Whiff of success

16 July 2004
Whiff of success

Cuaba Generosos and Davidoffs; Churchills and Coronas - there's something exotic and luxurious about a good cigar, and they're a natural fit in an industry which exists to pamper guests and cater for their every need. But keeping a well stocked humidor in your hotel needn't just be about offering choice: there's gold in them thar tobacco leaves.

Cigars have had something of a renaissance in recent years, with cigar bars like Che helping to bring them back into the mainstream, and hotels have been quick to pick up on this trend. But while most hotels appear to view cigars as a bit of an afterthought, some, such as the Hotel du Vin chain, have turned them into a nice little earner (see case study).

Often the direction comes from the top. Entrepreneur Peter de Savary has been smoking Cuban cigars since he was 17, and smokes "eight to 10 a day, every day". All his hotels since the first one opened in Cairo in 1976 have offered cigar smokers a warm welcome. De Savary's latest venture, Bovey Castle in Devon, is no exception, with its well equipped "cigar cave" offering an extensive selection.

De Savary occasionally offers high-rolling guests the chance to smoke a Cuban cigar from the oldest - and probably most expensive - collection in the world, dating from 1856. "But I only sell them to people I think are cigar aficionados," he says. "I don't sell them to just anyone who has $1,000 (£650)." And not all his cigars cost megabucks. "I can also offer you a damn good cigar for £15 too," he says.

While de Savary stresses that you have to be mindful of non-smokers, he says a lot of non-cigar-smoking guests enjoy the spectacle. "It's all a bit of a show, cutting the cigar, warming it, lighting it… and other guests enjoy seeing the ritual," he says.

More importantly for hoteliers, cigars offer a very good mark-up and can add a significant incremental revenue to the hotel's F&B over the year. De Savary buys directly from the importers and adds mark-ups of two to two-and-a-half times the price of the cigar.

A good way to boost sales and generate business in lean times is to offer cigar-related events. Cigar dinners and workshops have become increasingly popular in recent years.

One hotel which is actively looking at ways to boost cigar revenue through such means is the Bentley hotel in London's Kensington. Cigars sit well with the image of the Bentley, which was hailed as a shrine to opulence when it opened late last year.

The Bentley has a dark and cosy cigar lounge or "divan" with an in-built humidor stocking 22 kinds of cigars, along with a range of "very expensive" Cognacs, Armagnac and mature malts. The hotel also has a number of portable humidors. General manager Nick Davies says cigars are "a key area" and go well with guests' afternoon drinks or after a meal at the hotel's restaurant, 1880. The cigars are particularly popular with corporate guests with expense accounts, says Davies. The most expensive is £35, with an average price of about £15.

Before Christmas the Bentley plans to introduce a course of cigar tasting with whiskies. Another plan is to hold workshops for six with a tutor from its supplier, Hunters & Frankau, teaching attendees about different varieties and how to match cigars with drinks. "We aim to keep it small at first, so it's quite intimate, and then build it from there," Davies says.

As with most things in the hotel industry, to make a success out of cigars you need to work at it - and that means investment.

As de Savary puts it, you're not going to impress anyone with a couple of boxes of dried-up Cubans. And it's no use buying a humidor and keeping it well stocked with a wide range of smokes if there's no one around who can describe and recommend them to guests.

De Savary says that, in a sense, cigars are like wine as there are many different types and they can be sweet or bitter, dark or light, oily or dry. Having the equivalent of a sommelier for cigars on site is essential. It's all about providing the guest with a total experience.

A total experience is definitely on offer at the Lanesborough, on London's Hyde Park Corner, where there are humidors in all the bar and restaurant areas and guests can even request a humidor to be put in their room. Should they choose to leave their smoky room, guests can puff away on a pre-Castro Cuban in the sumptuous Library Bar, presided over by legendary bar manager Salvatore Calabrese.

But not all cigar offerings are pitched at the high end of the market. At the Scotsman in Edinburgh, where there's a humidor in both the brasserie and the fine-dining restaurant, Vermillion, guests have a choice of eight different cigars ranging from just £3 to £17.

General manager Jonathan Dawson explains that the aim is to stay in keeping with the brasserie offering, which is tailored towards low-spend, high-volume trade. And the cigars are particularly popular with American guests.

At about 50%, the mark-up is also lower than at other hotels, but even so the hotel manages to achieve £14,000 of turnover a year, resulting in a profit of £7,000.

"It's an offering that's good to have - the whole ethos of hotels is about offering choice," says Dawson.

Case study: Hotel du Vin Few hotel chains have embraced cigars with quite the gusto as the six-strong Hotel du Vin chain, which this year expects to make £220,000 of revenue from cigar sales on an outlay of about £100,000.

Co-founder Robin Hutson is convinced that a major reason for the company's success is down to the investment the company makes in staff training. Every year the company takes five or six members of staff to the Cigar Festival in Havana, and although it costs £1,000 a person, Hutson says that in terms of development and improved sales, it's "priceless".

That attitude of investment also extends to the equipment, and all the hotels apart from Winchester and Tunbridge Wells have walk-in humidors.

Paradoxically, Hutson believes that in recent years cigar sales have been helped by the anti-smoking lobby, as while cigarettes are viewed as "nasty" the odd cigar is generally deemed acceptable.

According to Hutson, cigars offer hoteliers a number of benefits. They take up little space; you don't need additional staff as you can train existing staff such as the sommelier or bar manager; and they promote cross-selling of other products such as spirits.

Once or twice a year Hotel du Vin holds cigar dinners where guests puff their way through about three-and-a-half feet of rolled-up leaves accompanied by carefully matched spirits and liqueurs. The company is also willing to put on workshops for small groups or individuals who wish to know more about the world of cigars.

About 70% of its cigar stock is Cuban, including some limited editions, with the rest coming from places such as Nicaragua, Honduras and the Dominican Republic. The most expensive sticks retail at about £50, although most are in the £10 to £20 bracket.

"We've made a substantial commitment to cigars and we're delighted with the incremental revenue," says Hutson.

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