Quinn Hotels Business Statement Page 1

Quinn Hotels Business Statement Page 1 Contents Page 1. Purpose of the Report ….…………………. 3 2. Overview ………………………………………….4 3. Demand …………………………………………..5 4. Competition ……………………………………. 7 5. Tourism ………………………………………….. 8 6. Access ……………………………………………. 16 7. Employment ……………………………………. 17 8. Recruitment ……………………………………. 18 9. Training ………………………………………….. 19 10. Procurement …………………………………… 20 11. Local Support ………………………………….. 22 12. Summary ………………………………………… 24 Appendices …………………………………………………. 25 Appendix 1: Competitor SWOT Analysis..……….. 33 Appendix 2: Procurement ………………….…..…….. 42 Quinn Hotels Business Statement Page 2 1.0 Purpose of the Report This report has been prepared by Quinn Hotels to describe the business rationale for the proposal to construct a new five star luxury golf resort hotel on the site of the existing Belfry Hotel and Golf Centre. The proposed development represents an exciting opportunity for the local area to accommodate a truly international standard facility, building on the iconic reputation of The Belfry in the sporting world and the potential to extend this into the international tourism market. This report commences with an overview of the business objective of Quinn Hotels having taken over the Belfry in 2005 and having obtained full operational control in 2007. The decline in the attractiveness of the current hotel facilities to the corporate and business tourism markets is described in terms of the current and projected decline in revenue and departure of major corporate clients. The report then describes the competition that exists to the current hotel and establishes the market within which the new resort hotel will compete. In comparing this market, the report establishes the characteristics of the new development in terms of visitor profiles, the likely occupancy levels and length of visitor stay. The report addresses the extent to which The Belfry can make a significant contribution to tourism in the region, including business tourism which is a major component of the area’s hospitality industry with major growth potential. From a business perspective, the report describes the accessibility of the location for customers and staff and sets out the likely employment benefits of the new proposals The new Belfry will focus on delivering a ‘green footprint’ and while matters of sustainable development and energy conservation are dealt with in other reports submitted along with the planning application, Quinn Hotels has initiated, and would intend to continue to re-source produce and services for the Hotel from local producers. This matter is addressed in this report Quinn Hotels Business Statement Page 3 2.0 Overview The key focus behind this Business Statement is to demonstrate the need to develop The Belfry Resort into a world class venue that brings business to the Midlands that would otherwise choose European and UK destinations Currently, the Midlands does not have an International five Star hotel or Resort and one would have to travel 65 miles from The Belfry to find the first option which is a small boutique Bed & Breakfast in Gloustershire (see Map 1.1) Map 1.1 The Hotel intends to highlight a link in the decline in sales and profits with the long term underinvestment, with an additional link to improved competition Quinn Hotels Business Statement Page 4 3.0 Demand Current Business Performance 3.1 Revenues and profits at the hotel are continuing to fall well short of targets and showing little or no growth on 2006, this is as a direct result of product. The hotel has had little investment over the last 10 years whilst part of the De Vere group. This has resulted in a continued migration of business to competitors that have demonstrated refurbishment and development over the last few years. 3.2 In the budget year 2006, the hotel’s sales fell by 3% (£1 million), currently The Belfry is trading 4% down on 2006 in total sales for the months January to August ‘07, which demonstrates a continued downward trend. (Table 3.1) 3.3 Customer and intermediate feedback supports the relationship between sales and product, this is called a price/ value matrix, which is monitored periodically, this enables The Hotel to flex our prices to react to the sensitive nature of the customer reaction to product and as demonstrated, this is now unsustainable. Turndown Business 3.4 Over the last 2 ½ years The Belfry has turned down over £46 million worth of business due to “no space available”. This is as a direct result of the hotel’s size which limits the number of events that it can hold. (Table 3.2) 3.5 There are only 40 venues in Europe that can hold a banquet for more than a 1,000 people and accommodate 500 bedrooms overnight. When you add 5 star, golf and Spa into the equation, then the UK is negated as are most European venues. This is further demonstrated by the fact that the hotel has lost £10 million over the last 2 ½ years due to the “event being too large”, whilst loosing an additional £31 million to client moving to “other cities”, of which Europe features highly. Quinn Hotels Business Statement Page 5 3.6 The Belfry has a unique opportunity to build an international venue that is outside North America that is capable of meeting the needs of most clients, whilst being able to demonstrate the demand to fill the venue. In the last 2 ½ years that the hotel has been tracking, it has recorded £275 million worth of unrealised business, with reasons ranging from “No Decision Made” to “Budget too Low” 3.7 As the hotel operates in a very specific market, the loss of potential business is partially absorbed by the local market, but mainly by venues outside of our region. The development of The Belfry would consolidate the 4 star business currently in the region and secure new 5 star business from outside the Midlands. Accommodation Statistical Trend 3.8 Average rates continue to either decline or hold static year on year as the impact of not having the volumes from the business tourism market take their toll. (Table 3.3) 3.9 Occupancy, as with rate, is in decline as a result of the declining business tourisms. (Table 3.4) 3.10 With erratic performance in the above indicators, RevPAR (Revenue Per Available Room) is generally in decline. (Table 3.5) 3.11 In summary, as a resort, guests who stay over night generate the majority of the revenue. Since occupancy is in decline, so is the resort’s revenue. Quinn Hotels Business Statement Page 6 4.0 Competition 4.1 The Belfry’s competitor set is due to change significantly, currently the hotel competes in the Midlands market, with some loss of high profile Golf and Business Tourism events to the future competitor set as a result of prestige, quality of product and facilities on offer. (See Appendix 1) 4.2 The Belfry believes that the Blue Chip customer is a little more discerning, and looks for a product that they would wish to use as a leisure guest, so the size of bedroom is very important, as demonstrated by the extensions at Hanbury Manor & Celtic Manor, along with the new build of The Grove. The Belfry’s current average bedroom size is 24 sqm, where as the competition are 30-46 sqm on average. 4.3 The development will further enhance the local economy as they will not be competing with the local hotels, but rather taking business from other regions and overseas Current The Forrest of Arden Marriott Leicester Hilton Metropole Q Hotelm Chesford Grange Paramount Hinkley Island Hotel Future The Grove, Hertfordshire Gleneagles, Perthshire Turnberry, Ayreshire Celtic Manor, South Wales K Club, County Kildare Hanbury Manor, Hertfordshire Quinn Hotels Business Statement Page 7 5.0 Tourism None Belfry data has been researched from the following sites: www.visitbritain.org www.enjoyengland.com www.birmingham.org.uk www.warwickshire.gov.uk www.tourismtrade.org.uk Inbound Tourism 5.1 32.1 million tourists visited the UK in 2006, which is 7% up on 2005’s figure of 30 million. Key revenue markets in 2005 were USA (£2,384m), Germany (£998m), Ireland (£895m), France (£796m) and Spain (£697m). The graph below shows the movement in foreign leisure & business tourists 200 – 2005, a steady rise can be seen after 9/ 11. (see Graph 5.1) Graph 5.1 Visits to UK by reason 12,000 10,000 8,000 ) 0 0 0 ( 6,000 s t i s i V 4,000 2,000 0 2000 2001 2002 2003 2004 2005 Business 7322 6778 7158 6967 7470 8168 Holiday 9302 7585 7735 7973 9275 9713 Misc. 2065 1964 2206 2174 2564 2797 Study 686 609 682 623 585 605 VFR 5834 5898 6398 6978 7861 8687 5.2 The Graph 5.2 shows the visitors to Central England, which demonstrates significant growth of 17% for Central England in 2005 v 22% in West Midlands, with both ahead of the total England growth of 8%, indicating the growing demand for the West Midlands. Graph 5.2 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2000 2001 2002 2003 2004 2005 Central England 30,855 27,373 32,272 32,575 34,476 40,590 West M idlands 10,741 8,699 11,471 11,054 10,937 13,314 Quinn Hotels Business Statement Page 8 5.3 In 2006, 98% of The Belfry’s business was domestic. This continues to be a challenge as the product is not up to international standard, especially to the US and major European countries (France/Spain/Germany/Ireland) who would visit the hotel as the most famous Ryder Cup venue UK Tourism 5.4 UK domestic tourism total revenue fell by 9.5% in 2006 over 2005, with revenue from residential stays dropping by 5%.

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