Von Essen goes after the family market
Von Essen took over the Luxury Family Hotels group two years ago, providing the investment clout needed to take the concept to the next level. So what's the demand for this market - and how is it being met? Rosalind Mullen reports
When a successful luxury country house hotel decides to turn away lucrative wedding business during July and August, crank up the housekeeping duties and complicate the F&B service to boot, you can only hope it has an alternative business plan. Which is, of course, exactly what the 17-strong hotel group Von Essen does have. Last summer it earmarked one of its country house hotels, the Elms in Abberley, Worcestershire, as the fifth property in its Luxury Family Hotels portfolio and underlined its commitment to this market by pledging £7.5m to upgrade the other four hotels. Behind all this is what Von Essen perceives as a growing demand for upmarket family breaks in the UK.
Luxury Family Hotels (LFH) was the brainchild of Nicholas Dickinson and Nigel Chapman, who launched their first LFH hotel, Woolley Grange, in 1994. Each hotel is beautifully furnished with antiques, sofas and art, but caters for families by offering fully staffed crèches, child-friendly activities, large grounds and flexible dining. As parents themselves, Dickinson and Chapman had identified a gap in the market for middle-income couples who had become used to staying in nice hotels before the children arrived, and didn't want to spend holidays in big resorts as a family. By 2005, the group had expanded to four hotels and needed a higher level of investment to take it to the next level. It was at this point that Von Essen came along, making a bid of more than £30m.
The evidence to support the potential of this market is out there. According to the Office for National Statistics, weekly spending on recreation and culture in 2005-06 was the second-highest after transport, at £58 per household. Mintel's 2007 report on British lifestyles adds that we're developing expensive tastes, and at least 22% of us take short breaks. Meanwhile, child media specialist Kidzsmart says children influence a whopping £30b of family purchase decisions every year, including where to eat, where to stay and where to holiday. Yet, the 2008 Good Hotel Guide has criticised the industry's attitude towards children, claiming hotels continue to treat them as second-class citizens, with as many as a quarter having some form of age restriction on children.
You just have to look around to see that families increasingly like to holiday in style. Holiday village company Center Parcs, for example, has just spent £60m on redesigning and upgrading its four sites. What stands out, however, is that there are no other hotel groups in the UK devoted solely to the luxury family market, and few independents. There is competition, though. Increasingly, top-end hotels have been looking at ways to include this market, so the pressure is on for LFH to keep the brand moving and cover all areas.
To get an idea of this competition, you just have to log on to the seductively chic Mr and Mrs Smith hotel site (www.mrandmrssmith.com) and check out its guide to the trendiest child-friendly hotels. Arguably, few of these luxury havens are as dedicated as LFH - for instance, Cliveden, Cowley Manor and Babington House have play areas but don't provide a supervised crèche. But what they do well is raise the stakes in terms of adult pampering.
Von Essen has recognised this and is investing in spas to ensure that LFH meets the increasing expectations of these luxury-loving parents, enticing them to spend their time in and around the hotel. As part of a £4.5m revamp of the Elms, it has opened a crèche and will complete work on six bedrooms, a bistro and a £3.5m state-of-the-art spa at Easter. It's also investing in spas for Fowey and Woolley Grange, scheduled to open in May 2008 and 2009 respectively. Meanwhile, Moonfleet Manor will undergo a complete redevelopment in time for the 2012 Olympics, as the sailing events are taking place in Dorset.
"Families don't just want a crèche," explains sales and marketing manager Mandy Ley-Morgan. "They want a holiday, too."
Von Essen is also stepping up its focus on the food and is trying to raise awareness of the accolades its restaurants already have. At the Elms, for instance, head chef Daren Bale has already notched up two AA rosettes.
Arguably the most problematic side effect of focusing on families is that it's only really busy in school holidays. According to Ley-Morgan, however, the company has been successful in making itself attractive to non-core business outside the holidays, attracting 70% families, 25% corporate and 5% non-family leisure across the LFH portfolio. She adds that average annual occupancy is 78% versus the industry average of 60%.
So what about all that potential wedding business? Acting general manager Mark Thorold is expecting the 23 rooms at the Elms to be booked out with families every holiday. As a result, even though last year the Elms did 72 weddings, he has no qualms about confining wedding bookings outside holidays - even sacrificing July and August - believing it crucial not to mix two very different customer bases.
This strategy gets the thumbs-up from hotel consultant Stuart Harrison, principal at the Profitable Hotel Company. In his view, trying to accommodate different markets under one roof at the same time will simply alienate guests. "You have to be clear about which markets you're in, based on your strengths," he says. "I challenge any hotelier who tries to be all things to all people."
Harrison argues that hoteliers can't go down the wedding route and then sell the last few bedrooms above the ballroom to romantic couples because they will end up ruining that business. Similarly, a business that's chasing the family market should resist taking empty-nesters during the holidays because it will alienate them. "You can, however, switch your market focus at different times of the week or year," adds Harrison. "Find a trend or niche or opportunity in the market and go for it. But don't mix it."
Focusing mainly on the luxury family market is relatively new and requires a massive change in mind-set for any hotelier (see panel right). In the words of Thorold, who previously worked for Hilton and Marriott, coming from companies that thought "oh, no, they're bringing children" to one that thinks "oh, good, they are bringing children" is "a big leap in culture".
Profitable Hotel Company website >>
The mini economy
Each year, children under 16 spend their own money on:
- Snacks and sweets £680m
- Clothing £660m
- Music and CDs £620m
- Footwear £400m
- Software £350m
- Magazines £250m
- Toiletries £83m
Source: Kidzsmart
The ups and downs of becoming a Luxury Family Hotel
Making the transition to a totally family-friendly hotel is no picnic. Von Essen began looking to turn the Elms into an LFH property about three years ago.
There are lots of differences compared with a "normal" hotel. Each LFH property, for instance, has a dog or cat to enhance the sense of being in someone's house. But while the atmosphere is relaxed, service levels can never be compromised as the tariffs aren't cheap.
Not surprisingly, then, the transformation required a lot of work with the staff. Off came the shirts and ties, in came big smiles and out went any country house hotel stuffiness. The hotels, packed with antiques, art and soft sofas, change their focus over 24 hours. During the day, they're fun, then at 7.30pm it's G&T time, everything calms down and parents can indulge in fine dining and relaxed elegance. Not all staff enjoyed the experience. A trial weekend at the Elms saw some staff embrace the idea, while others decided to move on.
"Housekeeping was a big challenge," says sales and marketing manager Mandy Ley-Morgan. "Suddenly staff had Z-beds, sofa beds, nappy buckets, sterilisers and changing mats to work into the equation. Sometimes they were hoovering the stairs three times in 24 hours."
Staff also noticed a different use of space in the hotel and commented that children can take up more time. For instance, the reception area has been made more accessible and warm, which in turn means you'll find children running around in it, a lot of staff joked initially that they couldn't get any work done.
However, the increase in wear and tear on furnishings and workload is expected to be compensated for by occupancy levels. In fact, all five hotels report average occupancy of about 78% compared with the national average of 60%. Ley-Morgan also notes that the average length of stay is increasing at all Luxury Family Hotels, from about two nights four or five years ago, to closer to four nights now, partly because of the growth in popularity of UK short breaks.
On the F&B front, becoming a family-friendly hotel has meant a more complex level of service. Kids' tea is served at 5.30pm and incurs an extra hit on the kitchen. There's also early family dining and adult-only dining as well as all-day lounge and room-service menus that cater for children too.
In fact, at the Elms you can dine all over the hotel - on the terrace, in the family bar or in the sitting rooms. The three-rosette, 52-seat fine-dining room headed by Daren Bale is more suited to adult dining, but the 30-seat Pear Terrace, which will open in April, will be more family-friendly and casual.
What ultimately sets the LFH hotels apart is that all five have Ofsted-registered crèches and the nursery staff are Criminal Records Bureau-checked. Despite the obvious surge of business at holiday times, these checks mean seasonal workers cannot easily be used. As a result, staff in the Bear's Den often work over seven days during school holidays and peak times on the basis that they will have whole weeks off. A working day tends to comprise a series of two-hour stints looking after up to 20 children aged three months to eight years.
The strength of the family market
Center Parcs
Although Center Parcs is not comparable with the luxury hotel market, the recent £60m investment in upgrading the accommodation and adding spas across all four sites indicates a continuing commitment to the quality family market. The group is signing up quality casual-dining brands such as Bella Pasta and Café Rouge, and will introduce a gastropub.
With occupancy levels at 90% and a fifth site with planning permission at Woburn, Bedfordshire, it's clear the company is looking to move the concept on. "We reflect trends in society, attract the aspirational affluent holiday-maker and cater for changing tastes," says a spokesman.
Hilton
Hilton hotels are traditionally seen as business hotels from Monday to Thursday, with leisure guests at the weekends, but now they're increasingly targeting families. While the group doesn't position itself as "luxury", Alistair Rodger, vice-president of promotions, sales support and events, says the family market is the fastest-growing sector.
"It's particularly valuable business," says Rodger. "I think with the credit crunch, people are more interested in spending a weekend away than going on holiday." This is supported by Mintel's 2007 report on British lifestyles, which finds that nearly a quarter of Brits (22%) take short breaks.
A few years back the group experimented with converting underused areas such as bars into crèches, but quickly realised that the hotels were better suited to being used as a base from which families could explore the surrounding areas rather than a destination in themselves. As a result, initiatives have been restricted to kiddy-friendly meal times and PlayStations in bedrooms as well as family-targeted packages such as the Hilton Mini Break and My little Hilton.
These are two-night bed and breakfast breaks that include dinner on the first night and free use of the hotel's leisure facilities. At weekends, late checkout operates until 6pm on Saturdays and Sundays and lazy breakfast is served until 11am.
My little Hilton allows under-18s to stay for free when sharing their parents' room or to take a separate room at half-price. In addition, children under 10 can eat and drink for free from a children's menu.
Some Hilton hotels have stepped up their focus on children even more. For instance, Hilton Coylumbridge, near Aviemore and Hilton St Anne's Manor, Bracknell, have used their proximity to local attractions to pull in families.
The 175-bedroom Hilton Coylumbridge, in the Cairngorm National Park, has recently undergone a £3.2m refurbishment and has a swimming pool complex with sauna for parents and a Fun House supervised crèche for children. There's also an outdoor adventure park, including a trampoline, climbing wall, dry ski slope and skate park.
The 170-bedroom Hilton St Anne's Manor is making the most of its location near attractions such as the Bracknell ski slope, Coral Reef Water Park and Legoland Windsor by targeting families. As well as a play area in its 25 acres of grounds, it has a health and fitness centre with pool, gym and spa and offers family or interconnecting rooms.
