Growing the UK’s £127bn hospitality industry is no mean feat
As the UK’s most experienced hospitality management company, Offering a complete in-house solution for hospitality investors, every day at RBH Hospitality Management is a busy one. From their qualified Capital Projects team, Facilities Management and full IT project and helpdesk support, David Hart CEO, leads his team to drive the business forwards in an ever changing landscape.
He takes some time to share his Secrets of Success with Business Matters …
What is the main problem you solve for your customers?
For hospitality investors we take on complete operational and commercial management of their hotels leaving them to focus on investment.
What made you start your business – did you want to rock the status quo or was it a gap in the hospitality marketplace that you could fill?
When RBH started out just over 20 years ago the model for hotel operation/management was starting to change. Previously hotels were operated by those that owned hotels themselves or the big brands. As brands began to focus a bit more on franchising to enable growth, then hotels began to attract more investment and often from those who had no interest in operating the hotel themselves or experience in doing so.
What are your brand values?
At RBH, we believe our team should always:
Act with integrity
Deliver operational excellence
Have the ambition to continuously improve
Show that we care
We are proud that our team and the hotel owners we work with share these values as they form the bedrock of our business. We have had the same values in place for around 12 years which we are also proud of and believe it indicates a consistency of mindset and culture that has helped make us the business we are today.
Do your values define your decision-making process?
Absolutely, and never more so than in the last few years as we dealt with the difficulties of Covid and more recent issues like the inflationary environment and cost of living crisis. As a business that has no assets other than the people that work here to provide our services, it is essential that Care and Integrity in particular are present in any decision making that impacts our team. I’m particularly proud of the way we worked with our team through Covid and see it as a real validation that our values are live in the business. From the Executive Committee down through the team, we do everything we can to ensure they form the basis of how we work.
Is team culture integral to your business?
As a people business, without our culture we really wouldn’t have a business that has been around for any length of time. Our culture is one of the key factors that differentiates us and is why any investor should work with us. The culture has of course adapted over time, but the fundamentals haven’t largely changed in 20 years, surviving through multiple CEOs and senior members of staff so it’s always been a crucial consideration in the recruitment process.
That said, we also have significant long service in the business (for what is a relatively young business in the grand scheme of things) with our Executive Committee having over 15 years’ service each on average and the business as a whole having more than 6 years’ service on average. This consistency shows that people do love working here, and in turn helps to keep the culture alive for the future.
What do you do to go the extra mile to show your team you appreciate them?
We’ve always tried to be a business that socialises well together, and I think that really helps with forming relationships internally. Whilst the wider world is now focused on flexible working to ensure they can retain staff, this is something we have being doing for as long as I can remember without needing to put a formal name to it and I think has long been a huge positive about working at RBH. I’d like to think that generally speaking, we empower our team to focus on the output of their work rather than the specific times or locations they are doing it in.
I know that when I was back in my first role at the company, 17 years ago, my boss and the then senior team, expected a lot in terms of quality output, but they were more than happy that I work in the way that suited me best which was perfect for me, and I think this is an approach that works for most people.
But we do regularly evaluate what else we can do for our teams to make RBH a great place to work. A few years ago, we created our internal health & wellbeing programme, ‘Tree of Life’, which commits us to supporting our people’s activeness, nutrition, mental fitness, social and financial wellbeing. I have loved seeing the programme grow and develop over the last few years and it has contributed to making RBH a great place to work.
In addition, open communication has always been important to us. We try to ensure that when we make significant decisions for the business that impact the team, we are as transparent as possible in what our decision-making process was. Whilst there will always be some things that we can’t fully share, we’ve always tried to inform the team on what our options were, why we discounted certain things, and why we have made the decision we have come to. We have found that this has tended to go down well and has helped ensure open lines of communication.
What’s your take on inflation and interest rates – are you going to pass that on to your customers or let your margins take a hit and reward customer loyalty in these tougher times?
Pricing in the hotel industry is generally very much market-driven which means that we don’t need to make a clear decision as such to just put our prices up by X because our costs have gone up by Y. We can only ever sell hotel rooms at a price that is essentially acceptable to the customers that are buying rooms in that specific market – we alone can’t charge more just because we want or need to. In practice this means that where the industry as a whole is seeing an increasing cost base, which is certainly the case at the moment, then every provider will in essence want to see selling prices rise and over time the markets will naturally then do so as we all need it to. In the short term it can be difficult as certain hotels may have more or less pressure than others so may keep prices lower to try and ensure they retain demand but over time this will move and catch up with the wider market. Of course, this also means that if the market wasn’t moving more widely then it would be extremely difficult to do much about pricing on our own which could cause profitability issues.
How often do you assess the data you pull in and address your KPIs and why?
Some KPIs are assessed daily, others weekly and others monthly or less regularly – it just depends on the specific KPI. As an example, optimal rooms revenue performance is critical for hotels and success relative to the local market is assessed daily (if not multiple times a day)A hotel bedroom is a perishable product in essence and if it isn’t sold for a night then you can never sell it again. Local markets are also changing so quickly that dynamic pricing throughout the day can be critical to a hotel’s success – a cancelled flight, bad weather and so on can mean a huge change in a particular hotel market at very short notice, making it essential to be close to the market.
Other KPIs, such as staff engagement, may be assessed less regularly as it is largely reviewed through employee surveys, which we naturally can only do periodically.
Is tech playing a much larger part in your day-to-day running of your company?
Very much so. We have always tried to be ahead of the industry in terms of tech – from being the first management company in the UK to introduce a comprehensive Business Intelligence system several years ago and trying to lead the way in how we provide information to our investor partners through the introduction of our online Owners’ Lounge.
At hotel level there is a constant battle to have the most efficient systems, with an ever-increasing desire to maximise integration capability. In addition, payroll is the largest cost in almost all hotels so inevitably there is a relentless focus on how tech can be used to streamline manual processes and make savings. However, we must always remember that as a management company, we are only as good as our people and the services they provide and relationships they form. Our hotels providing exceptional service to our guests is key to a successful hotel business and therefore we must always remember to strike a balance between tech/system efficiency and personal service.
What is your attitude to your competitors?
The hotel industry, and in particular the third-party management sphere which we work within, is a small industry – everyone pretty much knows everyone and we see each other at the same events regularly. We’re all very competitive and a number of the KPIs we look at in our business actively involve comparing ourselves to our competitors where we can, not just comparing our hotels to their local hotel competitors. We’re always interested in better understanding what service others are providing, how it varies to ours and how we can do better in order to stand out in an increasingly crowded space.
We think we sit in quite a unique position amongst our competitors based on our experience, scale and service offering but are constantly having to ensure that remains the case and that the areas where we believe we have competitive advantage don’t become eroded.
Do you have any advice for anyone starting out in business?
Work in a business where you’re genuinely interested in what the business does (i.e. the service it provides or the goods it produces). Although my background is as an accountant, working in hospitality made a huge difference to me as I love hotels and knowing how they work, getting to stay in them and working with so many different ones. It has always made my job fascinating, whatever level I’ve been at. It’s far easier getting up in the morning if your company is interesting to you.
It can be a lonely and pressured place to be as the lead decision maker of the business. What do you do to relax, recharge and hone your focus?
I have 4 young boys so fortunately don’t have any time to sit and worry about being lonely and not enough time to recharge! I love following a number of different sports such as golf and Formula 1 and in the last few years I’ve become slightly obsessed with Lego which I’ve found to be an excellent way to relax and just focus on something simple (even if my house is running out of space to store it all).
What is your company’s eco strategy?
This is another area that we believe we were focused on long before it became such a hot topic in the media and the industry more widely.
For a while now we’ve had our own “Giving Something Back” programme which focusses on our people, our communities and our environment. In terms of our commitment to the environment, we’ve had a specific environmental committee in place for several years and set targets in 6 key areas: water, energy, waste, the supply chain, travel, and buildings. Importantly, we are focused on the decarbonisation of our existing hotels, working with our partners to develop net-zero new build hotels, and increasing biodiversity across the areas we operate in.
We were proud to be the only management company to exhibit at COP26 in Glasgow in 2021 and our team is very passionate about the work we are doing to make hospitality more sustainable.
In 2023 our specific focus is on biodiversity and really reinforcing the environmental focus in the hearts and minds of our wider team as the pressures of inflation, competition and the fallout from Covid do what they can to distract us all.
What three things do you hope to have in place within the next 12 months?
We are currently working on a significant new commercial data project, as part of our Business Intelligence system, to further enhance the excellent work that our commercial teams do and drive our hotels to even more commercial success – which is expected to be completed this year.
We are also looking at some slightly different business models to complement the way we currently operate and contract, and the target is to sign hotels under some of those models this year.
Finally, Cyber Security has become an ever-increasing issue for the industry and our team are putting a specific focus this year on updating our infrastructure to cope and continue to protect ourselves and the investors we work with.
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Secrets of Success: David Hart, CEO, RBH Hospitality Management