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Why is investing in your hotel function space a good thing for business?

Functions and events bring a whole different dynamic and audience to your venue. Using hotel function space for wedding business, birthday and other milestone occasions are an accepted way for independent hotels to improve revenue.

But considering business audiences can truly turn your venue into a seven-day operation and give you countless opportunities to realise additional revenue and reduce your overheads.

Opening up hotel function space for mixed use.

One successful approach may be to make your venue available to business networking groups. There are several national organisations always looking for quality locations and localised groups looking for regular breakfast, lunch and evening hospitality.

  • It provides regular ‘off peak’ custom. Some operate on a weekly or fortnightly schedule and can host anywhere from 20 to 80 delegates.
  • It keeps the kitchen and staff busy. Imagine that additional business every week in one corner of your venue.
  • It keeps bringing new people to your venue. This sort of approach also encourages a passive audience to experience and become advocates for your venue locally.
  • It stimulates further business. Attendees can be encouraged to leave reviews and some of these businesses return and run meetings and events of their own.

This is just one example of maximising hotel function space. Investment to support this kind of customer may come in the form of meeting room presentation, projection, boosted WIFI and meeting materials such as white boards, drop down screens and audio-visual equipment.

What other local businesses or groups could you accommodate during the day to increase function room usage and what investment would you need to achieve it quickly? What types of milestone events are you missing out on because a lack of the right facilities?

Further reading:

Why the time is right to invest in your hospitality business.

A mixed use hotel fit out finance case study.

Why is investing in your hotel kitchen a good thing for your business?

Why investing in your bars and dining areas are good for your hotel business?

 

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Why investing in your bars and dining areas are good for your hotel business?

Naturally people will spend more time in your bars and dining areas – and therefore spend more money – if the décor, visual impact and ambiance encourage them to do so. So, how can you improve the ambiance and grow your hotel business at the same time?

Typical alternative investment solutions for bars and dining areas include

  • Theming – it is important to consider the right look and feel, something that fits with the overall character of your property or area of the hotel.
  • Décor – how you choose to bring the theme to life in terms of colour, paints and wallpapers.
  • Carpets and curtains – an essential part of the design of bars and dining areas that will be attractive to customers.
  • Lighting – significant in creating an ambiance. What light is required spot lights, full lights, wall lights and where does lighting need to be installed?
  • Audio visual including TVs and sound systems – TVs are probably desirable in certain locations in bars; sound systems with location variability can help set the mood at different times of the day, evenings and weekends.
  • Furniture – tables and chairs go without saying – but what about bar stools, high tables, sofas, coffee tables and other furniture that might work well in transforming space and making it more enticing.
  • Art and wall furniture – don’t forget to consider what goes on the walls. People pay attention and it could just add that finishing touch, creating an environment in which guests will choose to relax.

Think about target audiences. If you are going for a truly mixed use feel – proceed with caution. Be sensitive to where the money comes from. Positioning as a family Sunday lunch venue but looking to provide sports programming can create a conflict if not delicately managed. Create different areas creatively and efficiently.

 

Further reading:

Why the time is right to invest in your hospitality business.

Why investing in mixed-use is perfect for your hotel business.

A mixed use hotel fit out finance case study.

 

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Why is investing in your hotel kitchen a good thing for your business?

In previous posts, we’ve discussed how specific investments can have a significant impact within a hotel business.  The hotel kitchen is the engine room of most hospitality businesses. Equipment specification and investment decisions are based on drivers such as compliance, reliability, flexibility, economy and environmental.

For example, investing in a wok burner to stage regular and authentic Chinese and eastern cuisine nights requires specialist funding.

Typical alternative investment solutions include

  • Ovens – bringing equipment up to standard, improving power and energy efficiency or increasing output.
  • Extracting and ducting and greasing equipment to ensure a busy modern professional kitchen works efficiently and whilst conforming to local environmental guidelines and not upsetting neighbours
  • Refrigeration – again bringing up to standard, meeting power and energy efficiency standards or simply increasing output.

Utilities are typically the third or fourth biggest overhead in a hospitality business so investing in any efficient equipment can make quite a difference to your bill – and could be something to shout about from a green perspective too.

Don’t forget how you can put your hotel kitchen centre stage.

There is a trend towards open kitchens, where customers can see what is going on, with accessible serving areas. Investing in this area might help you to premium price or certainly to sell special positioned and therefore more desirable tables.

 

Further reading:

Why the time is right to invest in your hospitality business.

A mixed use hotel fit out finance case study.

 

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Why is investing in a mixed-use hotel business a sensible approach?

It’s likely you have some form of investment strategy when it comes to improving your business. However, before considering further or new investment, deciding on which areas to invest in and where to source funding, take a step back. A mixed-use hotel business is one of the best strategies to adopt.

The key to transforming the profitability of your hotel/restaurant business lies in thinking of ways to successfully use the space and the facilities on offer as optimally as possible.

If there are a wider number of uses for your hotel, it will be full more frequently which means it will be returning more revenue for continual re-investment and improvement.

Why is investing in a mixed-use hotel business a good thing?

  • You already have the infrastructure in place. It is being used and ready for increased use. The best way to increase revenue is to make better use of available assets.
  • A mixed-use hotel business allows you to build additional and quantifiable revenue streams.
  • A mixed-use hotel business helps owners and managers to access new and wider customer audiences. This might open up entirely new clusters at different times of day which may lead to repeat bookings, using facilities that might otherwise sit unused at certain times of day.
  • Optimising use of available space will directly impact on occupancy and revenue.

Impact on the kitchen

Firing up a kitchen costs £100s every day with the additional labour costs of having a chef not generating revenue if the dining room isn’t open until 6pm. As with other areas of the operation, if it is working harder it is making more from the facilities.

This may not necessarily be a direct contribution to the bottom line, but it certainly impacts overheads.

Impact on space and room bookings

Space is a valuable and expensive commodity in hotels and restaurant businesses. Empty, dormant rooms are a problem and need to be maximised. As a hotelier you are paying for a fair amount of space, either in rent or in energy costs, so consider transforming dead areas so they begin to make a return.

Whilst there are benefits to a marginal costing model on selling guest rooms and filling the hotel, discounted hotel rooms are less likely to deliver the type of guest with high discretionary spend.

Alternative finance looks at the sorts of things banks don’t always finance. They prefer the solid value of bricks and mortar. Specialist alternative finance providers will see the commercial value of business-critical assets, including fit-out.

Further reading:

Why the time is right to invest in your hospitality business.

A mixed use hotel fit out finance case study.

 

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Why the time is right to invest in your hospitality business.

The UK hospitality sector is worth £100 billion a year having grown at around 6% over the last five years.1 With over 200,000 businesses providing accommodation and food services in the UK, it is more important than ever to provide the best possible experience if you are running a hospitality business.

Investing to grow is a well-developed strategy in the hospitality space, an investment cycle now reduced to around three years.

But what to invest in… and how?

There are the obvious bricks and mortar investments that the banks will help you with.

But what about kitchen equipment, bar backs, bar and dining room furniture, lighting, room theming and artwork, extensions, fit out, leisure facilities and the less obvious things such as carpet, lighting (interior and exterior), curtains, blinds, soft furnishings, reception areas?

PwC also recently reported that 2018 has been a boom year for the hospitality sector. 

There has never been a better time to invest in your hospitality business. And the power of alternative funding models – puts business growth right in the palm of your hand.

1 https://www.thedrinksbusiness.com/2018/06/uk-hospitality-sector-could-be-worth-100-billion-by-the-end-of-2018-despite-closures-and-staff-shortages/

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Hotelympia 2018 exhibition review

Hotelympia 2018 exhibition review

As a first-time exhibitor and visitor, and as a relative novice to exhibitions, there was plenty to see and plenty to learn at Hotelympia 2018. This post explores what we saw and offers our view on the best stand experiences.

Hotelympia, which runs in London every two years and next appears in March 2020, welcomed over 750 exhibitors and thousands of visitors.

I will freely acknowledge that the Fit Out Finance stand won’t win any design awards, though fortunately our stand did its job as a meeting point for both suppliers and customers with an interest in funding.

Fit Out Finance at Hotelympia

Using my own criteria, I thought it would be interesting to evaluate my personal top 5 stands of the show.  This chart isn’t compiled based around glitz and budget but around the buzz, the passion of the stand holders and the products on display themselves.

In traditional reverse order, here they are:

 

NUMBER 5:  Food & Drink Wales

Food and Drink Wales at Hotelympia

With some bias, an interesting and diverse stand of Welsh food producers – from wine to cheese, from cured meats to salt. Foods could be tasted, there were lots of demonstrations, it was well branded at height making it very visible and they used big screens too.

And they had Welsh cakes, which must make them a winner.

 

NUMBER 4: Beverlecs

Beverlecs at Hotelympia

Hidden away at the back of the show was Beverlecs; a father and son business who have dedicated themselves to creating a single solution to many of the front of house issues facing hotel bars.

Exhibiting pre-launch this unassuming stand – with a solitary demo on display – was attracting attention from the right people, including key people in some major chains. Definitely a case of passion winning over budget! Lesson: Understand your niche and deliver specifically for it.

 

NUMBER 3:  Blue Ice Machines

Blue Ice Machines at Hotelympia

Again, nestled at the rear of the Professional Kitchens section, the positioning didn’t seem to adversely affect Blue Ice Machines who had a steady footfall of interested customers, many of whom made purchases on stand during the show.

The buzz was in no small part down to the enthusiasm and cheer of owner, Mindy Rubin who was pretty much constantly engaged in discussion with interested parties.

The stand budget was mostly spent on demo machines (and free ice cream) – which evidently had a magnetic effect.

 

NUMBER 2: KMS

KMS at Hotelympia

The buzz for KMS came mostly from the display of innovative technology including smart mirrors and digital coolers, all of which were displayed on a stand designed to take potential clients through the customer journey from arrival – EV chargers and external weatherproof digital displays –  to departure. Bright, colourful and technologically enticing.

 

KMS owner Emlyn Cole-Jones has built the business over 15 years and was on stand for much of the show. A recurring theme perhaps?

 

NUMBER 1: Rationale

Rational at Hotelympia

OK, so this clearly is a big-budget show stalwart, who splash out on pole position, staff and top-notch display equipment.

However, they use the budget well to create the biggest, most consistent buzz of the show.

The star of their own show has to be the man who I now know to be Alan Evans – part entertainer, part chef, part cooker salesman. Alan takes the selling of industrial cooking equipment to a whole new level! Add to that the fact that their food is superb, Rationale definitely have to take top spot on this chart!

 

And a word on competition

From a Fit Out Finance perspective, the only putative competitor, Grenke Leasing, was on the stand next to us. In reality though, they aren’t a true competitor, they are a principal lender whose focus is wholly on IT and tech, which constitutes a small percentage of what we do at Fit Out Finance. As is often the case, far from competing we shared insights and even possible enquiries over the four days.

 

Summary

We had a rewarding, if exhausting, time at Hotelympia, spending most of the four days of the show engaging with fellow exhibitors (who it transpires could be a lucrative route to market) as well as interested delegates.

We’ve come away with a much deeper knowledge of how the hotel sector works and will be even better placed to help ambitious independent hotel owners realise the hotel businesses of their dreams

Get in touch

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How investing in spa facilities can boost your hotel business

An up-to-date, well maintained and professionally marketed spa can enhance your hotel business in ways well beyond the direct income it can generate.

While many independent hotels are deliberating about investing in spas, a good number sit underutilised, often poorly maintained and poorly marketed.

The choice to upgrade existing facilities or to create a shiny new spa facility will often boil down to the availability of ready cash to fund the cost of creating it. Many operators like to wait until the cash is available – which in reality can mean missing out on an entire season or very lucrative promotional opportunity. The alternative is to judiciously use external funding to optimise the opportunity sooner rather than later.

How a spa increases customer satisfaction

Whether you charge or not, having a pleasant looking spa can boost hotel revenues in several ways including:

  • Creating a competitive advantage against other local hotels leading to increased bookings / occupancy (and reducing the temptation to discount)
  • Enhancing the overall guest experience, leading to positive feedback and reviews which are critical to online marketing
  • Keeping guests on site, therefore spending their money in your bar, restaurant etc. rather than somebody else’s
  • Referrals and recommendations. There is no better source of business than word of mouth from a satisfied customer
  • Purchases of spa-related accessories and consumables.

These benefits will materialise even if the spa is an included facility. Of course, it is entirely reasonable to charge for facilities which will provide a more visible and immediate cash benefit.

How a spa generates revenue in ‘quieter times’:

‘Wellness tourism’ is an acknowledged and growing trend in the leisure sector. As the name suggests, wellness tourists are taking breaks specifically for the benefits that a day in a spa can bring, as opposed to seeking it as a nice extra.

Remarkably, Wellness Tourists are estimated to spend upto 130% more than regular tourism. Coupled with an annual growth rate of almost 9% (50% more than regular tourism), it is a market well worth considering.

It may be too early a stage to make a full diversion into this lucrative sector, or indeed your scope for a spa may be a little limited to fully embrace it; however strategically marketing specific packages to wellness tourists can be a great way to optimise occupancy during traditionally quieter periods.

In turn, the clients attracted will become your recommenders and referrers.

 

How can I fund a spa?

Once you have decided that a spa facility will be financially beneficial to your hotel, the questions arise of when the investment should be made and how it can be funded.

If you are in the fortunate position to have sufficient cash reserves – with no other use earmarked – then you might well want to pay cash. Alternatively, you might prefer the traditional avenue of ‘saving up until you can afford it’.

However, using external funding can enable you to see the rewards of a lucrative spa facility sooner rather than later; ultimately the revenues it creates should far outweigh the cost of funding.

Our quick guide to deciding if the time is right

  • Track your enquiries. See if a spa facility is being requested.
  • Ask departing guests if a spa is something that would bring them back.
  • Monitor local competition for developments in this area. Check directly on competitor websites but also have a look at Groupon, Living Social and other discount sites for spa packages in your area.
  • Consider trying some out to evaluate the quality.
  • Investigate if there are upcoming landmark local events that might create an opportunity to fast-track an investment. Big sporting events bringing lots of travellers, as do conferences and exhibitions, wedding fairs and more.

 

Want to talk finance for hotel growth?

Please call Mark on 07932 075754 or email [email protected]

 

 

 

 

 

 

 

 

 

 

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Is your independent hotel maximising income as a wedding venue?

Increasingly, our clients in the independent hotel sector are seeking to position themselves as wedding venues; whether just for receptions and after-parties or for the full service including non-religious ceremonies, and both indoors and outdoors.

Reasons for chasing the wedding pound

Commercially speaking, it makes good sense to consider the wedding sector as a key market; the benefits to positioning as an attractive wedding venue include:

  • Significant deposits and advanced payments, which are the Holy Grail for cashflow
  • Strong likelihood of full accommodation booking around the wedding
  • Relatively straight forward catering from limited choice menus
  • Business that is virtually recession / rate / tourism proof
  • Consumers are increasingly comfortable with non-church weddings
  • A fantastic experience inevitably leads to potential repeat business and referrals.

Don’t forget the bride

Traditionally, it was the parents paying whilst the bride and groom are more than a little emotionally involved in the decision.  Whether this is the case, or in fact the couple are contributing or covering all costs, they are heavily involved in all aspects of the selection and planning for the big day.

It’s fair to assume that whilst the ‘bankers’ will be giving consideration to costs and more practical matters, the bride and groom will be predominantly thinking about the magic and splendour of the day. This is where a skilled and experienced wedding coordination team comes in.

Making the right investments

From the perspective of the ‘emotional customer’ impressions are everything and the investment made in creating those impressions will pay back many-fold. Creating the right environment and having the right facilities will make or break your ability to commercialise your hotel as a wedding venue.

That investment may take an inevitable physical form in function suites, A/V, lighting, bar and open areas, guestrooms, leisure facilities and more as well as lighting, furniture, temporary structures etc. It can also be more esoteric in creating a good online visual presence, a great library of past events even, in one case a full VR experience of the big day!

It’s all about the guests

The guests are unlikely to be involved in choosing the venue, nor in paying for the occasion. You could say all they have to do is enjoy themselves.

However, to the hotelier, the guest experience is probably the greatest added value to the occasion.

The guest will almost certainly be less critical or appraising of the event; they will base their judgement more on the facilities available beyond the wedding, particularly if they are staying.

If you get the guest experience right, they will reward you with positive online reviews, with referrals and repeat business and possible – the greatest accolade of all – by using you for their own special occasion.

The guests will be interested in the quality of the rooms, the additional facilities such as spas, pools etc and on the breakfast. Indeed, the guest experience will largely be based on the day after the wedding rather than the wedding itself.

 

Are you set up to capitalise on the lucrative wedding market? Are you looking at investment to take your hotel to the next level?

That’s what we do. We help independent hotels grow and prosper.

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Fit Out Finance to exhibit at Hotelympia

We are pleased to announce that Fit Out Finance has chosen to take a stand at Hotelympia, which takes place at ExCel London on 5th to 8th March. Our stand will be 2933 in the Hospitality Tech zone.

This follows on from our success exhibiting at the Independent Hotel Show last October – a show where we were able to speak in some detail with both hotel owners seeking funding for fit out projects, and suppliers of equipment and services relating to hotel fit outs. And where, curiously 30% of our leads came in the last hour of the show.

Happily our partners at WestWon have agreed to help with manning the stand with some of their own experienced and knowledgeable staff, which leaves Fit Out Finance MD Mark Jones free to meet with existing or potential clients and suppliers for a more leisurely one-to-one discussion over coffee away from the stand (We will even buy the coffee!).

Mark Jones comments ‘whilst our finance offering is applicable to most businesses who are fitting out premises, we are particularly committed to the hotel and leisure sector. In the last 2 years we have been able to assist a number of our hotel clients who are rightly proud of the attention they give to both the appearance and ongoing maintenance of their premises. By Using Fit Out Finance they have been able to instigate projects swiftly rather than waiting for the cash to come in. In the hotel sector procrastination really can cost money’.

Attendance at the show will also cement our position as the only finance brokerage who are entirely focussed on helping hotel owners to fund their fit out projects.

The Independent Hotel Show takes place at ExCel London from the 5th to 8th March. We aim to have someone on stand at all times to answer any general questions or propositions you may have.

For more detailed discussions, you are invited to book a one-to-one sit down with Mark Jones – pre booking is advisable if you are committed to attendance times. Please email [email protected], or use LiveChat on our website.

We are keen to share knowledge with any business involved in the hotel trade, whether as operator, owner, supplier or advisor.

We look forward to seeing you at the show.

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