Activities

WA Shearings Hotels (known as Shearings Holiday Hotels until early 2005) is the hotel division of coach and hotel holiday operator WA Shearings. The group was formed in 2005 from the merger of Shearings Holidays and the Coach Holiday Group, which can each trace their origins back more than 100 years ago.

The merger created a group that claims a 14% share of the £2.1b UK coach holiday market and owns the UK’s 14th largest hotel company. The enlarged company can boast a fleet of more than 400 coaches, more than two million UK bed nights, an annual passenger carrying of more than one million people and a combined database in excess of 2.5 million customers.

The group offers coach hotel and self-drive breaks in the UK, air and coach holidays in Europe, and long-haul holidays through partnerships.

The Torquay-based hotel division specialises in the fast-growing grey market, offering entertainment-led accommodation and themed breaks for the over-55s.

Timeline

• 1903: Shearings is established as a coaching company. Over the years it expands into air, cruise, rail and hotel breaks.
• 1970s: The group moves into hotel ownership and has 34 properties by 1996.
• 1996: After passing through the hands of Mecca Leisure and the Rank Group, Shearings regains its independence through a management buy-out that involves hotel director of operations Vince Flower. Bridgepoint Capital is its key backer.
• September 2001: Shearings puts itself up for sale for an estimated £30m to raise cash for expansion. However, poor trading conditions following the terrorist attacks on New York prompt the group to withdraw from the market in October.
• 2002: The group concludes a £65m refinancing deal which increases the director’s share but leaves its institutional backers, led by Bridgend Capital, with a 61.5% stake. The package includes a £5m pot to buy new hotels over the next three to five years.
• June 2004: The 36-strong group applies to float on the Alternative Investment Market in a move expected to value the company at £100m. However, it abandons the plan weeks later because it cannot achieve an acceptable value. A trade sale remains an option.
• November 2004: Coach operators Shearings and Coach Holiday Group (CHG) – which have explored co-operative link-ups in the past – announce that they are in merger talks.
• February 2005: Shearings and CHG exchange contracts in a £200m merger that is completed in March. Venture capital group 3i, an existing shareholder in CHG, takes a 67.8% stake after buying out Bridgepoint. Management holds the remaining 32.2%.
• July 2006: WA Shearings secures a £25m refinancing packaging with Lloyds TSB. The deal follows a £78m refinancing from the sale and leaseback of 39 of its 43 hotels.

Operating data

WA Shearings generated combined sales of £216m and operating profits of £14m in 2004.

Hotel turnover in 2004: more than £54m
Hotel operating profit in 2004: more than £11m
Occupancy: 78.25% (92.5% in April to October)

Number of hotels: 43

Scotland: 12 hotels -  Braemar, Dornoch, Fort William, Gairloch, Loch Lomond, Loch Long, Melrose, Oban, Pitlochry,  Portpatrick, Rothesay, Strathpeffer
Wales: three hotels - in Llandudno (two) and Tenby
Central & Northern England: eight hotels - in Blackpool, Cirencester, Great Yarmouth, Morecambe, Scarborough (2), Whitby, Windermere
South Coast: seven hotels – in Bournemouth (2), Eastbourne (2), Isle of Wight (2), Weymouth
South West: 14 hotels – in Exmouth (2), Ilfracombe, Lynton, Newquay (3),  Paignton, St Ives, St Mawes, Torquay (3), Weston Super Mare

Total number of employees at WA Shearings: more than 3,400
Number of hotel employees: more than 1,400

Strategy

The company intends to pursue its policy of buying better hotels to replace older ones with small bedrooms in star locations and to seek properties in new areas and those where supply outstrips demand.

Source: director of hotels, August 2005

Key directors

Group chairman: Bernard Norman
Group managing director: John Slatcher
Group finance director: David Newbold
Group sales and marketing director: Karen Gee
Operations director of hotels: Vince Flower

Contact

Carlton Chambers
Vaughn Parade
Torquay
TQ2 5EG

Tel: 01803 290 029

Website: http://www.shearingsholidays.com

Commentary

The merger with CHG in 2005 added nine Wallace Arnold hotels to the fold that, like Shearings, targeted the entertainment-led holiday market for the over-55s. CHG started life in 1912 as coach holiday company Wallace Arnold. It was bought out in 1997 and renamed the Coach Holiday Group in 2001 when it acquired National Holidays and Caledonian Holidays.

The hotels’ focus on the grey market fits neatly with the coaching business as 67% of hotel customers use Shearings coaches. They are also extremely loyal, with many visiting four or five of its hotels a year on both short and long breaks, giving the company highly stable occupancy figures.

The focus on coastal and rural resorts chimes in with research from Greypower, which found that 73% of mature travellers took their holidays in the UK, 82% to the countryside and 69% to coastal resorts.

Most Shearings hotels offer entertainment (such as tribute bands or Stars in Their Eyes performers) most nights, along with a range of themed breaks. Operations director of hotels Vince Flower identified these areas as key to the hotels’ future growth and success and they provided a means to tackle the shift from long to short break holidays by extending the opening season from 36 to 52 weeks. This strategy won Shearings a Thistle award in 2002 for its year-round contribution to Scottish tourism.

WA Shearings Hotels has adopted a rolling policy of replacing older hotels with better quality properties with larger bedrooms since the 1996 management buy-out. It has added about 14-15 new properties to the estate and sold around the same number in the past 10 years.
 
Although the focus this year has been on the merger, with four hotels sold or for sale to reduce duplication, Flower is starting to look for new sites. Last year, he added properties in Scarborough, Blackpool and Morecambe and is now looking to boost the company’s presence in Brighton (where demand outstrips supply) and to add sites in Chichester, Portsmouth, Northumbria and Fife.