Quick Q&A: Robert Crook, managing director UK, Interstate Hotels

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The US-based global hotel management company burst onto the UK scene with the 2013 acquisitions of Sanguine Hospitality, and Crook's previous company Chardon Management, creating a dedicated base of operations in the region for hotel owners and investors.

Q:  When compared with the US, Europe has a relatively low, but fast growing, percentage of branded hotels. Do you think we are moving to a more American scenario?
A: Yes, we expect the appetite for branded hotels to continue - of the 38 hotels we currently operate, only four are non-branded. The exception being France, the country doesn't have the appetite for branded hotels. Banks also like the reassurance of knowing a hotel is branded (than not) when applying lending criteria and so there's a natural bias towards branded expansion.

Q: What are the operating challenges of a non-branded independent hotel when compared with a branded property with a clearly defined set of brand standards?
A: We have both non-branded and branded within the portfolio and it's ultimately about system delivery: reservations, website, global distribution system, central reservations, having a connected approach to ota's for example. The majority of our franchises are located in the provinces where a large proportion of business is domestic, unsurprisingly. The loyalty schemes amongst the brands do help increase occupancy. However, branded hotels are not necessarily the right option all the time. We operate a hotel in Derry and recently spent a lot of time assessing whether it would be beneficial to brand or continue operating as a non-branded hotel when taking revenue and costs into consideration. We looked at the hotel's position in the market, rate, revenue and property improvement plan and decided the hotel wouldn't benefit from a flag. Another example is our hotel at Drayton Manor theme park which relies hugely on theme park marketing to drive occupancy, it wouldn't make financial sense to brand this hotel either.  

Q: What trends are you witnessing in the budget/economy sector in terms of design, service levels and operation?
A: There's been a raising of standards within the industry generally. When you look at design - bedrooms are a lot smaller, take the impact of technology on operational efficiency, there's less staff than in the past. There's definitely a squeeze on the mid-market sector too, and it's up to us to deliver more fresh innovation within the sector.

Q: What plans does Interstate have for expanding in to new European markets?
A: Future expansion will be deal dependent. We're already in Amsterdam, Belgium and in Sochi, Russia where we operate the most hotel beds of anybody. We would only expand on a pan-European basis as a third party operator. 

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