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Hotel management company tunes up for its Euro vision

IN a quiet industrial estate on the south side of Glasgow, a hotel management empire is steadily building.

New HORIZONS:  Redefine BDL Hotels managing director Stewart Campbell says the company is well-placed to broaden its presence in Africa, where it already manages two hotels.
New HORIZONS: Redefine BDL Hotels managing director Stewart Campbell says the company is well-placed to broaden its presence in Africa, where it already manages two hotels.

Stewart Campbell, the amiable Hebridean and managing director of Redefine BDL Hotels, provides a visual tour of the growing portfolio of properties run by the company.

A collection of its most striking properties are illustrated in artfully shot photographs that line the office walls. Among the most elegantly captured is The Landmark in Dundee, a picturesque hotel that sits amid six half acres of landscaped gardens.

The Landmark, which is run by Redefine BDL under the Doubletree by Hilton brand, is the first venture the company has embarked on with the American hotel brand.

It is one of 61 properties the firm runs under management. Most are in the UK and operate as franchises of the biggest brands in the hotel world, from Intercontinental Hotels Group (IHG) and Starwood to Wyndham and Best Western. Some are run under its own, in-house brands.

Mr Campbell, who joined the firm as a group accountant from PwC in 2003, said the franchise model was the norm in the US. He sees the UK very much going down a similar path.

He said: "It is hilarious when you go past an airport [in America] and you have brands stumbling over each other. You have three Hiltons here, two there and you think 'how does that work?'.

"But everyone is a franchise and they are all operated by different companies.

"The biggest in the world is a company called Interstate Hotels, they are the biggest of what Redefine BDL Hotels are in the world and they have got about 400 hotels, mainly in America."

A graduate in accountancy and IT from the University of Strathclyde, Mr Campbell describes Redefine BDL as a third-party management contractor.

He explained that if a hotel owner approached a brand like Hilton to use its flag and successfully applied to become a franchise, the brand could hand organisations such as Redefine a contract to manage the property.

The services offered by the company, which employs 45 staff in Glasgow and 35 in London, cover the full gamut of hotel operations, allowing clients to tap into its expertise in areas such as sales, marketing, finance, revenue management, health and safety and facilities management.

Having built 32 hotels itself to date, it can also offer project management services for hoteliers building new properties.

The company, now known as Redefine BDL dates back to 1997, when BDL Hotels was founded by the late Louis Woodcock and David Thompson.

For the next 16 years its portfolio steadily grew, but there was no uniform pattern to the growth. Deals done at various points added and subtracted to the number of hotels it had under management, but the overall theme was one of expansion.

Its position fundamentally changed in May, however, when it merged with the hotel management arm of South African-listed Redefine Property Group, a few months after Woodcock's death.

The deal brought together the 48 hotels managed at that stage by "legacy BDL" (as well as its 75 staff) with the 12 operated by Redefine and its small team in the UK.

Although presented as a merger, BDL effectively became a subsidiary of Redefine, with its directors selling their share capital to the South African plc.

Mr Campbell said the union came at a point when consolidation was needed in the UK hotel management industry, and highlighted the importance of scale for companies looking to achieve growth.

Speaking shortly before Glasgow-based Chardon Management was acquired by US giant Interstate Hotels and Resorts, his words now seem especially prescient.

Mr Campbell said: "We were built for growth, if you like, and they [Redefine] were ready to just to start investing in systems. It was good from that point of view.

"When we merged we did a small bit of rationalisation but we have only had about five or six redundancies. We did not have to do it in an aggressive manner."

Expanding on the benefits of the deal, Mr Campbell said there was little duplication in the operation of the two companies. He also said the locations of the properties each had under management were complementary.

Ten of the hotels brought to the table by Redefine were run as IHG franchises. With BDL already running hotels under IHG brands, including Holiday Inn Express, it meant the combined group became the second biggest IHG franchisee in the UK, with around 25 hotels under management.

Mr Campbell said linking up with Redefine also gave it a presence in London, which he described as a vital factor for attracting business.

With the dust now settling on the merger, Redefine BDL said there were various ways through which it was looking to realise further growth.

Its cash position means it is now able to take some "skin on the game" by acquiring small stakes in the hotels it manages. Its parent company is also looking to acquire at least one hotel per year, which he said would provide organic growth.

As for extending its geographical reach Mr Campbell noted the firm was well-placed to broaden its presence in Africa, given that it already manages one hotel in Liberia and one in South Africa as a result of the Redefine tie-up. While he expects Africa to be a difficult market to crack, he said Redefine stood as good a chance as any when it came to making its mark on the continent.

Mr Campbell said: "All the big brands want to get into Africa - the Hiltons, the Best Westerns - they all want to have a presence in there.

"The fact we have got a South African plc that has worked in these areas and we already have two hotels , one in Cape Town and one in Monrovia, [means] we are ideally placed for that."

Closer to home, he revealed aspirations to expand into mainland Europe for the first time, and highlighted the firm's relationships with major hotel brands as being key to its ambitions.

Mr Campbell said: "We literally cover the length and breadth of the UK, from Shetland in the north to St Helier on Jersey in the south. But we are keen to get into Europe and ideally we'd do that through a portfolio.

"It is difficult to take over one hotel in Paris and one hotel in Berlin: we would want a portfolio of four or five hotels.

"There are a few opportunities that could make that a possibility.

"Our vision is to be at circa 100 hotels under management by 2016. The locations will still be majority UK, hopefully mainland Europe and probably Africa."

One of Redefine's latest ventures has been to build and manage a hotel in Shetland, a property that is owned ultimately by Mr Campbell and some former BDL directors.

The boss of Redefine BDL has invested in a new holding company, BDL Shetland, that has developed the Moorfield Hotel at Brae. His fellow investors are Stewart McCaffer, the former chairman of BDL hotels, Ross Morrow, David Thomson and the estate of Louis Woodcock.

Designed primarily to accommodate workers at Total's new gas plant at Sullom Voe, it is expected to have 100% occupancy during its first year of operation.

Mr Campbell said it was the first fully modular hotel Redefine BDL had developed, with each of its 100 bedrooms fabricated by McAleer & Rushe in Northern Ireland, before being shipped to Shetland.

The decision was taken to avoid weather disruptions to the project.

The hotel comes amid what Mr Campbells described as a discernible buzz around the North Sea oil and gas sector.

He noted: "It is a 100-bedroom hotel and has been done [in a way that is] very sympathetic to the environment. I think the whole Sullom Voe plant Total are doing is going to give a massive boost to the Shetland economy and it is great to be part of it.

"It was a great project for us. For all the development risks, all the contracts we had to do and the banking, there was a phenomenal amount of work that went into it. But through hard work it has all gone really well."

In other deals completed in the short spell since the Redefine merger, the company has taken on a Holiday Inn Express in Folkestone, a Best Western at Beamish Hall in Newcastle, and a former Travelodge at Manchester Airport that will be refurbished and rebranded in the next six months. It is also looking to add a further two to the portfolio around October.

Mr Campbell said: "The PR around the merger has brought a look of opportunities. [We are] particularly looking at portfolios of five, 10, 15 hotels and they take a lot longer to get to fruition.

"If we take over 10 hotels in a day that is a massive step change - you have to suddenly employ more people and have got a whole structure.

"That is the real thing we want to try and focus on in the next six to 12 months."

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