Examination of Witnesses (Questions 400
- 418)
TUESDAY 29 JANUARY 2008
MR GRANT
HEARN AND
MR GREG
DAWSON
Q400 Mr Evans: I know it is early
days. When is your first one open?
Mr Hearn: We have got three open
at the moment, but those we sort of inherited when we took the
company private. It will take us two or three years, from our
experience, before we get the next one open.
Q401 Mr Evans: As far as rules and
regulations are concerned, comparing the UK to Spain, for instance,
looking at regulations and tax, including the bed tax, or the
proposed bed tax, or the threatened bed tax, whatever you want
to call it, how does Britain compare with Spain?
Mr Dawson: I have just spent a
lot of time in Spain helping to launch things over there. The
key thing is, it is Spain's number one industry; it is their priority.
They spend £110 million on marketing, it is the second most
visited country in the world, but they are also good at using
events, so the Olympics is the best demonstration of how to use
an Olympic Games. Barcelona went from tourism offering 1.5% of
GDP to the city in 1992 to 12.5% in 2000, being the fastest growing
city in Europe during that time. Tax is currently 7% in Spain,
compared to 17.5. In terms of planning and getting things up to
speed, it is around the same time as the UK. There are frustrations
there, but it is very refreshing to operate in a country which
focuses on tourism first, and it is easier to get things done.
The real difference is the Government take responsibility for
the reputation of the Spanish brand. Two years ago they saw that
the perception was that Spain was a little down market—Costa
del Sol, two-star, three-star—and they wanted to change
the image, so they invested 130 million euros in a campaign during
2005, and it is that response and that awareness.
Q402 Mr Evans: It is a lot of money.
Mr Dawson: Absolutely. It is a
lot of money.
Q403 Mr Sanders: It is not much.
One hundred and thirty million euros.
Mr Dawson: Yes.
Mr Hearn: That is what we are
competing against. That is why we end up sixty-seventh in the
competitiveness league.
Mr Dawson: But they can see the
potential, and that is why it is number one, and that is why it
is the second most visited country in the world.
Q404 Mr Sanders: That is £100
million. Wembley Stadium cost £750 million. It is not a lot
of money. That is the point.
Mr Dawson: Absolutely. Take the
Balearics, for example. Twenty-five, 30 years ago they were unknown,
they were populated by farmers that were struggling to get by.
They are one of the most visited set of islands in the world.
Q405 Helen Southworth: We have had
a lot of evidence about the adverse impact of the strength of
the pound in relation to the dollar on the number of American
visitors over here. We have also had suggestions that the changes
in relation to the euro may have an effect. How convinced are
you that that is a significant driver?
Mr Hearn: It is certainly a driver.
The dollar is not nearly as much of an impact as it was prior
to 9/11. I was responsible for Hilton Hotels in the UK then. We
have never really had the same dependence on the American market
since that time; we have grown our markets from near Europe. I
think that one of the strengths of London right now is actually
the currency of the euro against the pound, and I think if you
go out in the streets of London right now you hear mostly near
European accents and languages.
Q406 Helen Southworth: UKinbound
has told us that the average short-haul visitor spends less than
half the amount of money that one long-haul passenger spends.
Is that significant or does it work out on a pro rata basis?
Mr Hearn: I think it is clearly
significant so far as the balance of trade is concerned for the
country and does need to be taken into account. From our point
of view, because we are a value offer, it does not have a direct
correlation, and 95% of our business is UK business. Even in London
the vast percentage of our business is UK business, so it does
not come into the equation from that point of view, but they are
right to highlight that. There is no doubt that we are working
a lot harder than we were to maintain the same level of revenue
as an industry because of that. That is not necessarily a bad
thing, but, certainly, as far as the country is concerned, to
be missing out on those big bucks makes life more difficult.
Q407 Helen Southworth: What would
change it?
Mr Hearn: I think that going back
to the States is not necessarily the way forward for us. I think
we need to focus much more on the emerging markets. The ability
to bring Americans over in vast numbers, the way they used to,
at the moment is difficult because it is out of most people's
hands and it is about the whole security situation. I do remember
back, though, to times when we did see British Airways working
with other members of the industry and the Government to bring
the President's wife over, and that sort of thing, in order to
make a big show of that, and we miss that kind of leadership right
now as an industry, but I think it is far more important for us
to think to the future and concentrate on the emerging markets
and really put some investment into them.
Q408 Helen Southworth: Can I ask
you, quite briefly but quite an issue, about the environmental
impact and work that you are doing on those issues within your
own field but also what you think needs to be done in the wider
field?
Mr Hearn: If I may, I will ask
Greg to answer that one.
Mr Dawson: We have been working
with the Carbon Trust now for about 18 months and I have spent
a lot of time at Sainsbury's on their environmental campaigns.
We are a very different business in that our customers and our
staff have a major impact on our carbon footprint. We could go
out with all the whizz-bang technology, but actually, if a family
of four come into a Travelodge room, turn on the TV and disappear
shopping for 36 hours and leave everything on, that is where the
savings are to be had, so we have been running a lot of staff
and customer trials across the country. We have an Environment
Director who has put a fully comprehensive strategy together,
we are due to launch that in the next few months, and that is
taking into account the behavioural bits but also technology.
When we are opening so many hotels, we need to look at things
like solar power, wind power, underground storage heating, all
of these things, to make sure we are going to reduce our carbon
footprint.
Mr Hearn: And recyclable hotels
as well.
Q409 Rosemary McKenna: Good morning.
I was recently horrified, when I was staying in what was a rather
plush conference centre, to find that the Eastern European staff
were being paid three pounds an hour plus accommodation. How do
your rates of pay compare to that?
Mr Hearn: We are better than that.
On average, I think we are well above the minimum wage and what
the predicted minimum wage will be for this year. We are a low-cost
business, 30% of the people employed in the Travelodge at the
hotel level are on the minimum wage, but the rest are above that.
As I say, the average is well above that.
Q410 Rosemary McKenna: Do your cleaning
staff have decent rates of pay?
Mr Hearn: I am including them.
Q411 Rosemary McKenna: You are including
all of them?
Mr Hearn: Yes.
Q412 Rosemary McKenna: You also say
that you are a member of the London Skills and Employment Board,
and you spoke about the conference that the Prime Minister was
at. Again, I was horrified to see the snobbery attached to some
of the reporting of in-house qualifications that are being promoted.
Would you like to comment on that?
Mr Hearn: It is incredible snobbery.
I was sitting next to Jim French from Flybe yesterday and the
first question he was asked on Radio 5 yesterday was: "What
is this about trolley dollies getting qualifications?" There
is just incredible snobbery from people about the jobs we offer.
There is still real confusion in this country about the difference
between service and servitude. This whole upstairs/downstairs
thing still resonates through us and everybody thinks it is okay
to look down their nose at people who provide service. It is outrageous
snobbery. What McDonalds and Flybe and Network Rail announced
yesterday is fantastic. If nothing else, it shows that people
are putting real investment into training here, that they are
trying to provide what their staff want, which is development
so they can develop their careers. We ourselves now have a 12-week
management and development programme, which accelerates the ability
for someone to basically go from being a receptionist to becoming
a manager. From our local employment partnership we did with our
new City Road property in London, we took on 12 people. Two of
those candidates have put themselves forward and are being supported
by the manager for our Management Development Programme, which
just goes to show the possibilities in this industry.
Q413 Rosemary McKenna: That is only
12 weeks to find out if they want to train but also to find out
if they can afford to fund it?
Mr Hearn: It is a bit further.
They need to be recommended by their manager; then they are put
on to an assessment programme. If they get through that, then
they are put on to the Management Development Programme which
is a 12-week programme, some off-job training, some going to other
hotels in the brand and working round those, with the idea that
they will come out at least at assistant hotel manager level or
possibly at hotel manager level.
Q414 Rosemary McKenna: You would
be quite happy to sign up to the kind of in-house training that
the Government is trying to promote?
Mr Hearn: As I explained to Jim
French from Flybe, we have actually chosen to go outside of that.
We have actually worked with Westminster Kingsway to develop a
budget hotel diploma, which is a two-year programme. One of the
problems in our industry is that most management diplomas are
aimed at la-di-dah hotels. We do not do an awful lot of filleting
of duck at the table in the Travelodge.
Q415 Rosemary McKenna: And not many
people in this country can afford that either.
Mr Hearn: That is true. So we
needed a different kind of programme. As I say, a lot of our people
at hotel management level or even district manager level in our
case have come through the ranks, so they started off serving
at tables, cleaning rooms or working on reception. They do not
have proper qualifications in management and they want that opportunity
to go back, so we have created this programme now, which starts
this month. An initial 12 candidates are going on that and will
come out with a budget hotel diploma which—we recognise
makes them more of a valuable commodity to other employers as
well as us, but it is what they want and we want that for them.
Q416 Rosemary McKenna: Will you roll
that out throughout the country?
Mr Hearn: Yes, it is certainly
our intention. We would certainly like to have something up in
Scotland, the Midlands, so we have got three bases for that, but
Westminster Kingsway have given us the assurance that we can do
it.
Q417 Nigel Evans: Can we also thank
you for the recent press-release relating to nude sleepwalking
being on the rise. Perhaps you can come back in three years' time
and give us a comparison.
Mr Hearn: With the temperatures
in Spain, we would think it would probably be more but we will
see!
Q418 Chairman: I knew Nigel would
find a way of bringing the sleepwalking in some how. Can I thank
you both very much.
Mr Hearn: Thank you for the opportunity.
We appreciate it.
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