have four very strong business divisions. The company has great people and good assets, with sound revenue generating strategies and good cost control throughout.”

Andrew had been in post as chairman for 18 months when Richard and Jag Singh, chief financial officer, decided to leave in order to concentrate on their other interests. It has been a shift in leadership style, which Andrew believes has resulted in a different culture.

“The business needed to be managed in a different way and we set about creating an executive board, comprising seven strong experienced people, and improving communication and transparency. This has laid a management foundation. We are working to refresh our strategy, which is about to be presented to the board and the bank ready for launch in January. Lloyds Bank has been very supportive throughout this transition; they too have confidence in the business and our people.
“Our single focus is on improving the performance of each business area, and enhancing their value, and each division has great clarity around their accountability for achieving this goal. We are in a strong position as we have high quality assets and have placed great emphasis on customer service and value for money.”

De Vere comprises a hotels division of 11 properties at the four- to five star level, including seven with golf courses. The flagship is Cameron House, which has benefited from a £50million investment in recent years, with additional money due to be invested in properties at Mottram Hall, near Manchester, and The Grand in Brighton.

“We have well-located properties and know we can improve their performance. £300million was spent very well post the 2006 acquisition, and we know we can add more value there. Golf is an interesting element of our hotels division, and we formed the De Vere Club last year, which now has 9,000 members. This was in response to a decline in annual membership and opens up access to the group’s golf courses at an affordable price. It has been a real success and we aim to have about 15,000 members by this time next year.”

De Vere Lodges are located in four hotel locations and Andrew notes that there are opportunities at others, where lodges could be constructed to add value. This area of the business is currently looking at the feasibility of working on a joint venture basis in order to both maintain and develop the concept. De Vere Venues, acquired six years ago from Verve Venues, has 30 locations, all of which have benefited from nearly £150million of investment in their facilities during this time. Opportunities are increasingly being found in the leisure market at weekends as, with the exception of their central London venues, these facilities are residential conference and meeting sites.

Andrew notes: “A lot of money was spent postacquisition to very good effect, and customers in this market accept this. De Vere Venues benefits from long-standing and important relationships with major clients, such as BMW, PWC and leading banks, which provide the foundation of the business. BMW, for example, has a training centre at our Wokefield Park site and KPMG are based there as well. Wokefield alone has an annual turnover of £20million and across the business we are gaining new contracts on an almost weekly basis.

“In what is a difficult market, this business has performed well last year and this year and that reflects the quality of products geared to our customers’ needs.”

Village Hotels are De Vere’s community based hotel properties in non-city centre locations, all of which have leisure clubs attached averaging 2,000 members. Led by managing director Gary Davis, whose past experience includes Hard Rock Café and Planet Hollywood, food and beverage have been a clear focus since his appointment in 2007. Starbucks outlets have been recently added into each property, along with a new Italian food concept, which has more than doubled restaurant turnover in each converted restaurant. Dame Kelly Holmes is the division’s brand ambassador throughout the Olympic period this year, and Village is well positioned for De Vere’s broader customer proposition to deliver value for money.

De Vere’s current strategy is geared towards driving growth. As Andrew observes, “In many respects the strategy in each area of our business is different but there are common threads, namely our culture, both externally and internally; our drive for customer service; and our performance orientation with clear accountabilities. People are a critical part of this and in this respect the De Vere Academy epitomises what we are looking at in terms of developing skills.”

In recent times De Vere has become increasingly associated with the success of its Academy, led by Kellie Rixon who was recently appointed as group brand development director on the executive board. Andrew sees great potential in developing the positive brand differentials associated with the Academy and the concept has been a major success since its launch two years ago. Kellie presents a very positive and proactive approach as the figurehead behind the project, having genuinely sought to address the often repeated industry challenges relating to retention of people and the skills shortage.

The De Vere Academy is an employer-led apprenticeship training programme, which is aiming to train 10,000 young people over the next few years as part of its overall vision. Kellie comments:
“We had been part of the ongoing debate about skills in our industry and ultimately we decided that, rather than keep complaining, we should be accountable for trying to address the problem. The questions we started with were: how do we attract a new lifeblood into our sector and how do we ensure that people in the sector have the skills to cope?

“Critically, we believed that employer skills could only truly be delivered by employers. However, we needed a blend of educational input, workability and work readiness. It was clear from the outset that we wanted to establish an Academy on scale, hence the quite ambitious target. The concept was to set up Academies, located in our own properties and elsewhere, and then recruit young people from the local region, many of whom were typically classified as NEET (not in employment, education or training). Successful applicants would complete an apprenticeship programme that would get them work ready and manage expectations, supported by links to our partners in terms of placements.”

There are now 11 De Vere Academies throughout England, working in partnership with the National Apprenticeship Service, a remarkable achievement in such a short space of time. Given the problematic situation with regards to youth unemployment overall, it is noteworthy that between 40 and 50 percent of applicants come from challenging social backgrounds. Achievement rates are an average of 81 percent across all Academies, and progression into full-time employment averages around 72 percent. Five more Academies are due to open next year, and five more after that. Current partners include: John Lewis, Debenhams, Hilton, Crowne Plaza and Wagamama.

Kellie’s recent promotion to the executive board underscores her achievements and helps to boost the company’s perception. Andrew observes:
“It is interesting that the Academy, not intentionally, promotes the De Vere brand very effectively. Clearly the focus is on working with young people, but because of its recognition, the Academy is one of the best known De Vere brands alongside our Venues division.”

Looking ahead, Andrew is confident about the company’s potential to achieve its objectives of adding value and growth through the varying strengths in each area of the De Vere organisation. However, he is not sanguine.

“There are winners and losers in every cycle and my message is that we will be winners in this particular cycle, not only due to our investment in the portfolio, our great people and customer service; it will be a combination of all of these factors and more. What it all leads to is value for money and that is what the customer wants, whether it’s business or leisure. Ultimately we want to generate higher levels of customer loyalty.
“It will be tough next year and potentially the year after that, but the trick is to emphasise the quality of the products we have and this has to be done on a local basis. The market is not stagnant, it’s falling, and our business is working to capture market share.

“Yes we have to build a better De Vere, not because we are in any way broken, but because we have to do better to be the number one in our marketplace. Simplicity is key. It is a real challenge to generate sales in this climate, but you can only do it locally.”