Background
Back in September 2017 the company acquired the Hilton Green Park, it remained under the Hilton brand for another year until the decision was made to reposition it under a new name: The Mayfair Townhouse.
The hotel then underwent a full refurbishment, reopening in December 2020. Three years later, the hotel has seen an increase in revenues, nearly double its ADR and a substantial increase in profitability from before the rebranding.
Hospitality Investor: Andrew, thanks for joining us. You've just won the HAMA Award. Can you tell us a little bit about the company on the project?
Andrew Stembridge: The award was for the Mayfair Townhouse. And we're thrilled to win the award it's great. It's our first asset management award. Mayfair Townhouse is part of Iconic Luxury Hotels. Iconic Luxury Hotels is an eclectic collection of predominantly UK based hotels. At the moment, we have Cliveden House, which is probably one the world's most famous stately homes, Chewton Glen in the New Forest, which is, again probably the country's first country house, the Lygon Arms in the Cotswolds. We've got two properties in London, 11 Cadogan Gardens and the Chelsea Townhouse. We run them as management contracts for the Cadogan Estate, and then the Mayfair Townhouse itself, which is obviously the case study today. And then we've actually got two international properties joining a portfolio this year, the Excelsior in Venice. And then later this year, we're gonna open the Palm Beach, the Palm House Hotel, which is in Palm Beach, Miami. So exciting times for us.
Hospitality Investor: You're part of L+R is that correct?
Andrew Stembridge: We're part of L+R. L+R is obviously a family owned management investment company. They've got over 115 Hotels now. And 23,000 hotel beds in the UK, the US, the Europe and the Caribbean.
Hospitality Investor: And the HAMA Award, we know it's very challenging to win, can you tell us a bit about his project, and maybe why you think you have the edge on the others in the competition?
Andrew Stembridge: Yeah, I think the essence for us on the award was actually, you know, we bought the building in 2017. Our owners bought it, the incumbent brand at the time was Hilton. And I suppose the award is really about us taking a brand out us creating a new brand, maximizing the use of the space creatively. Really doing a bit of market research to understand where there was a gap in the market and then launching a new product with a new brand into a market ... we hit a gap in the market for that and, and the numbers speak for themselves. So that's the essence of why we won.
Hospitality Investor: And what is that gap in the market you're targeting with the brand move away from Hilton. What are you looking for?
Andrew Stembridge: Well, I think, for us, we worked out specifically in Mayfair, which is obviously a destination in London, in its own right? You know, you've got the big grand dames of Park Lane and the like, then there's a number of corporates, but they tend to be very traditional corporates, very predictable. And then the independents in that part of town, again, they're all just a little bit dated, maybe a bit under invested, and we felt there was an opportunity to create a new lifestyle brand, which was probably, a high price point but good value. But it attracted the sort of the independent traveller the more sort of individually thinking, independent traveller who were just looking for something a little bit different, something where they didn't want to pay for the sort of the unnecessary frills. So we focused on what we call Brilliant Basics. So we made sure that we invested really highly in the, in the bathrooms we knew that was a real area of interest. And so we went for a really, really high finish, the tiling the bathroom amenities, the beds, the linens, they're all absolutely five-star luxury, and really good tech in the rooms too.
Hospitality Investor: Certain things people don't compromise on.
Andrew Stembridge: And then we added value. We included the minibars, but we filled the mini bars with really good, nice artisan British products, which are all included. So you get everything you really want when you're staying in a hotel, but you're not paying for the unnecessary services or products which maybe some of the larger hotels offer. That's why we came up the name Mayfair Townhouse, it was underlining that value proposition and people understanding that what they were getting wasn't a ... I was about to say full service hotel, it is a full service hotel, but we don't have a spa. We don't actually have a restaurant per se. So they're not paying for that but we do have a really good concierge and the whole essence of it is a really good team. The doorman are the probably the friendliest in the whole of London.
Hospitality Investor: That's really interesting what you said about the restaurant because if you are reimagining a hotel now with all the challenges with F&B. A lot of hotels probably don't need massive restaurants because they are massive cost I guess that was part of your thinking if you're sensible and, and clever about how you how you run it, you can make luxuries elsewhere and cut them in other places and the experiences is better?
Andrew Stembridge: It's interesting if you go back to 2018 or pre 2018, when we bought it, we're actually generating an extra £300,000 worth of f&b profit than our predecessors were. But that's on a much smaller base. I mean, we inherited restaurants and banqueting. And so by actually shrinking it down, and just saying, Look, we'll do a really good breakfast, obviously, do room service, we've still got a good chef, so you can have great food, anywhere in the building. But it's very limited to really what you want when you're traveling. And then we were major on the fact that there's 200 restaurants in Mayfair. And we actually encourage people to go out. So why wouldn't you why, why try and compete with this sort of array of fantastic restaurants on our doorstep when we don't need to. But yeah, if people can't be bothered, then maybe they're on business and they're tired, then we can rustle them up a great meal too.
Hospitality Investor: It's about being clever. I guess Mayfair you're in the middle of London, very historic, it's gonna be a challenge to do anything, develop it. Can you talk a bit about how you reimagine the hotel, any kind of development or construction work you did, and how you managed to get that done in the time period?
Andrew Stembridge: The hotel is on Half Moon Street and actually, it occupies 15 houses. So it's 15, Georgian houses, seven of them are Grade-two listed. So we couldn't do anything to the exterior of the building other than just clean it up and, and give it a fresh lick of paint. Inside though, we were able to go much deeper in terms of intervention. So, you know, we stripped it back to bare boards and bare brick. We didn't really reconfigure too much of the bedrooms, but we managed to create 10 extra keys. We took the room count from 162, up to 172. And that was in areas that were previously public area spaces on the ground floor. On the ground floor, we limited it to bedrooms, quite an intimate lobby. We created thisfeeling of a boutique hotel, and then a really cool cocktail bar called the Dandy Bar. Then downstairs, we've got, again, a couple of subterranean spaces where we serve breakfast, after breakfast, then they turn into co-working spaces. And then in the evening, they can become a space for a cocktail events.
Hospitality Investor: You've got to have multifunctional space in hotels. So you can't just be one thing or else it just lays empty.
Andrew Stembridge: But the main thing is we don't have a restaurant and we don't have true banqueting. If it makes revenue for us, it's a bonus. But generally, it's actually there and our guests staying love the fact that they can use it without that almost pressure to be spending, spending, spending all the time. So that you know, so that was really key, but actually majoring on the Mayfair name was really important to us. Because obviously, if you imagine we were entering the market with you know, we didn't have a big international brand behind us. We chose not to work with any of the sort of global consortia. And so actually, we were doing it alone. So that's why having sort of decided it was gonna be a townhouse, we thought, well, let's actually let's major on the Mayfair name, because that will actually help drive organic search, especially for the American business where they're actually they're looking for a specific neighbourhood in London when they when they search. And that's, that's helped enormously to and then the last thing was on the brand, actually we introduced the little fox motif, which again, that that sort of brought in the personality to the brand, which again, to make sure it really differentiated us against the corporates, it was really important that we did that.
Hospitality Investor: I was gonna say picking up on obviously, you took a Hilton name off there, you repositioned the hotel, COVID happened. I mean, were you nervous when you reopened it? Did you know it was going to be so successful when you opened it, were you nervous at all?
Andrew Stembridge: Our projections said we would be successful. But clearly, that's what you do with projections. Otherwise, we wouldn't have done it. You know, we did our analysis, we compared it about what we thought it would be if we retained the brand. And what we would do without it. I mean, obviously the key thing for us is we managed to save £700,000 pounds worth of management fees by taking the brand out which you know, that drops directly to the bottom line, which is great. And then by shifting the model from traditional hotel to townhouse, suddenly our GOP dial changes because obviously our cost base changes.
The lion's share of our revenue is coming from rooms, which changes the profitability. So we thought we would be, I must admit, we had a couple of sort of squeaky bum moments where were you know, very good friends of mine who are serial London operators said to me Andrew, you'll never do it. There's no way there's no way you can launch a such a big property in the heart of Mayfair without a brand or any of usual affiliations. And there were a couple of times where we did sort of stick our head over the parapet we thought, well, maybe we should ... we looked at a couple of the consortia, but actually as it was that they weren't an option for us, because they were sort of overpopulated in that part of town anyway.
And then we thought, no, no, no, we can let's try it. And I think for us it you know, so much of it was about creating a clever brand, making sure, as I said before, that sort of link to Mayfair. But then making sure that what we the actual product was a little bit different. It did stand out we knew that from the market research we've done and then we sort of capitalized on this we had this really short window, where we actually opened on the first of December 2020. UK Government shut hotels 14 days later. But in that first 14 days, we managed to get enough really good press through the door, that we launched and we had all sorts of ... Conde Nast awards, Sunday Times awards, Travel & Leisure awards, and press. So in 2021, we had 2.4 billion media impressions on the back of it. The second we opened, we actually had this pent up demand already. So it was great.
The transcript has been lightly edited for clarity
By Patrick Whyte
