GLASGOW-based hotels company BDL aims to hike the number of properties in its portfolio from 46 to more than 60 by the end of 2012, having already doubled the scale of its operations since the onset of recession in 2008.

 

The expansion plans of BDL, which now operates hotels that have an annual turnover totalling between £125m and £130m and together employ about 2500 people, were revealed to The Herald by BDL co-founder Louis Woodcock. Mr Woodcock founded BDL with fellow industry veteran David Thompson in 1997.

BDL has, during the economic troubles of the last few years, bucked the recessionary trend and expanded the number of hotels in its portfolio partly as a result of taking on contracts to manage properties on behalf of banks. Mr Woodcock hopes to win more management contracts from the banks, as well as from other hotel sector investors, and sees renewed potential for limited development of new hotels.

He said BDL has in recent times won contracts to run hotels for institutions including Royal Bank of Scotland, Lloyds Banking Group subsidiary Bank of Scotland, Anglo Irish Bank, and Clydesdale Bank.

Mr Woodcock highlighted BDL’s decision, amid the global credit crisis and onset of recession in 2008, to continue to pursue growth. With funds for building hotels having dried up amid the credit crunch, BDL took the decision to increase its focus on managing properties for others.

It has won contracts from banks in situations in which these lenders have ended up in control following the collapse of hotel companies, or where the previous operators have exited lease arrangements and “handed banks the keys”.

BDL also manages hotels for leisure giant Merlin, for the Jockey Club, and for wealthy individuals who wish to invest in hotels but have someone else run them.

The BDL team now has some ownership interest in 26 of the 46 hotels it runs. The other 20 are solely on management contracts.

Mr Woodcock, highlighting BDL’s growth in the last three years, said that the company was in 2008 responsible for operating about 23 hotels with some 1200 staff. The current £125m-plus combined turnover of the hotels run by BDL is up from about £65m to £70m in 2008. Referring to the number of hotels under BDL’s management, Mr Woodcock said: “We are about twice as many now as we were then. We would have been about 23 in 2008, We are now 46. I would like to be 60-plus by the end of next year.”

Such expansion could increase the number of employees working in BDL-managed properties by about 750, if the hotels taken on have a similar size mix to those in the existing portfolio.

BDL, which operates as a management company and does not employ the hotel staff directly, has hiked its own workforce from 25 to about 60 since 2008.

BDL’s own payroll includes specialists in internet marketing, property management, sales, revenue management, human resources, and information technology.

Mr Woodcock said: “In 2008, it was tough. We kind of knuckled down and got ourselves sorted out. At the same time, there were opportunities. There were two ways to go. You either cut your costs and tried to ride the storm or you accepted there was some opportunity and you expanded the size of your team. I think we took the second route, which is to try to grow through it and do a better job.”

Mr Woodcock, who spent much of his career with hotels company Queens Moat and created Adams Hotels with Mr Thompson before founding BDL, sees potential for the BDL team to develop one or two new hotels per year.

He also noted his business’s recent acquisition of Rosslea Hall Hotel at Rhu near Helensburgh, which it had been running for Anglo Irish Bank.

BDL operates eight properties in Scotland. These are the Point Hotel, Parliament House Hotel, and Princes Street Suites in Edinburgh, the Landmark in Dundee, the Ramada Encore in Inverness, the Rosslea Hall Hotel in Helensburgh, and Holiday Inn Express hotels in Greenock and Hamilton.

Another hotel under its management is the five-star, 123-bedroom Grand Hotel in Jersey. It runs the Holiday Inn Express at Epsom Downs racecourse on behalf of the Jockey Club.

As well as the Holiday Inn Express and Ramada Encore brands, it manages hotels under the main Holiday Inn and Ramada brands, as well as under the Crowne Plaza, Best Western, and BDL Select badges.

Mr Woodcock noted BDL had started out in 1997 with the plan of building hotels and eventually selling them on.

It had by late 2005 built a 20-strong hotel portfolio, and at that stage decided to sell 13 Holiday Inn Express-branded properties to Somerston Hotels. It then started building Ramada Encore-branded hotels. He said: “Clearly, in 2008, the crunch came. Frankly, there was no more money left within the banks to continue to develop hotels at the rate we were doing prior to that. The intention was to build 22 to 25 Encores.

“We got to six before the crunch came in 2008, and put the brakes on. In 2008, it was all a matter of retrench. Everyone was sorting themselves out. We started running more and more hotels for other people, building anything became a thing of the past.”

He added: “During 2009, we restructured BDL to be more outward-facing than inward-facing.”

Mr Woodcock noted that BDL was operating significantly more hotels in Scotland since it had switched its focus from developing new properties to taking on management contracts.

Commenting on BDL’s management of hotels on behalf of the banks which owned them, he said: “Clearly, some banks invested more in hotels than others. Frankly, the banks that invested more in hotels, we are running more hotels for. The banks that invested less in hotels, we are operating less for.”

He said BDL was running broadly equivalent numbers of hotels for Bank of Scotland, Royal Bank of Scotland, and Anglo Irish Bank.

On the economic backdrop, Mr Woodcock said: “The way the world is, it is pretty tough out there. It is not an easy place to live in. That is the same for a lot of businesses.”

Asked if he expected more contracts from the banks, he replied: “I think that will be the case.”

On the potential for BDL to develop new hotels, and acquire others, he said: “We do want to develop specific properties at a very slow rate. We might be doing one or two developments a year, if we are lucky. We want to grow and we want to buy some properties.”

BDL is owned by Mr Woodcock, fellow director Stuart McCaffer, and other board members, including now-retired Mr Thompson, a non-executive director.