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How a small luxury hotel can compete and thrive.

by Rajul on February 12, 2013

I recently met Mohamed Jajbhay, Revenue Director at the tiny Beaufort Hotel – a family-run business founded by his mother and father who apparently still exert a close influence just like proud homeowners.

I was keen to learn whether this type of property has a future in a market like London: luxurious and well-run but up against globally-recognised luxury brands and flamboyant “personality” boutique hotels.

And I also wanted to explore the lessons applicable for other small luxury hotels operating in equally-competitive markets.

Entering the hotel (which has just 29 rooms), I felt as though I had been invited into a proper London townhouse, with plush sofas, tasteful art and a reception desk so discreet you could easily miss it.

There were none of the traditional cues that remind you of being in a hotel like the bellboy, the hustle and bustle, the queue to check in and the piped music.  It felt instead as if you were visiting the posh home of a friend who happened to live round the corner from Harrods.

Book direct with The Beaufort at the best guaranteed rate

I started by asking Mohamed straight up: is there a future for small, traditional luxury hotels in a fashion-conscious metropolis like London?

“Definitely” he responded – “as long as they evolve.  There is a craving nowadays for a certain intimacy where the staff remember your name and guests feel completely at home.  But the expectations of luxury travellers are high so the product has to be top-notch too”.

The term “intimacy” sums up this competitive edge but I’d also suggest that “trust” is important and it cuts both ways.  It appears that in a hotel like this they trust their guests by providing a wealth of free amenities.  They do this for example with their bar (unlimited complimentary drinks for guests) which Mohamed assured me is pretty much always sensibly used.

Guests respond to the surroundings and tend to behave as if staying with friends.  This makes the experience of a hotel like The Beaufort similar to an upscale Airbnb stay.  There is no restaurant for example but the team’s encyclopaedic knowledge of the local dining scene more than compensates.

They also serve a luxury cream tea every afternoon free to guests, where most luxury hotels might exploit this as a pure moneyspinner.  This is again designed to reinforce the “home away from home” promise, which many hotels talk about while not resisting the temptation to add extra charges here and there, surely the antithesis of a genuine homely vibe.

Book direct with The Beaufort at the best guaranteed rate

This sort of generosity takes a certain amount of guts but is also about values, something I learned from a previous meeting with the legendary Geoffrey Gelardi who has been running The Lanesborough in Hyde Park along similar lines since its opening in 1991.

Mohamed’s father has been in the hotel business for 30 years and fell in love with this property at first sight in Autumn 2000.  The initial vision was to create the small luxury hotel that stands today, but it took no small amount of blood, sweat and tears to make this happen.

A major renovation was undertaken in 2006 to bring it up to the top tier of hotels in its upscale neighbourhood.  Actually Mohamed tells me that upgrades are an ongoing process, with little enhancements being made all the time.  He seems to view it like a diamond being given continuous polish.

Though in central London near a cluster of museums, shops and other attractions, the hotel’s residential square  is remarkably quiet.  This again reinforces the private residence feel – one of the hotel’s key USPs.

I asked Mohamed to summarise how a family-run hotel can compete with all the sexy new openings in London.  After all, with boutique brands springing up left, right and centre, isn’t it genuinely difficult for guests to distinguish between the different flavours on offer?

“We’re all about individuality and personalising the stay” says Mohamed.

This is certainly another competitive weapon which small hotels can deploy to their advantage in a way that larger hotels will find hard to replicate.

Book direct with The Beaufort at the best guaranteed rate

By making the stay as personal as possible, the guest will feel an emotional bond, particularly if the connection is later skilfully managed on social media.  This will in turn increase the likelihood of obtaining a repeat booking directly rather than via an online travel agent.

Individuality extends to the product too.  Each room at The Beaufort is decorated under the guidance of Mohamed’s parents (his mother also contributed the recipe for the homemade scones which are served warm from the oven to guests every day).   The decor is dominated by relaxing beiges and creams.  It also has one of the biggest private collections of English watercolour paintings in the UK, a further unique feature.

The Beaufort also employs one of London’s few female General Managers: Izabella Cousens.  She joined as a receptionist in 2001 and then rose up through the ranks to become GM in 2006, managing a close-knit team.

The hotel has a high staff retention rate – “in this hotel, guest interaction is everything, so we recruit on personality first, technical skills second” Mohamed confides.  This is another advantage which small hotels can exploit: make the service addictive and give guests a reason to pick up on their conversation with the same team member when they return.

Book direct with The Beaufort at the best guaranteed rate

Local knowledge here is a key skillset and not relegated to the concierge department as it may be in more corporate hotels (though there are exceptions like the Andaz London which trains staff to be local experts too).

I accidentally overhear a staff member expertly answer a guest’s request for a good local Thai restaurant – responding with the confidence of someone who knows his neighbourhood inside out.  The hotel can even arrange for takeaways to be delivered to guests’ rooms ranging from sandwiches to gourmet meals: this is again an example of putting the guest’s interest ahead of maximising the profit from this stay.

At The Beaufort and other small boutique hotels I’ve visited, the emphasis is on guest lifetime value (including repeat stays) rather than extracting the maximum monetary value from this visit here and now.

One might think that with all its free guest amenities, The Beaufort would charge a hefty premium; however, its rate is pretty much on a par with other hotels in Knightsbridge within the same category.  So the extras are delivered purely as value-added for the customer.

Guest segmentation is important for a hotel of this type, since its marketing budget has to target just the right profile to get a positive return.

Anyone who seeks a “buzzy” hotel with a busy cocktail bar (and prices to match) would probably go elsewhere.  But a place like The Beaufort delivers well for those who appreciate discretion, quiet, value and understated luxury delivered with a friendly smile and no nasty surprises on the bill.

Book direct with The Beaufort at the best guaranteed rate

I walked out of The Beaufort believing that small is beautiful.  Here are some lessons for the owners of other small luxury hotels:

  • Focus on your micro-location.  As a small hotel, your guests will have greater interaction with the same team, so ensure that they know their (local) onions.  Use social media like The Beaufort does to tweet about its immediate area and establish a point of difference versus big chains.
  • Build local partnerships.  The Beaufort’s team has the chance to get to know other businesses in the area, a win-win for all parties.  The arrangement to deliver “meals in” is just one example.
  • Be generous.  Generosity comes from ignoring your accountants and following your gut instinct as a hotelier.  Do you as a guest like to be nickel and dimed?  The free cream tea at The Beaufort is a great selling point, particularly as it’s a quality premium experience in keeping with the guest profile.  All small hotels can develop similar initiatives.
  • Offer great technology.  Be personal and intimate by all means, but remember that guests’ baseline expectation has now changed and technology needs to be discreetly available “under the hood”.  Free WiFi which The Beaufort provides is an absolute must and a great advantage versus some luxury brands which continue to charge extra.
  • Recruit on personality.  The team dynamics at a small hotel are magnified due to constant close proximity.  You need team members who can do multiple jobs and “change hats” easily.  Flexibility and friendliness may matter more than technical skills at this kind of hotel.  The interaction with guests can make or break a stay, so training is vital.
  • Personalise relentlessly.   This is an area that larger hotels with their systems, scripts and rules will find it hard to match in an authentic way.  The more individual your product (Mohamed told me they consciously add variety to each room even if guests will barely notice) the harder it will be for others to copy and the more special your guest will feel.
  • Keep interacting after the stay.  It’s critical for a small hotel to maintain the rapport after the stay too.  This can be done initially with a thank you email which also invites guests to continue to engage with the hotel on social media.  It’s important to develop content that builds on the pleasant memory of the stay so that the hotel remains front of mind and triggers a direct booking the next time the guest comes to town.

These are all lessons learned from just one visit to a well-run small luxury hotel.  It convinced me that this type of hospitality is timeless and will withstand any type of competition as long as it is executed consistently.

And this consistency may be more likely to stand the test of time in a family-run context where the baton is passed from generation to generation.

Book direct with The Beaufort at the best guaranteed rate

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Photo credits: The Beaufort Hotel.

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