Small Talk
Oliver Heywood on the future of Flat Cap Hotels
Now, the group is set to open The Courthouse in Knutsford, having renovated the disused crown court into a 150-cover restaurant with plans for up to 50 bedrooms by 2018, and is poised to announce its third opening soon.
Flat Cap Hotels launched in 2014 with the 17th century property, The Vicarage Freehouse, beginning with the restaurant, followed by the opening of the boutique rooms in 2015. How did the business come about overall?
My father [Peter Heywood, former Cheshire hotel owner] has been a hotelier for 40 years, in the North West, and so was his father before him. It’s been pubs, restaurants and hotels for years, and they’ve always been about the North West.
My family lived and breathed hotels. I came to London eight years ago and worked at Edwardian Hotels for four years, at the Mayfair in Green Park, and then for the last four and a half years, I’ve been doing hotel investment for real estate firms.
In the meantime, my brother Dominic and my father and I had a chat, and said, we can see what’s happening in the South West and London, with the likes of the Lucky Onion, the Pig, the Hoxton. They’re all different cool and new brands, which have grown very quickly.
I said, no-one’s doing that sort of thing in the North West. Let’s take baby steps first, let’s do a pub. We bought it as derelict, put all our own cash into it, and then we got the lease on The Vicarage – again, a derelict site, closed for five years, and this is where our concept of a freehouse and rooms started to emerge and develop.
How did the idea for the brand itself, Flat Cap Hotels, come about?
I kept thinking, how can we create a brand; a niche? And we were drawing the logo for the pub, The White Lion, and we simply put a flat cap on the lion’s head, and thought, hold on – that works! My father also always wears a flat cap, so there’s quite an investment in the feeling.
And then it started to progress. I started thinking – what is our premise and our ethos? And it’s all about local jobs, local suppliers ‒ from the old miners in the coal fields to the farmers in the area – they would all wear flat caps. Some people asked, why the hell have you called your hotel group that? But, well, you’re not going to forget it. Also, flat caps are quite cool these days!
You are opening your second site fairly quickly, and are just about to announce the third site, and have secured over £250,000 private funding. What’s the next step for expansion?
We always had number two and three in the pipeline. The whole premise is to create five sites in the local area, all within a 50-mile radius, by 2019, at a rate of one site a year. The focus at the moment is to do properties in the north west and Cheshire, we’ve been contacted now to look at other cities nearby such as Chester. We’ve been having conversations about going into Leeds or Manchester too. We would be interested in those, but I’m not going to run before I can walk!
Why the focus on keeping it in that region?
Well, we know our own market very well. And we want to put our own stamp on things, and offer that home-away from home, family kind of feel. A lot of the interior design in our properties is inspired by stuff we’ve grown up with. I don’t really feel as if there is anyone doing what we’re doing in the North West ‒ like a day pub, hotel, country group, with strategic locations close to either in town centres, or close to chimney pots and motorways, as they say.
Why five sites by 2019?
Having five assets is strategic for us, and where we want to get to, and the opportunities we have on the table at the moment. We are open to discussions to groups on how we will expand, across the UK, and if it’s 10, 15, 20, who knows. What we’re doing now is setting up senior management who understand our vision.
Talking finances, you launched a crowdfunding campaign for £250,000 earlier this year - how did that go?
We actually received private investment in the end, to assist in the growth in the company, assist in opening The Courthouse, and more to come. We will be announcing number three and the others soon, with more investment to come. Because we received direct investment, the crowdfunding has been terminated. We chose not to carry on with it, although we could have done.
You’ve so far only focused on historic-style properties. Is that on purpose?
Yes, we’ve taken two developments that are effectively derelict, and they are amazing buildings. We like the fact that older buildings have a lot of history, and you can tell a story. Even though Flat Cap Hotels is kind of branded, the focus is still to take buildings with loads of character and heritage.I can say that they are long processes, and challenging. Challenging is a good word to describe it.
What’s the most difficult thing when repurposing an old building?
Well for example, you’re taking assets which might not even have electricity, or water, and you are trying to deliver something that is pretty unique. But I do think one of the reasons why our sites work is that we do it all ourselves; we don’t do third party contractors. We get to know our market and we know what we’re doing.
Your restaurants or dining rooms that you have, versus the number of bedrooms, are quite large (e.g. 150 covers, 20 bedrooms). Is that deliberate?
Yes, absolutely. The way we do it is to open up the food and beverage spaces first, to get them trading, and then the rooms come second. We want to make sure we’re getting it right. And we are food-led, food-focused, and we have 85% of guests that stay with us eat and dine at the restaurants and bars. We’re food-focused, it’s very much like The Pig and The Hoxton model. People come to use because of the quality of the food and beverages, but the rooms are then an attraction because they’re cool and quirky.
You’ve mentioned The Pig and The Hoxton – would you see them as competitors?
They are at the top of their game. We’d also love to draw comparisons with places such as the Artists Residence, Hotel du Vin – of course I would. We’re not trying to reinvent the wheel, but we are used throughout the week and we have a strong business and leisure focus. So even if you’re on business on a corporate account, you don’t feel like you’re staying in a branded hotel.
'Affordable luxury' seems to be the biggest thing that people are talking about now. Do you agree with that?
I think that is the most booming and fascinating sector of the hotel market. Call it what you want - budget boutique or affordable luxury or whatever - but that is the area of the market that we are positioning ourselves in. You're not having ridiculously priced bedrooms [Flat Cap Hotels’ rates begin at around £100], but you know that your food and beverage is very strong.
As someone with a family background in hospitality, what's your view on the state of the hotels industry right now?
It is certainly changing. I have a lot of ties down in London, and have a focus on the hotel investment market down here, throughout the whole of the UK, so if you look at growth of what's going on in say, Manchester - it's phenomenal at the moment and the supply is only increasing. Strong regional locations are doing phenomenally well, and there is an opportunity in affluent areas to pitch something that is slightly different.
People's mindset now means that they are prepared to drive to more rural locations, and if you advertise your food well and can serve your brand and market it in a proper way, people will come, and you can sell your rooms as well. It's almost a domino effect.
OTAs do get a lot of criticism, but some say the secret is to work 'with' them rather than wish they didn't exist. Is that your view?
Absolutely. I spent four and a half years with Radisson Edwardian, which is obviously a corporate four and five-star group, and I worked in restructuring and business development. And when you look at a company the size of that, you learn very quickly that you don't turn off the OTAs, you work with them. Yes, they will charge commission, but they're selling beds when you otherwise might not have sold them. It's always better to have a room full, but it has to be full at the right rate.
It's a balance. At the end of the day, you want to direct as much traffic as possible to your website. If you have OTAs, but also a great website with direct booking, then you'll be fine.
What about services such as Airbnb? What role do you think they have within the industry right now?
It's very hard to track how Airbnb is having an effect on the hotel market. It has opened up travel for a wider clientele, who perhaps otherwise would not have travelled the way they can today. For my sins as a hotelier, I have stayed with Airbnb. On the flip side though, when people go to an Airbnb their expectations are different. I think it attracts a completely different type of behaviour or guest. Airbnb is a fantastic platform and is great for the industry, because it's just about opening travel up.
Has it had an impact on the market? Of course it has, it is definitely a threat. But what I think will need to happen is a regulation, that gives Airbnb a classification.
I think time will tell with Airbnb. You can see why people do it.
You've previously described your business as 'unique' within the high street market. Could you clarify what you mean by that?
The Hoxtons and Pigs of this world have been able to establish themselves with a very F&B focus, and they have created something where you're attracted by that. Ours are similar, but we differentiate ourselves from other groups in that we're family-owned, and we work in our business day and night, and our properties are historical.
We take properties which have not been hotels in the past, or which have failed, and have been revamped, allowing people to see them in this form for the first time. Our model of operation, obviously, is not unique, but in those other ways, we're different.
What would you advise to independent hoteliers looking to make a success of the regional market?
That's a very broad question! But overall, I would advise hotels to not focus on just one section of the market - not just leisure or corporate. There are some other groups in the North West that do it very well, such as the Coaching Inn Group, or Eclectic Hotels. They're really unique in design, and very different.
Your facilities need to be used throughout the week - modern rooms, modern conference facilities...we design our rooms so that they are corporate in the facilities that they have, e.g. with sockets placed close to the bed, USB points, and free WiFi throughout.
