We may choose to stay in hotels for their reassuring brands, but the all-important service could well be down to a Glasgow-based company led by Hebridean accountant Stewart Campbell.
Redefine BDL Hotels is the hospitality sector’s biggest management company, responsible for a diverse collection of 65 branded and private label hotels across the UK.
Its latest coup is to land the management of the Marriott Courtyard, under way at the top of Leith Walk in Edinburgh’s New Town conservation area. The 240-bed hotel will be fronted by three Georgian townhouses once home to Robert Louis Stevenson’s family, and is the latest project to be developed by the capital’s Chris Stewart Group, best known for its award-winning Advocate’s Close development in Edinburgh’s Old Town.
But it is the hotel management that will make or break the project when it opens its doors later this year. Mr Campbell says: “It’s a landmark moment for Redefine BDL Hotels as we embark on our first-ever partnership with Marriott and add a fourth Edinburgh property to our growing portfolio.”
Mr Campbell, 39, leads a team of 140 including 65 in Glasgow, running partnerships with seven of the most prestigious international hotel brands, including IHG, Hilton, Starwood, Accor, Marriott, Best Western and Wyndham.
The company acquired its awkward name after BDL, founded in Glasgow in 1997, was acquired by South African property investment group Redefine in 2010 following the death of co-founder Louis Woodcock. Its hotels turn over more than £500m and employ 4500.
At the end of 2014, the ebullient Mr Campbell said he hoped to have 100 hotels in the portfolio in 2016.
He is not quite on target, but explains: “We have another eight in our signed pipeline, and there is a pipeline of potential opportunities.....a lot of the big portfolios have been bought by people with their own international management platform.”
While admitting that some unexpected competition has emerged, he says: “The opportunity for third party management companies is definitely growing. Whilst we haven’t got to 100 hotels it’s about 11,000 bedrooms which makes us the largest in the UK. A number of hotels in the pipeline are large hotels in key locations, and we have been a bit more selective. We may run private label hotels but our mantra has been we will only take on those with an international brand.”
In between the two camps are consortium hotels like the Best Western chain, which have no hard franchise agreement and brand standards are “less penal”.
The group could have mopped up hotels in the US, where the third party model is the norm, but Mr Campbell says: “We have been a bit cautious just because there are so many opportunities. We are trying to educate mainland Europe that this is the right model for them. There is definitely a shift, but it’s slow. Our strategy is to become Europe’s leading hotel management company.”
As the largest franchisee for IHG (InterContinental), Redfine BDL probably has that accolade already, as the European model tends to be owning or leasing. But expansion carries risks. “We have to find something that has the scale where we can justify putting in operations, finance, sales, and food and beverage teams, and the UK and Ireland are the only countries where English is the primary language. Hospitality is a customer-facing business, if we tried to run it from the UK we would take our eye off the ball and the business would suffer.”
He adds: “We are very honest with the owners, we say we will only work for an owner if we feel we can make a difference that justifies the fees, if you don’t go in with that mantra it makes it a very difficult relationship.”
Mr Campbell joined BDL as group accountant in 2003. He and other former BDL directors have invested personally in projects including a 100-bedroom hotel at Brae in Shetland that was built by the group for Sullom Voe workers. “It is one of the easier hotels to run,” Mr Campbell says. “We don’t have to market it.”
In total the group has now built over 30 hotels so it can also offer project management services for hoteliers building new properties.
On the oil downturn he adds: “Aberdeen is still the fifth highest revpar (revenue per room) in the UK, though for a while it had overtaken Edinburgh as number two behind London."
Registered in London and owned by a parent company registered in the British Virgin Islands, Redefine BDL has no ultimate controlling party but two real estate investment funds, one in the UK one in South Africa, each own 25 per cent. The model is de-risked by having relationships with a wide range of hotel groups, 24 in total across the 65 hotels.
Staff numbers in Glasgow have almost doubled over the past few years. Mr Campbell, who joined the board in 2013, says: “We are still in the same offices, it may well be we will have to look for new premises.”
The company is now talking to Strathclyde University’s hotel school about internships and prizes, and Mr Campbell sees plenty of road ahead.
“When I joined we had five hotels. As long as there is opportunity in the market I will still be there to make sure we get our fair share of them.”
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