Interview with Jupiter Hotels’ chief executive Shane Harris

Jupiter Hotels is a joint venture between Patron Capital and West Register and currently owns and operates 32 hotels throughout the UK. BigHospitality has reported on the recent additions to their portfolio,​ including that of the Talbot Inn.​ Harris talked with us about the important role that mid-market hotels, such as the ones that Jupiter manages, have to play in the market place.

He said: “Our investors started Jupiter because they saw the opportunity to do something with mid-market hotels. The saw that this type of hotel provided lots of opportunities with big clients, especially in competition with the budget hotels.

“Mid-market hotels have a great opportunity to reposition and redefine themselves with the customers, particularly British leisure and business customers to win them back.”

Hotels as individuals​

Though Jupiter runs 32 hotels under its brand, Harris believes that each of those have to be looked at individually to come up with a well-suited management plan, rather than all run under the same overarching strategy.

“For our hotels, the day to day operations rest with the franchisee,” he said. “Outside of that we run the hotels in the best and most appropriate way that we believe drives revenue and profit.

“We’re not a homogenous bunch of hotels though. Each one of our properties has a different business mix and aims. For example some of them are very reliant on weddings and conference business, so we look at that and try and understand how to drive more ways of getting that type of business. Other hotels that we’ve got come with a bedroom package, those are the ones where most of the interest is corporate. We try to structure ourselves and aim to be better than competitors in that same marketplace.

“At Jupiter our philosophy is that every hotel, even though it has a brand name on it, has to be treated as an individual, I think that’s one of the strengths that we have.  

“Of course it’s easy for me to say that that’s what makes our hotels work, but I think that the proof is in the pudding in the sense that this year the market grew four per cent in terms of revenue growth, and we grew in double digits, so clearly we’re doing something right.”

Catalyst for change​

Harris informed us that when Jupiter takes on the management contract for a hotel they spend a great deal of time coming up with a strategy that aims to reposition it in the market, and the owners must be on board with change.

“One of the things we make clear to the owners is that we’re not here just to be called the managers,” he said. “If Jupiter doesn’t believe it can come up with a long term sustainable strategy that the owners can support, then there’s no point in it coming in to manage the hotel.

“We want to be a catalyst for change for the owners. The first thing we look at doing is improving the day to day operations, and then we tell the owners where we believe they should be putting their investment capital to best reposition the hotel. After that’s happened, we present the way we think sustainable growth will come about, we want them to be competitive in their local market segment.

“How long it takes to come up with a plan depends, we need a number of discussions. What we do is: look at the physical condition of the hotel, look at its numbers and the business segments it attracts, and research why the hotel, given its location and condition, is not getting its fair share of the local market.

“We then visit a number of local hotels to understand the competitors in that marketplace. From all that we’ll say we believe that this hotel has a very strong position because of its location and state which segments the operation and capital should be focusing on.”

Acquiring hotels​

According to Harris there is no set number of hotels that Jupiter aims to acquire over the next few years, though their investors are looking for more sites to add to its portfolio.

Harris said: “We’re fortunate enough that we have two shareholders which continue to look to buy other hotels that would be managed by Jupiter. We have looked at a number of portfolios over the past six months and we’ll continue that going forward.

“The shareholders talk with us and we discuss opportunities with them and decide which projects would be a good fit. There’s no definitive strategy in place whatsoever, if the opportunity comes up then we’ll just go for it.

“Sometimes individual hotels come to our attention that might fit. We want hotels that we believe we can create value in through the right strategic and operational investment. Those hotels could be anything; ideally we’d like to add another 10 to 20 hotels to our portfolio.

“We are concentrating on mid-market hotels, so we’re not going to be looking to do a five star hotel in London. We feel that mid-market is our strength, and that’s the market we want to focus on. The hotels could be anywhere in the UK. They’ll preferable be existing hotels with track records rather than new builds, but we’ll still look at those too.”

Recently Jupiter Hotels’ portfolio has been expanding rapidly, with the acquisition of five Barinbrook Limited hotels in March and the Talbot Inn in April.