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Home / Latest News / The way ahead for Cardiff’s hotel sector in the face of growing competition

The way ahead for Cardiff’s hotel sector in the face of growing competition

George Bernard Shaw once observed that the advantage of a hotel is that it is a refuge from home life.

Shaw’s dark Dublin humour finds resonance with his compatriot, Galway-born Margaret Waters, general manager of Cardiff’s Park Plaza Hotel and the city’s longest serving hotelier.

Since her arrival in Wales on the eve of the 2000 Rugby World Cup Mrs Waters has managed the former Jury’s hotel, before moving to the Marriott in Swansea and then returning to Cardiff two years ago.

Now she presides over one of the city’s leading hotels and, judging by the popularity of the bar and dining room at lunchtime, Shaw’s observation carries an element of truth.

The latest figures from accountancy and business advisory firm BDO have shown Cardiff enjoyed a 4.4% rise in average daily room rates which leads her to say: “We are not seasonal businesses. As city centre hoteliers we look at quarters and the first quarter of 2013 was good for business thanks to help from the weather.

“March on the other hand had its share of bad weather and having snow didn’t help.

“The second quarter particularly June, however saw double digit growth.”

She added: “It’s easy to look at one month and think its positive news but overall the second quarter was still quite flat.”

The first six months of the year, she explained, had been helped by the events in the city and having cricket’s ICC Champions Trophy in June was a major plus for hoteliers following the Six Nations rugby internationals and concerts staged at the Millennium Stadium featuring attractions like Rhianna and more recently Bruce Springsteen.

Although mindful of her Irish antecedents, home for Mrs Waters is now Cardiff and its the Welsh capital her thoughts are focused on.

Reflecting on her 14 years in the city she said: “The leisure business has grown during this time led by the St David’s Shopping Centre and the Dr Who Exhibition, which has been a bonus and Cardiff itself has never looked so good.”

There is, however, a downside to all this as she explains. “We have found that weekend business can be just Saturday nights. Sundays are not strong, which is the same in most cities but the weekend leisure business is steady and we have seen some growth. The biggest concern for me, as a hotelier, is the lack of corporate business midweek.”

In this respect, having so many extra city centre hotels creates a greater degree of competition and the lack of growth in the corporate midweek business has caused concern, leading to much lower rates being offered.

This, Ms Waters points out, is good for the customer but doesn’t attract more corporate business nor is it good for growth in the hotel sector.

She said: “It’s certainly not good for owners who need a return on their investment and if the rates keep dropping that investment both current and future must be in jeopardy.”

Then comes the siren warning. “As a city we are at risk of having many hotels – many that haven’t had investment for some time. When it comes to disposable income, many businesses have cut back and restricted the use of higher quality, higher priced hotels and this has had a negative effect on the average rate we charge.

“We should be able to appeal to companies coming into the city because of the availability of excellent rates. If we compare ourselves to Bristol, where hotels can command a rate of up to £15 higher a night than here, this makes Cardiff very good value for money.”

From this perspective her belief is the city’s hotels are too dependent on events coming into the city and for many years there have been few new ones.

She said: “Cardiff, as a capital city, shouldn’t depend on events. We should be able to drive our business while attracting new business into the city. This would help restaurants and bars while those shops in the St David’s shopping centre play an important part in attracting new businesses to sustain that expenditure.”

Access has, she believes, always been an issue with the perceived distance between London and Cardiff being a major factor in this.

Though only two hours away, Cardiff is still regarded as being far from London and London is currently enjoying an amazing year with June and July matching last year’s Olympic Games.

On the purchase of Cardiff Airport by the Welsh Government, Margaret hopes it will herald a more efficiently run operation making it attractive for companies to fly here – opening Europe to Cardiff and increasing the possibilities of increased inward investment.

This, she said, is something of a perennial problem as is that of a convention centre – the missing link in the city’s infrastructure chain.

With confidence born of empiricism she said: “Cardiff is ready to increase its capacity and open up to world trade if we could only get people here to experience Welsh hospitality.”

She added: “Since 1999 the city has been discussing the need for a convention centre and it’s unfortunate that to date we have received no confirmation of when or where its going to happen and yet the city is crying out for this.

“We have enough hotels, restaurants, bars, and shops to cater for large conventions. It’s safe to say that until we announce a convention centre, Cardiff, as a capital city, falls behind other much less attractive cities.”

There is, she acknowledges, a debate as to where it should be sited.

She said: “We have seen how successful the Millennium Stadium has been in staging major sporting events. The biggest positive is its location and that’s because of its proximity to the city centre, making visitors aware of the immediate environment.”

Location she emphasised is, critical and needs to be close to the bus and train stations with easy access from the airport.

“Its all a question of infrastructure that matches the expectations,” she added.

“Research conducted in Edinburgh and Glasgow has shown that convention centres have a positive impact and drive not just convention business but also business in general by attracting to these cities companies that would not previously have considered them as venues.”

Her subtext is one of image enhancement, increasing the profile of an already vibrant and fashionable city, soon to be exposed to Premiership soccer with Cardiff City that will generate an extra revenue stream for commerce and the leisure industry in particular.

For such a project to be undertaken anywhere but Cardiff she argues would be disastrous and certainly not an option.

Having said that, she returns to an earlier point raised which is that “the midweek corporate gap remains.”

 To this is added the rider that Wales is not emerging from the recession as quickly as she would have wished, despite more people taking more short UK breaks.

Such a market has to be catered for and this raises the question of skilled labour and attracting young people into the catering industry.

I remind her that when she came to Cardiff in 1999 there was no problem in generating sales. It was Rugby World Cup year and several prestigious conferences had been organised on the back of the major sporting event.

At that time recruitment was difficult but since then there has been a radical change in both quality and quantity of young people being attracted to the industry.

She said: “It’s fair to say that our industry has been poorly perceived by both public and young people. The reality is it now presents career opportunities unrivalled in other fields.” Bringing this down to a personal level she added: “I was 24 when I became a general manager and I don’t know many careers where you can attain managerial status at such a young age.

“With new legislation and the realisation that staff need training, colleges in the area have done much in this respect, so skills shortages are not a problem.”

Into this equation she adds the European factor, those who come to and are trained in Wales.

It is, she believes, important that the hospitality business attracts a European element and in her team are two senior managers from Eastern Europe.

As to the future, the evolutionary process will continue and visitor numbers increase.

Training, even in difficult times, remains important with investment still a priority. Her clarion call is “be ready when this happens.”

In the meantime customer satisfaction, competition awareness, especially that from outside Wales, remains her preoccupation and to this can be added her thoughts on the role of Cardiff Council and Welsh Government must play in attracting businesses to Wales.

“The perception of where Cardiff sits in relation to London and other UK regional centres must change,” she said.

“The whole infrastructure question is important and in the coming decade we should have an even better city once the council and Welsh Government work together to attract businesses here. Our role as hoteliers is to provide people to look after them and exceed their expectation.”

As George Bernard Shaw of Dublin might have observed, Margaret Waters of Galway is doing just that.

 

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