Resident Hotels' David Orr talks success on TripAdvisor and the acquisition of Sleeperz

10 November 2022 by

The chief executive of Resident Hotels speaks about riding out turbulent times, finding success on TripAdvisor and the acquisition of Sleeperz

These are turbulent times – how is everything at Resident Hotels?

The thing that's good is that people seem to be very keen to be travelling and enjoying themselves and there's a sense of purpose again. But there is nevertheless an underlying concern about what other issues are emerging and, obviously, we're very mindful of looking after our teams. I know that across the whole of the hospitality spectrum there are many challenges. It's almost split into two areas: one being the headwinds you're facing as an operator, and the second the headwinds your consumer is facing.

How are you responding those headwinds?

There are an awful lot of things you can't influence and I think, being realistic, we can't influence the macro things, we can just respond.

I don't think being reactive is necessarily a lack of a strategy, it's just reacting quickly to whatever emergent situations there are.

As it happens, we are well hedged with our power and contracts, but equally, that's not 100% across everything, so there will be exposure. Like everyone else we're waiting to see what the government will be doing about the implementation of any scheme.

I think the main thing to do is support our own teams and our supply chain and keep our reputation high, so that in relative terms we're in a good position. Everyone has been through significant trauma over the past couple of years, with worries about personal health and mental welfare, so in a sense, a short-term approach is really to try to pull back as far as possible and to focus on the things we know we can influence and can do really well.

Is the business well-positioned in terms of reputation and proposition?

What we rely on is having very, very good teams who collaborate effectively with guests to ensure they enjoy staying in our hotels. That reputation has been built up. The positioning of Resident hotels as a high-reputation brand has been where we feel it gets the best alignment with guests appreciating and understanding what we do. It's very rich content, when you look at reviews, ratings or TripAdvisor rankings – they're evidence of how much appreciation there is. Pricing is obviously very dynamic, but if we weren't seen to be good value, you'd see that impact on our ratings.

For many operators TripAdvisor can be problematic, but you use it very effectively, with the group's hotels regularly taking the top spots in their areas. Can you tell us how that's achieved?

I think you either demonise these things or you think they're very useful for guests, provided the integrity of the platform is there. My personal view has always been that TripAdvisor reviews are not to be feared. When there are things to engage with, you do so.

I think I got an email from TripAdvisor saying I'd done the first management response in London, which would have been in 2003.

Our attitude is that when someone has economically engaged with you and then they go to the trouble of leaving a review of any nature, then it's entirely respectful and appropriate to engage with that. So I think these platforms have been incredibly helpful. If you really do take your reputation very seriously, then review sites are important to make sure you're overtly, consciously and deliberately responding to guest feedback, rather than burying it or denying it.

It also means the teams can see the direct results of all of those little thoughtful moments if they see that reflected in positive reviews. Because that thoughtfulness has been appreciated by guests, that's a virtuous circle.

Is it those personal details that translate to great hospitality?

With the Resident, we're not trying to do multiple things, we're very focused, so that means that the interactions are very personable – rather than personalised, in the way of a tech platform – it's personal, authentic engagement. The people who work in the teams are communicators; they are insiders with knowledge of the area and they like doing what they do.

This is an industry that has been through incredibly tough times, as have many, many guests, so I think it's a good opportunity to emphasise how much people can genuinely empathise within what is otherwise interpreted as a commercial environment. It's very much a human interaction. There's the ability to have a platform where empathy can feature as part of a brand and be authentic.

Are you continuing to look at expansion in light of the economic volatility we're seeing?

We are. We're under construction in Edinburgh and we've got other projects in London. I think that across the world people want to learn more, to travel, to experience new things, and in that context there are wonderful cities in the UK and in Europe where hospitality and hotel offerings of our nature could work well. Expansion is still very much part of our plans.

Tell me more about the opening of the Resident in Edinburgh

The property is immediately on the boundary between the New Town and the West End in Edinburgh. It had been an HM Revenue and Customs office, so it had been publicly owned but never publicly accessible in its whole life. We'll be retaining the structural frame of the building, so avoiding excessive carbon consumption, and repurposing it as a 164-bedroom hotel, which will open in February 2024, or thereabouts.

Hotels under the Resident brand don't have an F&B offering, so location must be crucial in determining where to expand. How do you pinpoint locations that can work?

Yes, the cities we are interested in are ones with broad economic, social and cultural shoulders. There needs to be lots of reasons to go there and potentially international access. We're interested in having the Resident in cities where there are great universities, businesses, theatres, bars and restaurants. Then we host people in those places and focus on making sure that, from their perspective, they have a home from home within a really interesting city, regardless of whether it's a business or leisure trip, mid-week or weekend.

Are the majority of your guests short-stay?

The average length of stay is three nights. We have small kitchens within the rooms so each has a level of self-sufficiency. It's not a cooking kitchen, but it is an assembly kitchen. We've got nice little collaborations, for example, we have Bottle Bar & Shop offering premixed cocktails and a grocery service, so before people arrive, we can go and get things for them. It makes it plausible that they stay a bit longer. I think the average length of stay for a competitor, without those services, is about 1.8 nights, so it's quite significant.

The business acquired a controlling stake in Sleeperz Hotels and sister brand Cityroomz this year, how does that fit into your plans?

The positioning and space of Sleeperz is very different to the Resident in terms of the offer. But clearly there's a lot to build on and what we're interested in doing is around the engagement with guests and bringing that into the premium budget space. I think we've got a lot to bring and I'm looking forward to it.

How will the Resident and Sleeperz coexist? Will they open in the same cities?

The brands are very different. The underlying philosophy is that we've got to build trust with the teams within Sleeperz and within the Resident and that's always work in progress. So yes, both brands – actually all three brands – can exist in the same cities, because they are very different in their proposition to the guest. I think also that Sleeperz and Cityroomz can go into cities the Resident can't.

They're all very interesting hotels and I think it's good to explore the opportunities with two very distinct brands. And as we build the reputation of both that underpins the growth strategy.

How are you planning to address the cost of living crisis for your teams?

There are multiple ways that support can manifest itself, but I think communication is an important one. I don't think we'll be announcing publicly the choices we make – we'll be speaking to our teams.

To have people in a happy situation at work is obviously fundamental, so whatever we do, it'll be a bilateral conversation within the business. It will be a thoughtful approach, recognising the challenges people face.

About David Orr

Orr was co-founder and chief executive of City Inn, which was founded in Edinburgh in 1995 and rebranded as Mint Hotels in 2010.

By the time the business was sold to Blackstone for more than £628m in 2011, it had over 2,700 rooms and 2,000 team members.

Through the 2010s Orr focused on individual projects through his joint business with Taco Van Heusden, Urbanist Hotels. These have included the now abandoned Rosewood Hotel proposal in Edinburgh. David also led a project at Eurostar. In March 2018, David took over as chief executive at Resident Hotels.

Resident Hotels

Resident Hotels was founded in 2006 by Robert Nadler as Base2Stay, principally owned by the Mactaggart family. It later changed its names to Nadler Hotels, rebranding again to the Resident in 2020, two years after Robert Nadler left the business.

The brand includes five UK hotels in Kensington, London; Liverpool; Soho, London; Victoria, London and Covent Garden, London. A sixth hotel in Edinburgh is expected to open in 2024.

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