Tapping the wells
After a long search, Hotel du Vin is to have a sibling. Executive directors Robin Hutson and Gerard Basset have hunted high and low in towns with demographics similar to those of Winchester.
Windsor, Richmond, Cambridge, Bristol, St Albans, Chichester and Brighton were all considered, but it was a Tunbridge Wells Georgian property, currently trading as the Boatwright Calverley Hotel, that best fitted the bill. "It's on a good commuter line - and also on the route to the Continent, should we ever decide to tap into that market," says Hutson.
It has taken a little while to get funding for the new property sorted out. Of the 14 original investors in Hotel du Vin, there remains only one. Winchester businessman Ashley Levett - who also owns Richmond Rugby Football Club - has bought out all the others, paving the way for the launch of the new property.
Hutson believes this less-cumbersome arrangement is the best way forward. "It would've been difficult to get all the original investors to agree to the new venture and, with a lot of investment in the form of loan stock, they would've been unlikely to invest more before the original debt was paid," he says.
Under the new set-up, Levett owns 50% of the shares and Hutson, Basset and a new player, Canadian Peter Chittick, the other 50%. Chittick, who owns the Hostellerie de Crillon le Brave in the South of France, will be general manager of the Tunbridge Wells property while retaining his French property.
The idea is that Chittick will be in charge of the new Hotel du Vin on a day-to-day basis, with support from Basset on food and beverage two days a week. A new vehicle, the Alternative Hotel Company, has been formed as the parent group of both hotels.
The new property includes 40 rooms and a derelict filling station. The plan here is to reduce the number of rooms to 32 and develop the rest of the site into a mews of townhouses. Planning permission for these changes is being sought, and developers will be invited to make offers for the rezoned site. The idea is to achieve maximum net proceeds from the sale of these assets and create a residential design that will be harmonious with the hotel operation.
Total investment will be £2.5m, financed by £600,000 of equity; £700,000 of private loan stock from Levett; and the balance from bank loans. Initial investigations suggest that the new Hotel du Vin could achieve 77% occupancy and generate £72 per room night by the third year.
Despite the excitement caused by the new project, Hutson will continue to channel most of his energies into Winchester, ensuring that just because expansion is uppermost in the mind, the original concept is not forgotten. Having Chittick on board gives Hutson peace of mind that the concept can be expanded without difficulty.
"I didn't want to expand with young managers who might not have understood what we were doing," he says. "It's better to have someone with more experience who has some capital in the project."
The coming months will be busy ones for Hutson and his partners. The aim is to close the Tunbridge Wells property during July, August and September, reopening in its new guise in early October, almost exactly three years after the opening of the original Hotel du Vin.
Closer to home, there is plenty going on at Winchester as well. This year, three bedrooms and a suite with private dining for 12 people will be added, making a total of 23 rooms. The kitchen is also being expanded to make room to store food, which until now has been kept in the basement. Total investment for this project is £300,000.
Building costs are being met by a bank loan, while fixtures and fittings will be accommodated out of cash-flow. In keeping with the original concept, new sponsorship worth some £13,000 is also being ploughed into the project. New sponsors are Durney Vineyards on the suite; Sancerre Vatan; South African Meerlust; and, for the first time, Fuller's, which is sponsoring a traditional beer room. This brings total sponsorship to date to around £100,000.
The expansion is necessary to accommodate increasing occupancy levels, currently standing at 80% with an achieved room rate of £81. Food and beverage is also looking healthy. For the last two years, the bistro has achieved 100 covers a day, 365 days of the year. Average spend, which started at around £50 for dinner for two including house wine, has now reached £65. Hutson is looking at a turnover at the September financial year-end of £1.5m net of VAT, compared with £1.2m last year and just under £1m in year one.
Last year, clear profit after financing and depreciation came in at £100,000. This year, Hutson is looking at £150,000 - mostly as a result of increased bistro business where, apart from the wage bill, costs are easier to contain.
And it may not end there. Having found his ideal property in Tunbridge Wells, Hutson has not yet discounted finding something suitable in the other locations he has earmarked.
See Caterer late September, when we cover the build-up to the opening of the new property.
Next week we catch up with news of country-house hotel The Well House, near Liskeard, Cornwall
