Jupiter Hotels – Taking Hotels Through the Pandemic
When we last spoke with Jupiter Hotels things were looking good for the hotel company, with a diverse range of properties around the country, each with their own unique character. Indeed, for the remainder of the year, things looked good.
Whilst trading has been competitive across the industry, we held our December revenues in line with the previous year and in terms of Christmas, we equalled the record-setting performance of 2018. This was a strong result particularly against a market that was declining” explains Andrew Pring, Chief Operating Officer of the company.
However, a crisis was looming that nobody could have seen coming.
A Threat to an Industry
“In the early months of the new year we saw significant growth on 2019 and by the end of February, we had recorded a sales increase of over 9%. If the first quarter had finished without disruption, we would have ended this period of trading with revenue growth in excess of six percent above the previous year,” Pring explains. “But that was waylaid quickly with the COVID 19 outbreak. Since then, we’ve been in lockdown and most of our hotels have had to close. Eight of our 31 hotels have remained open for keyworkers, but the others will remain closed until the 4th July, as we anticipate the government will confirm shortly that hotels can open from this date.”
It’s hard to overstate the impact COVID has had on the hospitality and leisure industries, for all intents and purposes practically grinding an entire sector to a stop.
“It’s had a huge impact on our business. With over three-quarters of our hotels closed and generating no revenue it has been tough, as it has been for all hotels across the country,” Pring tells us. “We’ve maintained a skeleton staff at the hotels that are closed to provide adequate security and we’re making use of the government furlough scheme. But like any business, we have fixed costs, so the business rates holiday has been helpful for the industry. Our main attention has been focused on planning to get the hotels open within the environment we’re going to be trading in with a clear focus on hygiene and cleanliness. We want customers to feel safe and feel we’re taking new working protocols very seriously.”
Indeed, for a glimpse of what that might look like one need only look to the eight hotels that are still open, serving essential key workers even during the height of the crisis.
“We’re open for keyworkers under the protocols we’re assuming will ultimately be put in place when the lockdown ends. These are our own industry protocols as the government haven’t given any guidance yet but social distancing is a key consideration.” Pring says. “We have the two-meter rules in place, we have hand gels and disinfectant wipes, and we’re providing room service rather than restaurant facilities. Other protocols include offering housekeeping but we’re not automatically servicing rooms during a guest stay but completing deep cleaning of rooms when a guest checks out.”
All in all, while Jupiter Hotels was competing from a strong position at the start of the year, the company is facing the same challenges as every company in the sector.
Returning to Normality
“Our issues are the same challenges as the rest of the industry. A competitive market, increased competition and levelling demand with the economy plateauing in 2019. The industry itself didn’t foresee significant top-line growth in 2020, and in the first quarter we were bucking the trend, but what’s come along has really devastated the leisure industry completely,” Pring says. “It’s now about survival, making sure we can get through this and continue to operate. Jupiter won’t be alone in that. We have support from our shareholders and the banks and we’re doing what is needed, particularly with our cost base with a drive to get back to some form of normality as soon as possible.”
The big challenge, Pring believes, will be the Christmas period, typically a huge part of the hotel calendar year.
“Without any significant changes, I expect it will be very deflated this year, impacted of course by social distancing. An effective vaccine that could be ready in time would be a game-changer,” he says. “That would actually allow the business to recover both for Jupiter and the whole industry.
We will look to continue to grow our business, we’re looking to expand and will take the opportunities as they arise. Whatever environment it is that we find ourselves in will undoubtedly present opportunities for our businesses to grow, be that acquisitions or management contracts.”
However, despite the undoubtedly challenging times ahead, Pring is proud of what Jupiter Hotels has achieved, and is looking forward to bringing the industry back into prosperity.
“Whilst the demand in the first quarter of 2020 was stronger than we were expecting our priority is to get back on an even keel. I think that we will not see anything like the volumes we were achieving in 2019 until we get into the middle of 2021 at the earliest, and in some cases not until 2022. So that will make our operation very different from where we left it back in March.”
While there is a great deal that is out of Jupiter Hotels’ hands, such as the efforts to create a vaccine that will give people the confidence to go out, and the less buoyant leisure market we will see in the meantime, Jupiter Hotels is still preparing and making plans.
“Looking forward our plans are centered around continued investment, we have a strategy for our key properties,” Pring tells us. “We operate most of our hotels under the Mercure flag which allows us flexibility as the brand focuses on the immediate locality and is less about the physical building. We own both smaller Country House Hotels in rural locations and larger City Centre business in strong commercial locations and our clientele is also a broad base. Based in many areas of the country our own eclectic businesses have their benefits as much as challenges, but each hotel has a personality of its own and when we carry out refurbishments, we do this with an eye on the local environment. Where possible we use that local personality to put identity in the hotel. We completed our most recent refurbishment at our hotel in Brighton in early summer of last year and the results were very encouraging, we were set for a very strong 2020 until the COVID 19 pandemic hit us.”
As the market returns and hotels are again popular places to stay, Jupiter Hotels will be ready.