RBH celebrates end of 2021 with significant utilities savings and strong portfolio performance
RBH Hospitality Management ended 2021 on a positive note, including three new openings, improved commercial performance across the portfolio and significant annual savings of £3.5m for long-term hotel gas and electric contracts through its bold and proactive procurement strategy.
While wholesale energy costs reached a historical 10-year low, predominantly driven by the pandemic, RBH undertook a utilities project to re-tender its gas and electric contracts well in advance of existing contract renewal dates. In anticipation of the drastic cost increases seen in recent months and UK inflation at 4.2%, RBH’s procurement team sought new long-term deals to lock in significantly lower prices ahead of the spike. As a result, savings made on behalf of hotel owners have materialised to 300-400% or £3.5m per annum.
The management company celebrates further success following a positive Q4 which saw ADR recovering at a fast pace across the portfolio of UK hotels. It also continued to successfully maintain its average group-wide RGI of 110, exceeding both target and pre-pandemic performance levels despite the emergence of the Omicron variant.
Strong performances have continued to be generated in the provinces, such as Crowne Plaza Reading, Holiday Inn Express Middlesbrough, Holiday Inn Express Cheltenham, Holiday Inn Express Southampton, Holiday Inn Express Dunstable, Holiday Inn Express St Albans and Hotel Indigo Cardiff, achieving upwards of 75% occupancy. The success of which have been greatly supported by groups-based business secured through the RBH Sales channels who have seen a 35% growth in new business since Q3, including in cities such as Liverpool and Glasgow.
Andrew Secker, Group Director of Sales said:
"The RBH Sales teams have continued to forward plan, increasing business on the books through project, group and leisure base, securing base business where required through until 2023."
Looking to 2022, Andrew Farrow, Group Director of Marketing said:
"It’s key that we continue to build upon the strong commercial performance of 2021, utilising all channels available to us. This includes continuing to increase our portfolio’s social media engagement which grew by 150% in 2021 from an already strong base."
Edinburgh has also proven to be a strong market, with the Doubletree by Hilton Edinburgh City Centre in particular, which has continued to grow its market share month on month.
Although the London market has seen slower recovery, RBH has seen exceptional market performance from properties such as Hampton by Hilton Docklands and Hampton by Hilton Gatwick – both of which exceeded 150 in RGI, as well as Holiday Inn Camden Lock and Holiday Inn Express Limehouse which have sustained strong market share through the pandemic and continue to hold market position.
With three new hotel openings this quarter and the creation of one entirely new hotel brand, Pocotel, the RBH Commercial teams have successfully secured significant business for the new portfolio additions. The opening of The Gantry London, Curio Collection by Hilton and The Westin London City, marks RBH’s further expansion into the luxury hotel market, ending the year with almost 10% more hotels under management than they did at the end of 2020, and with further openings in the pipeline for 2022.
Commenting on RBH’s Q4 performance, Stuart Houston, Finance Director said:
“Our core target in recent months has been to continually deliver value to our partners and hotel owners despite this challenging year. The significant utilities savings have certainly proved invaluable at a time when many are suffering from staggering rises in supplier costs. The importance of proactive procurement has been effectively demonstrated and the timing could not have been better to lock in astounding savings for the coming years. This has undoubtedly helped to ease the pressures on costs elsewhere to cover staffing, F&B and linen supplies in particular. If we had waited until the contracts were up for renewal, our owners would be facing significantly different gas and electric bills.”
David Hart, RBH’s CEO said:
“In a time of continued adversity, the brave and innovative thinking of all departments has been exceptional. To see commercial successes this quarter not only outperforming 2020, but 2019 too is remarkable. And this could not be done without our team of hotel experts, whose average length of service is 7 years, showcasing the stability of our company. Three new hotel openings in just two months is no easy task and although the difficulties facing the hospitality industry are by no means over, we have been hugely encouraged by the hotels’ performance in the past three months.”
The year ended on a high for the third-party management company, culminating in its first Owners Conference hosted at the newly opened Westin London City, with guest speakers from Deloitte, Savills, STR and HotStats, a further sign that they continue to be optimistic about the year ahead.
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