The news that the owners of the Montrose Hotel in Dublin plan to reopen it as a budget hotel, is no surprise. Budget hotels are a growing trend internationally. While brands such as Travelodge and Premier Inn are well known here, other names are perhaps less familiar. These include Sidorme in Spain, Group B&B in France & Germany and Omena in Finland. The London hotel market is set for a shake-up in August with the opening of the really low-cost Asian brand Tune Hotels at Westminster.
At the World Budget & Economy Hotels Congress last year, I listened with interest to Peter Haaber, CEO Zleep Hotels, a Danish budget hotel company. He said that average hourly pay for hotel staff in Denmark is DKK 125,00 (about €16.50 per hour).......and that does not include holiday pay and social welfare contributions etc. which add a further 20%! That's not all. The VAT rate is 25% and non-refundable for hotel and restaurant purchases.
Given recent reports and coverage, we could be forgiven for thinking that Ireland is the only country with a very hostile operating environment!
How then, does the business model work in Denmark?
The key said Peter, is to cut costs at the outset, copy 3 star hotel facilities and cut away unnecessary services and unused facilities. Install triple glazing & automatic light switches. Get energy certification, use it in marketing and purchase energy on long-term contracts. Route reservation calls for all properties to one central facility. Outsource housekeeping, property maintenance services, IT support and breakfast production.
I wonder if the Montrose might be the first to offer something similiar here?
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