Hotel group checks out ‘secondary’ cities as bosses eye UK expansion

Angela Vickers’ comments came as the Edinburgh-headquartered group posted an increase in turnover and a 51 per cent surge in profits driven by a first full-year contribution from its Apex City of

Bath Hotel.

The £50 million complex, which includes conference facilities for up to 400 people, performed “particularly well for conference and events in its first year of trading”.

Asked about future expansion plans, Ms Vickers noted markets such as Edinburgh, Glasgow, Manchester, and London have seen many new hotel developments in the last couple of years. Smaller cities such as Oxford and Cambridge – where there is less competition and a good mix of business and leisure travellers – now look the

most promising.

“A lot of the big city centres are now pretty well supported with hotels,” she said. “Probably the easier question to answer is which locations we would

not consider.”

For the financial year to April 2019, Apex posted a 9.5% rise in turnover to £75.5m, with more than 465,500 rooms sold across its 10-strong portfolio.

That 5.5% increase in rooms sold was accompanied by a 2.4% rise in revenue per available room (RevPAR).

Pre-tax profits jumped to £11.8m against £7.8m previously. This came after the deduction of a £995,000 contribution to the Ross Development Trust.

The trust is a registered charity formed for the purpose of regenerating Princes Street Gardens in Edinburgh.

Norman Springford – who opened the first Apex Hotel in Edinburgh 1996, and remains a major shareholder in the business – is chairman of Ross Development’s board of trustees.

Apex continued its programme of refurbishment of older properties during the year to 2019, with its Temple Court (London), City of London, and Waterloo Place (Edinburgh) hotels receiving a total investment of £9m. That took the total spent during the last two years

to £17.6m.

A 20-room extension at Temple Court, including luxury suites, meeting rooms, and a wine bar, brought in additional revenue to bolster the maiden contribution from Apex City of Bath.

Ms Vickers said trading in the current financial year has been a bit of a “rollercoaster ride” as customer demand rises and falls with consumer sentiment driven by political events.

The UK’s looming departure from the EU has raised concerns within Apex about staffing levels, particularly among its housekeeping staff in London. The group is attempting to soften any blow through employee engagement and apprenticeship programmes as a way of retaining staff.

“Despite what we do, there will be an increase in churn, because this is an issue that affects everybody in the industry,” she said. “It is a fact that there will be a skills shortage.”

Apex employs a total of more than 1,000 people, with EU nationals representing 49% of staff across the group. In London, however, this figure is closer to 80%.

In spite of these issues, the company is continuing its programme of investment, with refurbishment continuing at its City Quay Hotel and Spa in Dundee. The phased programme of works started with bedroom refurbishments followed by the restaurant area, which was completed before the rush of Christmas trading.

A further £1m of work is now under way within the reception, spa, and gym areas, and is expected to be completed before the end of the current

financial year.

Ms Vickers said these refurbishments underpin Apex’s success.

“Over the past year, we have delivered on our capital investment programme to upgrade the portfolio,” she said. “We are delighted to see this has resulted in a strong performance across the financial year, and demonstrates our continued commitment to providing modern facilities and the best possible experience for our guests.”

The accounts lodged with Companies House show that the highest-paid director received £180,000 in remuneration during the year to 2019.

The highest-paid director received £153,000 last time.