Business profile: Premier Inn

19 September 2014 by
Business profile: Premier Inn

Janet Harmer speaks to the group's chief operating officer John Forrest and head of business development Jacqui Allum on maintaining the momentum for the company's growth

John Forrest leaves no stone unturned as he tours one of the latest properties to join what is now the 677-strong portfolio of Premier Inn hotels. This time he is in Hackney, London. The week before it was Wigan and the following week will be Glasgow.

Wherever in the country the latest hotel is being launched - at an average rate of about one every 10 days - Forrest, who has been chief operating officer of the group since 2011, will be there. At each hotel, he carries out a thorough audit of the property, from the external signage - via every nook and cranny, back of house - through to the bedrooms and public areas. Often accompanied by his wife and two sons, he will then stay the night to road test the hotel as a guest.

Described by a former employee of Whitbread, parent company of the hotel brand, as "the heart and soul of Premier Inn", Forrest is totally focused on ensuring every new opening will live up to the brand's pledge of 'a good night's sleep guaranteed'. A guest who does not sleep well is entitled to claim a full refund.
"Our purpose is to make the guests feel brilliant after staying with us; it's therefore important I make sure everything is in place to make this happen," explains Forrest.

Back to the inspection, Forrest, accompanied by Jacqui Allum, head of business development at Premier Inn, and Laura Evans, senior new openings manager (south), tours the perimeter of the Hackney property, checking on the provision of a bike room as part of the company's green travel strategy to encourage more staff to cycle to work and that every­thing is in order in the plant room - from ensuring the gas safety valve is correctly marked to confirming there are no combustible materials lying around.

Returning back inside the 90-bedroom hotel, Forrest approves the black and white graphics of local landmarks the Hackney Empire and Victoria Park in the entrance lobby; ensures all security monitors are visible for the receptionist, while being beyond the sight line of guests; and spot-checks the toilets.
Upstairs, Forrest looks closely at every aspect of the bedrooms and bathrooms which will impact the comfort and enjoyment of a guest, checking they meet the required brand standards. In one of the bedrooms, he checks over the Hypnos bed, designed with 1,200 individual pocket coil springs and an integrated topper to Premier Inn's specifications and first introduced into all new hotels 18 months ago; the hollow fibre pillows and duvets, also unique to the brand; and the blackout curtains to ensure they don't let in light.

Even what appears to be the most mundane aspects of the design and fittings of the room do not escape Forrest's attention. He peers in the kettle to check it is empty, opens the wardrobe to count that there are six hangers in place, and checks that the noise excluder on the bedroom door blocks out any sounds from the corridor.
Although he never takes anything for granted, Forrest is confident about the product. "That is why we are more than happy to leave a card on the foot of every bed with the mobile number of the cluster manager or operations director for the region," he explains. "They can be contacted at any time of the day or night, in case something is not up to scratch, and someone will come and fix it."

Back downstairs, Forrest conducts a thorough survey back of house - the laundry, team, store and plant rooms - even checking there is no fluff left in the tumble drier, which, he tells me is "one of the most common sources of fire".

Jacqui Allum and John Forrest at the Premier Inn, Holborn, London

State-of-the-art kitchen kit

On into the kitchen, Forrest observes the dominant piece of kit - a Rational SelfCooking- Center (SCC) Whitefficiency - in action. First introduced at its new Shrewsbury hotel 16 months ago, the ovens are proving to be a huge bonus by being both self-cleaning and energy-saving, which makes for a cool kitchen.

The six-grid version in Hackney enables the separate elements of a full English breakfast, comprising sausage, bacon, fried eggs, mushrooms, tomatoes and hash browns to be cooked together in nine and a half minutes, ensuring every order is consistent. Larger hotels will have more substantial versions of the oven. For instance, the 700-bedroom hotel at Gatwick Airport (the largest Premier Inn in the UK), operates two 10-grid Rational SCCs.

Ensuring that new properties are in perfect condition to join the Premier Inn portfolio is a key element of maintaining the brand as the market leader - both in terms of size and quality - in the rapidly growing and developing budget sector.

"The budget market has become slightly blurred, with different price points and facilities popping up, but we're very clear in what we offer - a great product at great value," says Forrest. "We provide everything the guests need for a good night's sleep and good food and beverage.

"We constantly invest to be successful - in both new and existing properties - and we believe all the investment goes in the right place," he adds.

The opening logistics

To help Premier Inn identify viable sites for new hotels, its commercial team undertakes a review every 18 to 24 months of its network plan, which generally has around 500 potential locations highlighted across the UK. The team analyses the performance of a future hotel in a specific location using internal and external data, overlaid by information on the general economy and the supply of competitor hotels at every level, from budget through to luxury.

Derek Griffin, head of acquisitions, London, explains that it is a "very sophisticated and time-consuming" process, which has enabled the company to publish its forecast of having 78,000 rooms open by 2018. "That is not
a figure we just pluck out of the air," he adds.

The acquisitions team, together with Allum, will drill down into the specifics of a town and decide where a Premier Inn would be best located. A good location is one that is easily accessible and therefore close to transport hubs, as well as appealing to both business and leisure guests. In London, it doesn't necessarily have to be in a prime site. A back street, two blocks away from a major attraction is ideal as it is cheaper than a top spot.

Then it is a matter of looking at what is available and at what price, before deciding whether to negotiate on a deal. While the current portfolio of Premier Inns is heavily weighted in favour of freehold properties - around 75% - the same proportion of new deals are leasehold and developer-led, particularly in London, where land is so expensive.

Approval from the Premier Inn property board is required for each new hotel. "Consideration has to be given to a commercial assessment of the site, based on the expected revenue that can be achieved at different times of the week, against the rent that has to be paid," says Allum.

"If the development costs are going to be over £10m, the decision has to go to the Whitbread board. Once approved, the decision holds for about a year."

Alongside the freehold route, which gives Premier Inn control over every aspect of the development of either a new-build or conversion of an existing property, there is a variety of different leasehold options, which provide the company with different levels of involvement in the development of the site.

The quickest new opening is likely to occur on a freehold, greenfield site, where planning permission has been swiftly obtained, enabling the build and launch of a new hotel to take place within 12 months.

One of the most lengthy recent openings has been that of the 120-bedroom Premier Inn in Wandsworth, south London, which launched on 23 June. The Sainsbury's supermarket site and its adjacent car park was identified five years ago, before two years of negotiations ensued. It then took three years for the development by Harvest Partnership, a joint venture between Land Securities and Sainsbury's to be completed, which involved a new supermarket being built on the ground floor, with the hotel on three floors above. Premier Inn spent nearly £800,000
on developing the site and has an agreement to rent the premises for 20 years.

While there is almost no corner of the UK the Premier Inn team will not look at, Greater London remains a key focus, with plans to increase its current number of 8,500 rooms, across 55 hotels, up to nearly 20,000 rooms by 2018. Other target areas include Brighton, Newcastle, Oxford and Cambridge.

Local opposition

Planning permission can be challenging at times and hold up a development, but the creation of jobs within a new hotel is often a persuasive factor. Local opposition to a Premier Inn can lead to a hotel being turned down, as has happened in Lewes and Falmouth. "The main reason we get locals opposing a development is that they expect they will be disturbed by noisy deliveries and smokers outside the hotel, both of which we don't want ourselves as they make it difficult to provide a valid Good Night's Sleep guarantee," explains Allum.

Meanwhile, a new model for Premier Inn - the Hub, which will feature rooms measuring 11.4 sq m, compared with a standard 21.4 sq m room - will enable the group to establish itself in smaller city centre sites.

The first Hub will have 163 bedrooms and will open within a converted office block on St Martin's Lane, London, this autumn.
A further four are in the pipeline for London: Goodge Street (179 bedrooms), Great Tower Street (119 bedrooms), Spitalfields and King's Cross (408 bedrooms); while Edinburgh will see two launches in Rose Street (157 bedrooms) and Carltongate (131 bedrooms).

With so many openings in the pipeline - there are a further 10 planned before the end of the year in locations as diverse as Eastbourne, Haverfordwest and Manchester - Allum has a 24-strong team to co-ordinate the launches.

Evans is supported by four new openings managers, who look after all new hotels south of Milton Keynes; while her counterpart in the North, Dave Ingham works with three new openings managers. Kate Bond, senior new openings manager (training) heads a team of 11 trainers, with two staff at Whitbread's head office in Dunstable, providing administrative back-up.

For every opening, the team has to complete a list of 450 actions, from ensuring a postcode for the property is in place to recruiting the operations manager.

"We have built a team of new opening specialists who are charged with seamlessly delivering new hotels into our network," says Allum. "Every member is passionate, engaging and energetic, working relentlessly up and down the country with the operations and functional teams to bring each new hotel to life.

"The process is a well-oiled one, which has been refined over many years and ensures that we deliver a great product every time.

"We have a phrase we often use when we look at our ever-growing programme - we say we make the 'impossible inevitable'."

Programme of refurbishment

Looking after existing hotels is just as important as ensuring that every new property is up to scratch. Hence, spending on maintenance and repairs at existing Premier Inn hotels is ongoing, with £80m being invested this year alone on refurbishing 15,000 bedrooms, transforming 20 reception areas and undertaking a complete refurbishment of the Thyme restaurant brand, which is now located in 110 hotels.

To ensure that no property falls below an acceptable standard, a 12-year maintenance programme is in place, with each hotel - no matter what size or where it is located - being painted and decorated throughout every three years. At the six-year point, all beds and soft furnishings are also replaced; and in the 12th year, the building is stripped back to basics, undergoing a total refurbishment at a cost of £10,000 per room. The 220-bedroom Premier Inn Aberdeen, for instance, recently completed a 12-year overhaul, costing £2.3m.

This year will see around 3,500 bedrooms being completely renewed. Depending on the size of the hotel, a total refurbishment can take around four to five months, working at an average rate of 14 bedrooms per fortnight.

As well as providing a refresh, the 12-year programme also enables any specific improvements that need to be made to a site, such as the reconfiguration of space in the public areas to make them more user-friendly and efficient.

"Hotels remain open during a refurbishment," explains Allum. "The trickiest part is to ensure there is never any compromise to a guest's experience in any way."
With the creation of a new design identity being an ongoing process, the entire portfolio of Premier Inns will never be totally consistent. The latest look, involving the design of the fixtures and fittings both in the public areas and bedrooms, is known as ID4 and was introduced into a new hotel in Bedford in early 2013. The product team is already researching ID5, a process that will take several years and will take into account guest research on ID4.

Premier Inn facts and figures

  • Parent companyWhitbread
  • Managing director Whitbread hotels and restaurants, Patrick Dempsey
  • Chief operating officer John Forrest
  • Hotels 677 (377 are located next to one of Whitbread's branded restaurants Beefeater Grill, Brewers Fayre, Table Table or Taybarns; 110 incorporate a Thyme restaurant)
  • Bedrooms 56,000+ (London 8,000)
  • Overseas Eight (677 bedrooms) in Abu Dhabi, Dubai and India
  • Staff 17,000 (including housekeepers who are outsourced in London to
ISS and WGC Services)
  • Largest hotel Gatwick Airport (700 bedrooms)
  • Smallest hotel Marlow and Twickenham (17 bedrooms each)
  • Revenue 2013/14 £967.9m (up 13.4%)
  • Profit £348.1m (up 11.2%)
  • Occupancy 87% (an all-time high figure, achieved during the 11 weeks to 14 August 2014)
  • Room rates £59-£60 average, ranging from special rates of £29 up to £200 at peak times in central London
    Share of UK hotel market 7.6% of a total of 682,000 bedrooms
  • Projected hotels by 2018 Around 900
  • Projected bedrooms by 2018 75,000
  • Projected share of UK hotel market by 2018 11% of a total of 700,000 bedrooms
  • Bookings 85% achieved digitally (77% Premier Inn website, 8% OTAs) and 15% via telephone and walk-in business
  • Social media standing 37,400 Twitter followers, 106,500 Facebook likes

Recruiting for new openings

Looking after an average, on a mid-week night, of 69,000 guests - a number that grows with every new hotel opening - it is paramount that Premier Inn is on top of its staffing levels.

A property of around 150 bedrooms will need 45 staff. The operations manager and food and beverage manager, who are the only two salaried staff, will be appointed 12 weeks prior to a new opening. They will work alongside a cluster manager, who is generally responsible for five to nine properties.

Most employees are selected with help from People 1st and Jobcentre Plus, often through recruitment days. Nine weeks before the Hackney opening, 40 jobseekers attended such an event, resulting in the recruitment of nine staff with a further five considered for future openings.

Four weeks out, the training programme gets under way, with the final week prior to opening devoted to practice runs attended by a team from head office, employees, friends and family. This is when Forrest visits and carries out his spot checks.

"We employ people who are engaging and have good values and motivation," says Allum. "We don't tend to take on people with a background of a full-service hotel as they tend to want to implement things we don't do. Someone who has worked in a fast-paced retail environment will usually have skills that can be transferred to Premier Inn."

The holding of community fundraising events prior to every opening not only establishes relationships with the locality, but also aids the bonding process between staff. In the run-up to the opening of the 180-bedroom, £9m Glasgow Pacific Quay (SECC) hotel, on 2 June, the team raised £1,200 for Great Ormond Street Hospital - Whitbread's adopted charity.

More than 80% of the 72-strong team at the Glasgow hotel were not working prior to their appointments, with the rest of the team being made up of Premier Inn employees who have been transferred and promoted.

There is generally no shortage of candidates coming forward for jobs. It is not unusual for 500 applications to be received for 20 to 40 positions at a new opening. Bath, where a Premier Inn opened in December 2013 and which has virtually no unemployment, has been the only location that was tricky to recruit for.

In total, around 1,200 new jobs are being created during the financial year 2014/15 to staff the 40 new hotels (4,500 bedrooms). Around 60% of these will be filled by 16 to 24-year-olds and the long-term unemployed.

"Staff are eager to join us as they can see there is a long-term career with Premier Inn due to our huge pipeline of openings," she says.

To find out more, visit

Believe in Young

With its intention of creating 8,000 new jobs in order to fulfil its target of opening 900 hotels by 2018, Premier Inn is working with bodies like Believe in Young People, which provides work experience opportunities and acts as a link between schools and employers.

Sarah Blyth, a former student at Havering Sixth Form College, undertook a work placement at Premier Inn Rainham, Essex, where she tried everything from manning reception to working in housekeeping.

"Dealing with guests was a challenge for me because I wasn't very confident, but by
the end of my placement I overcame that and I think I managed really well," she says.

The experience proved to be an eye-opener and helped Blyth decide that a career in hospitality was right for her. As a result she applied to Premier Inn for an apprenticeship.

Stuart Pallister, Blyth's former careers tutor at Havering Sixth Form College, says: "Sarah was quiet and shy before she went for her work placement and it's incredible to see the effect the experience has had on her. Full credit to Believe in Young People and Premier Inn for helping her to tap into her talent and create a confident young budding professional."

Blyth is now working full-time at the Premier Inn in Rainham, where she is working towards progressing onto the management training programme.

"The work placement gave me the confidence I lacked and now I've started my career journey," she adds.

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