Lucinda O'Sullivan's Ireland

Monday 17 November 2014

The resurgence of the Sandhouse Hotel at Rossnowlagh, Co Donegal, is a story of tenacity and dedication by Paul Diver. Paul was general manager when it was placed into voluntary liquidation in 2009 and subsequently bought the hotel.

"Dealing with liquidators was not a very pleasant experience. Our first task was to secure the bookings we had and business as usual. This was the hardest task, as liquidators see no value in fresh flowers or free newspapers for guests. We quickly realised that the only way we could run the hotel to its previous standards was to lease it from the liquidators.

"Life was difficult for Irish hotels in the recession. Sean Dunne started selling rooms in Dublin for €19.99 which sent shockwaves throughout the industry. It was impossible to compete. We reduced rates but never resorted to below cost," says Paul.

Paul says that regular weekend guests would stay one night instead of two and no longer bought wine.

"Customers were not necessarily looking for the cheapest, but were looking for value for money. With the Atlantic on our doorstep, we began successfully packaging surfing breaks and, by highlighting our free local amenities, developed new domestic markets."

In February 2012, without warning, the hotel was placed in an Allsop's Auction with no time for Paul to get bank funding. "We approached some business people and, that I had successfully run the hotel throughout the depths of the recession, convinced them to lend me the money so I bought the hotel in March, 2012.

"I had no idea of the publicity that was to follow. We received over one thousand letters wishing us well. We increased business by 40pc in the first year and it has grown steadily since. The amount of local business and good will is phenomenal."

Since Easter, Paul has seen a big turnaround. "People feel they have survived, life is too short, and are back spending with Irish coffees and second bottles of wine!"

Eithne Fitzpatrick of Fitzpatrick's Castle Hotel, described the initial impact of the recession as a tap turning off suddenly.

"Our corporate business had all but dried up. The larger corporate accounts, on which we depended for base business, had just closed the purses tightly. It then gradually, like a plague, spread through all the market segments and we were in deep trouble. Our turnover dropped significantly over a period of 14-18 months by a whopping €4m - a living nightmare for an independent hotelier like me. Our auditors at the time actually said to me 'you should put your feet into the shoes of a receiver', which I had to do.

"Drastic measures were taken, meaning very painful decisions leading to redundancies. Overheads were cut in the region of €2.5m with all staff and management, including myself, taking significant pay cuts - up to 30pc in some cases. The five-year period can only be described as hell on earth," she says.

They re-entered the 'tour' market, securing business from a large American operator. At home they dropped prices as the market demanded, selling in many cases below cost. They are now well on the road to recovery with profits returning, allowing her re-invest in her beloved castle.

"I now have my son, Mark, working as my general manager. I live to tell the story and the future is bright. We learned some very significant lessons and we've come out now stronger for it."

Renvyle House Hotel & Resort, the former home of Oliver St. John Gogarty, is a magical place in Connemara. Zoe Fitzgerald, whose grandfather bought the estate in 1952, told me how the recession hit them. "There have been difficulties that have been challenging, particularly for a rural property. Guests have to travel to you; you are less inclined to get chance business from passers-by.

"We were quite reliant on the Irish market, which was very strong and were good spenders. We had been working with agents overseas but the recession made us step up. We travelled overseas to visit operators and these efforts began to pay off in earnest."

For the Irish and UK markets, the demands changed. Guests who might have had a three-night package were opting for just one dinner in the restaurant, so they introduced a bar food menu.

"Another thing we noticed was a few guests bringing their own pre-dinner drinks to have in their room, something that rarely happened before 2007. The trend to spend on wine decreased, so we sourced a very nice selection of affordable wines and introduced half bottles," says Zoe.

They also found Nama hotel deals difficult and something they could not match while maintaining their high standards. However, it was not always about price.

People were prepared to spend on their holiday but wanted a little something different, such as day trips to Inishbofin. "The light at the end of the tunnel is arriving. We've had a good year this year and being located on the Wild Atlantic Way has been influential. The Irish market is strengthening, people are more optimistic," she adds.

In 1996, when Joe and Margaret Scally opened the exquisite 5-star Hayfield Manor in Cork, they had a clear vision to not only live up to customer expectations, but to always exceed them. Joe and Margaret also own the Killarney Royal and have just bought the legendary Malton Hotel in Killarney.

"Margaret and I are fortunate that our four children; Annemarie, Mark, Brian, Claire and, our son-in-law, Etienne, all work in the family business," says Joe.

He adds it's important to have the correct people in place who understand the guests' needs and that people still want luxury at competitive prices. They saw the fine dining experiences decline with people more interested in their 'Twilight Menu'.

"We also found that during the recession, competition was much tougher as a lot of hotels would undercut each other and, for this reason, we had to sell Hayfield Manor in a different way and sell the experience that the guest cannot find anywhere else.

"When the downturn came, it did take us time to adjust our thinking. The meeting room business was an area where we saw a decrease. Corporate spend was reducing and people were much more rate conscious. The guest was and still is always looking for something different and something new and we had to be more creative in our special offers."

Happily, Joe says there is no doubt that the economy and, more importantly, people's confidence is on the way back. "From our point of view, Prosecco was the Champagne in the recession and thankfully Champagne is back," says Joe.

Joe credits his fantastically loyal customers and is grateful to them. "The recession didn't break us, it made us stronger as a business and as a family and it brought about opportunities, such as the Malton Hotel, where we want to carry on the tradition of excellence."

Back in Donegal, Harvey's Point is celebrating 25 years in business. Deirdre McGlone Gysling says the recession put them through their paces to ensure they didn't fall.

"In 2009 the signs became visible that times were going to get tough. We took action promptly to control our costs but never compromise on our high standards of hospitality.

"While there was an obvious change in consumer spending, we did reduce prices to some extent but remained protective of price. It was difficult to compete with the Nama hotels. Customers were not afraid to haggle on price, browsing the internet to check out competitors' offerings," says Deirdre.

"Senior staff were empowered to negotiate in order to make the sale but they also had to say 'no' if a booking was making no commercial sense. Dining trends changed. No longer was it acceptable to charge €60/€65 for a 4/5-course dinner. Guests were looking for a casual offering and, if on a package with a dinner included, they wanted bar food another night.

"The average food and beverage spend dropped significantly. Instead we tried to be creative with our packaging by adding value. I have travelled to the US at least three times a year on marketing trips. Happily, 2014 has been a record-breaking year at Harvey's Point and we are excited about the future."

For more details see: sandhouse.ie; fitzpatrickcastle.com; renvyle.com; hayfieldmanor.ie; harveyspoint.ie.

Sunday Independent