Mention the phrase “economic slowdown” and the hotel industry usually goes into hibernation. So it is a pleasant surprise, as we come to the end of one year of slowdown and enter a new year that is only stuttering to recovery, that at the top end of the Yorkshire market, hoteliers seem remarkably active. Over the past few months we have seen the opening of one major hotel in York, and the reopening of another in Leeds, while next year we might finally get to see the completion of two projects further afield whose gestation has taken many years. Such activity may be because the situation is not as dire as you might think.
Research across the whole sector by accountancy firm Deloitte suggests that in the first nine months of 2010 revenue per room (RevPAR), a key measure of success, held steady throughout the region, and in some cases even improved.
“It’s a pleasing result as average room rates are now reporting growth after seven consecutive quarters of decline,” says Martin Jenkins, hospitality partner in Deloitte’s Leeds office. While there have been some notable business collapses – the Marmadukes and Guy Fawkes hotels in York, and Quebecs in Leeds – both businesses have been snapped up again relatively quickly. Only the Tomahawk group, a chain of three hotels in Bradford, Sheffield and Leeds that went under in September, was still being operated by its administrator as we went to press. A couple of months before that hotel went under, however, its general manager Stuart Ward moved over to take charge of the reopening of a Leeds hotel that was probably the sector’s most spectacular collapse of recent years; the Ellington Hotel in York Place, now christened the New Ellington.
The hotel, named in honour of Duke Ellington’s appearance at a Leeds jazz festival in 1958, opened in 2008 promising five-star service and a restaurant with a menu that had been supervised by none other than Albert Roux. But within a couple of months it had closed down. So rapid was the close, in fact, that the staff departed, leaving everything behind them.
For many weeks the furnishing and fixtures were still clearly intact and visible through the discreet front windows. The hotel is now being operated by Bespoke Hotels. It’s a relatively new venture for the operator, most of whose existing operation consists of more country house-style hotels. But Ward, who has 20 years’ experience in the Leeds hotel market behind him, says he is much more confident about the new operators. As the furniture was already in situ, he says, they have only gone for a “soft makeover” on things like valances and cushions.
“But we have changed the uniforms to ones with pink and blue strips,” he says. He has put a flag outside the entrance too. Previously the façade blended in so completely with the surrounding office buildings that it was hard to tell it was actually a hotel at all. But he says the main achievement has been a recognition that perhaps the old Ellington was aiming too high.
“The previous owner just didn’t get the price points right,” he says. “They were out of reach of people in Leeds. We have entry level prices at £89, and we had 72% occupancy last weekend. These rooms had been coming in at £200 previously.” The same is true of the restaurant, he says.
They may no longer have Albert Roux, but the new chef is James Cooper, a man with a long experience of working in Yorkshire hotels. “He’s a lot more low-key,” says Ward, implying that maybe that is what people want. The hotel has also repositioned itself as four-star, rather than five-star – a top-notch four-star, however. Ward says they are aiming to be recognised by the AA as having four red stars, which means you are among the top 200 four-star hotels in the country.
“You have to wonder if Leeds really has a need for a five-star hotel at all,” he says. “There is really very little difference in terms of service between four-star and five-star. “Market restrictions mean that for a five-star to be effective you really need to have a lot of business. Many public sector agencies, for example, aren’t allowed to use five star. And people travelling up from London expect prices to be cheaper up here.” Ward points out that Oulton Hall on the outskirts of Leeds, which for many years was Yorkshire’s only five-star establishment, has dropped a star.
He also claims that the Cedar Court Grand, which opened in York earlier in 2010, has already secretly dropped its ambitions to become York’s first five-star hotel, and is aiming for four-star status instead. That’s a claim hotly disputed by the hotel itself. A spokesman said that it has been working very closely with the AA to make sure that it does indeed come in at five-star.
“We are definitely a five-star product in terms of spec,” the spokesman said, “although the real challenge will be on levels of service.” That will be up to the AA’s mystery customers to decide. The spokesman couldn’t say exactly when it would be known what grade the hotel has got, although “spring 2011” seemed a likely date. The hotel has, however, lost its original general manager.
Andrew Coney was brought in to launch the hotel, as we featured previously in this magazine. But he didn’t in the end want to relocate his family for the nitty-gritty business of establishing the hotel in the local community. “You really need someone locally based to do that,” the spokesman said. So in the meantime the Cedar Court group’s operations director John Horwath has been general manager, although Maria Florou, currently general manager of the Cedar Court in Huddersfield, will be moving over to York early in 2011.
As luxury destination hotels that could potentially have a nationwide clientele, however, both hotels could soon face competition from two new establishments that are opening up further east.
For Paul Ellis, chief executive of property developer the Skelwith Group, is confident that he can start opening Raithwaite Hall next summer, the first of two country retreats his company has been developing. “We do have a pre-booking website,” he says, “but we are not taking bookings at Raithwaite until September, just to be on the safe side.” His other venture, the Flaxby, a resort just off the A1(M) between Harrogate and York, is still not due to be completed until 2012.
He admits the planning of this 283-acre site has taken some time, but he is not surprised. “We have had a long discussion over the Section 106 agreement,” he says. “It has taken us 18 months to get the planning application through committee, and the agreement is still not signed off in principle. But there again, it is currently the largest proposed development in Harrogate district.” The Skelwith Group in the past has been better known for building mixed use and residential developments.
Ellis says he saw hotels as a new angle. “I didn’t just want to build something and lead somebody else to take the profit,” he says. So the company has been developing the sites, spending nearly a total of £60m on the two of them, and will own them. It won’t operate the hotels, but that hasn’t stopped Ellis aiming high.
When Raithwaite opens, it will be the first operation in Britain run by US-based international hotel operater West Paces. Its current operations include the uber-luxurious Ayana Resort in Bali and, through a subsidiary, the Setai Fifth Avenue, a hotel that is currently causing a stir in New York. “In these times you have got to think outside the box,” says Ellis. “People like West Paces would normally have looked at London. But Yorkshire deserves to have a fantastic hotel of its own.” Set in 88 acres in Sandsend near Whitby, Raithwaite Hall originally belonged to a shipping magnate who lost a fortune in the Second World War and shocked society by giving it away to his nanny.
Ellis bought it from Gary Douglas, one of the founders of the company behind GHD hair straighteners. The 44-bedroom hotel will include a fine dining restaurant. As the site includes a beach, he is also hoping to install beach huts that could be let out. Flaxby, meanwhile, he sees as an “upmarket conference destination”. There are four different operators who are still budding to run the resort, which will include 303 rooms, a range of restaurants, bars, and a spa.
But it has also caught public attention so far because of the way the development has been partly funded. Private individuals have been invited to make small investments into the project in return for a share of the profits when the hotel is operating. Such an approach is similar to a model that Guesthouse Invest, a company building hotels in London, had adopted seemingly successfully, until it went into administration at the start of the recession, losing investors virtually all their money.
But Ellis says he has learned from that example. While investors in Flaxby will share in profits, they won’t get a guaranteed number of nights in a room per year. “That’s where Guesthouse Invest went wrong,” he says. “People bought the rooms because they could get occupancy. In effect they were getting nights for free.” Ellis claims that both hotels are in an area that doesn’t have any luxury hotels at the moment.
“People might want to go on a holiday there who are sick of caravans and B&Bs,” he says. He may be being disingenuous. That part of Yorkshire may be devoid of such hotels, certainly, but just over the border in Teesside a hotel opened in December 2009 that, with 61 rooms, two bars and a 13-room spa, is clearly a match for Raithwaite at least – only it is set in 375 acres, not 88.
Rockliffe Hall has already been awarded five stars by the AA as well. However Ellis is not deterred by competition. He says he thought about buying the Ellington when it was in administration, only he thought the site was too small. He is, however, looking at two potential projects elsewhere in the region, one in central Leeds, and one in central Harrogate.
There is, however, another owner of a country house in the region who, after five years of careful restoration, is marketing his property out for what he hopes will be a new kind of corporate and private offering. Goldsborough Hall outside Knaresborough had been left empty for five years when Mark Oglesby acquired it.
Having made a fortune by the sale of his dotcom business earlier last decade, he has now spent at least £2m on restoring its main rooms and renovating six of its 40 bedrooms with such modern day luxuries as whirlpool baths and plasma screens.
Oglesby, who also happens to live in the property, has been very discreet about marketing the venue, which thanks to an estate sell off in the 1970s is now carefully hidden behind some tasteful retirement homes. You can’t just turn up and expect to be able to book a room, for example. But that is deliberate, he says, and that discretion has led to some big name celebrities coming to stay.
“I can only talk about former prime ministers,” he says. “But there aren’t many of those still living. Our clients come because it is private. “We can do up to 200 for a function, but we can also do dinner for two. If they are staying here and doing other things, we have the chef here.
But if the chef is not in, we put them in one of our Bentleys and send them out to a restaurant.” It’s not surprising that he regards his venue as more like a luxury bed and breakfast than a boutique hotel. “There is no real way to describe it in England,” he says. “In France they have chateaux you can stay in – they are far more geared up to that. Unfortunately the concept of B&B in England is rather downmarket. So in hotels there are two extremes, tiny boutique venues and big hotels.
We are in between. “If you run a hotel at five-star level you have to have 24-hour concierge and all those things that we don’t have and don’t need to have. But we are also different from a boutique because we are 400-year-old stately home.” Goldsborough does have an amazing history. Built in 1601 by a Sir Richard Hutton, the house was occupied by Oliver Cromwell’s troops while they destroyed Knaresborough Castle. In the 18th century the Byerley Turk, the oldest of three horses that were the original stud for all of today’s racing thoroughbreds, was buried there. But Oglesby hopes he can use the Royal Wedding in 2011 as a means to highlight the venue’s particularly illustrious 20th century history. In 1922 it became the home of Princess Mary, George V’s daughter and the original “people’s princess” thanks to her tireless work visiting wounded soldiers in the First World War. That year she married the son of the Earl of Harewood, making her the first royal to marry someone who wasn’t royal themselves, and the couple came to live in Goldsborough before moving to Harewood House when the then earl died.
So far, the omens are good. The 12 acres that remain of the estate include a garden that was laid out by Princess Mary in 1928. Oglesby says when he recently opened these out to the public for one day, interest was so great the police had to shut the road for a few hours.