SPECIAL REPORT
a slim staffing model with most service centralized .
Rates are property dependent , but McCall says its Lehman Locke asset in East London has been getting £ 300-400 a night at its peak .
But the booking model has evolved dramatically as the brand is evolving into more of a hybrid . What used to be a couple of thousand corporate transactions a year has evolved into 250,000 , requiring what McCall calls a rewiring of the business to yield more like a hotel . “ It will serve us well for a decade to come , but it ’ s quite painful because it ’ s a new enterprise architecture and a new hybrid hospitality revenue management discipline ,” he says . “ Hoteliers are used to looking at occupancy , rate and RevPAR . We do occupancy , rate , GOP and length of stay because length of stay drives GOP , even if your rates are lower .
So , we will sometimes turn down higher-rated business because it ’ s short stay and we ’ ll take lowerrated business because it ’ s longer stay and more GOP accretive . But traditional revenue management doesn ’ t work .”
Another challenge moving forward , McCall says , is inflation causing development cost increases , as well as supply chain delays . “ We must be quite conservative when we do our underwriting ,” he adds . Then there is awareness , especially when opening in new markets . “ We must build that commercial muscle from scratch , and as a centralized business that is a challenge . But most new entrants come across that problem ,” McCall states .
Culturally , McCall is concerned about maintaining distinctiveness in the face of scale . “ As we get bigger the tendency is to standardize , systematize , automate and build processes around everything , and it can strip the joy and the heart and the soul out of what it should be like ,” he admits . “ We fight very hard to maintain our identity and purpose , and that ’ s always a balance ... But too much order and control and you step away forever . So , that ’ s a very interesting tightrope to walk .”
In the end , though , McCall remains very enthusiastic about Locke because it has early-mover advantage , particularly when it takes so long to build an asset base . It could reach 40 hotels and more than 4,000 before others get started . “ We can get to a reasonable degree of scale , while others are still figuring it out ,” he concludes .
F & B space at Kingsland Locke in London
48 hotelsmag . com June 2022