32nd Annual Conference, Split-Croatia
November 11-16 2019
32nd Annual Conference, Split-Croatia
November 11-16 2019
Newsletter of January 2019
Bulletin de janvier 2019
 
  
 
  
 
  
 
  
 
  

The Town House Hotel
Ireland

Introduction
The Town House Hotel was built in the late 1930's as a traditional country town hotel to service the needs of the local community and travelling business people. It is run at present by the second generation of the original family who took it over in the late 60's.
Mary and John Guest wish to retire and hand the hotel on to their son and daughter, (Liam and Patricia) as it was handed down to John from his father and mother. Both Liam and Patricia attended Hotel Management Colleges in Ireland and have spent the last few years working in Hotels in Ireland, UK and France.
Liam and Patricia knew that they were expected to take over the running of the hotel, but did not expect it to happen at this time. Patricia is working in London and has a good career ahead of her with a multi-national hotel company in the sales and marketing division. She has also become engaged recently. Liam is working as a senior catering manager in one of Dublin's medium sized 4 star hotels.
Following a meeting of all four family members, Patricia expressed her desire to remain in the UK and Liam now feels that he is under pressure to carry on the family tradition. His father recognises that Liam has been developing his career, and whilst he wants one of his children to carry on the business, he understands that Liam needs time and good advice to ensure that he makes the right decision. Patricia has said that she will accept whatever decision the family makes.
John suggests that they look for outside help to evaluate the opportunities facing Liam at this time. They approach a firm of well-known Hospitality Consultants to advise them.
Both John and Liam meet with the consultants and provide them with detailed information about the business, together with financial figures.

The Hotel
Accommodation

35 Bedroom Hotel.
3 Star Grade.

25 Twin/Double Rooms - last refurbishment completed in 1996

10 Single Rooms - all need refurbishment and upgrading

All bedrooms are en-suite, have remote control televisions, tea/coffee making facilities and direct dial telephones.
Bedrooms are located on the 1st and 2nd floors with a traditional stairs and small baggage lift.

Restaurant

The hotel has two restaurants. A traditional 75 seater main restaurant, which serves breakfast and full dinner (a la Carte and Table d’hôte). The restaurant is located towards the rear of the hotel with access through reception and lounge or from the car park.
The second restaurant is a 30-seater coffee shop located at the front of the hotel with direct access from the street. This is open all day from 8.00 am to 9.00 pm and has a steady trade throughout the day. The coffee shop serves snack/grill style food plus teas/coffees and pastries.
Food serviced here is from the coffee shops own grill kitchen.
The Main Restaurant used to be the only "fine dining" experience in the town, but recent years have seen a growth in new stand-alone restaurants around the town and area. Sunday Lunch is the busiest day in the restaurant with approximately 120 covers. The price at €9.95
has not increased for the last 2 years but it has a steady and loyal following.

Bar

A 90-seater bar which can cater for up to 150. A traditional lounge style hotel bar located behind the coffee shop and accessed directly from the main reception area. This primarily serves hotel residents and function guests.
The bar serves a limited food menu all day with the majority of trade at lunch for soups, sandwiches, tea or coffee.

The main ballroom seats up to 200 for a dinner/wedding, with a built in bar. This is accessed through the main hotel or from the car park. This was the first integrated function room in the town/area and was the traditional venue for weddings, sports functions etc.
There are two smaller rooms, which can cater for up to 30, each which are used, for local meetings and small dinners.
The main ballroom was an addition to the main building and the hotel benefits from limited noise disturbance in the bedrooms.

Car Park

The hotel has substantial space behind it, which is used as a car park for a 150 cars.

Location

The Town House Hotel is located near the centre of a typical Irish town of a 3, 000 population and is approximately 12 miles from the sea. It has direct street frontage on the main road through the town and has a commanding presence.
Farming is the traditional industry but there are a number of small and medium industrial developments operating, planned, or in progress. Cork city is 64km away that provides rail links to the rest of the country.
The town is on a main tourist route and is located in West Cork, but has never been identified as a main stopping point.
There are a large number of activities organised locally, including fishing in the local river, deep-sea fishing nearby and horse riding. A links golf course plus one other parkland golf course are also close by. The area is one of the outstanding natural beauties with superb drives and walks.
The town has recently benefited from a new leisure centre located 500m away from the hotel, with a large indoor swimming pool. The hotel has a casual agreement with the leisure centre for use by hotel guests, but it does not advertise this strongly.
Within the town itself, there is traditional Irish music most weekends. There will be at least one planned event and many impromptu sessions.
Three years ago a new 70 bedroom 3 star hotel was opened 20km outside the town, near an area of great scenic interest and also on the main tourist route. The new hotel has an indoor leisure centre and 250-seater function room.
This newly built establishment has benefited from tax incentives. It has lower selling prices, and has taken more and more banqueting business away from the Town House Hotel. However, it has also attracted new visitors to the area because of its substantial marketing spend.
In the town there are two other premises, a 12 bedroom, 2 star hotel and a 6-bedroom guesthouse. There are a number of quality restaurants in town and in peripheral villages that have gained a very good reputation and would be the locally preferred dinner venues.
There has been a large growth in self-catering properties (350 bedrooms) as a result of government tax designation to the area.
The Town House Hotel is finding, that it is being "attacked" on all its historic market segments by these new accommodation providers and by developments throughout the county and country, which are offering even higher standards of quality.

Markets

The Town House Hotel has always had a heavy reliance on the Food & Beverage business, with particular emphasis in the Banqueting/Functions business.

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Both the Commercial and Banqueting trade have been hit hard over the last few years.
The Hotel has not intended to market itself heavily with most expenditure going on local support, brochures and membership of the “IHF” and the “Be Our Guest Guide”. Intermittent campaigns have been carried out over the years.

Hotel Performance

The Hotel has produced small trading losses over the last number of years and this is expected to continue this year. All areas have been affected by the increased competition and the hotel has seen its cost base taking a higher percentage of turnover.

Reception 3
Accommodation 1 Head, 1 Supervisor, part-timers
Coffee Shop 4 Full time, part - timers
Bar 3 Full time, part - timers
Restaurant Manager, Supervisor, 3 Full time, part timers
Kitchen Head Chef, Sous Chef; 1 Chef de Partie, I Commis, 3 Kitchen Porters
Maintenance 1 Full timer
Porters 1 Night porter
Management Senior Assistant Manager, Duty Manager
Banqueting Head Waiter

Part time staff generally cost approximately 20% of the payroll.
Staff is well paid resulting in a low staff turnover and there is some very long serving staff in each department. The Senior Assistant Manager has been with the parents for 20 years and is almost part of the family.

Financial Status

The Hotel has no capital debt and a current overdraft of €50,000. However, the business has been in a steady decline for the last 5 years and the reason for the overdraft is the accumulated deficit. Historically the hotel would have had cash in the bank.
Refurbishments in prior years were financed out of Cash Flow.
If the hotel continues its current performance it will ring up substantial debt over the next 2/3 years and there is no cash to fund refurbishment or development.
Note:
There is no tax payable due to outstanding capital allowances from prior investments. These allowances have now ceased.

 


Town House Hotel Balance sheet
Town House Hotel General Operating Statistics
Town House Hotel Profit Loss
Teaching Cases

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