The debonair face from the front of house is at last getting some skin in the game
Former Powerscourt Hotel boss David Webster is setting out with some investors to shake up the Irish hotel sector. He spoke to Gavin McLoughlin
Published 26/06/2016 | 02:30
Dalata was one of the top-perform- ing stocks on the Irish Stock Ex- change last year. The Pat McCann-led firm nearly doubled in value after embarking on a hotel- buying spree.
While all that was going on, David Webster was managing the Powerscourt Hotel in Enniskerry, Co Wicklow. He played a key role in turning it around from near-collapse after it was acquired by Brehon Capital Partners and Midwest Holdings.
Now he's leaving Powers- court to team up with Bernard Brogan Snr and Brogan's business partner Jeff Leo in a new business called Podium Hospitality, backed by international investors including James and Mary Wenning of Ohio-based chicken farming business Wenning Poultry. The idea is to acquire and manage under-performing hotels whose performance can be enhanced with investment.
Podium has acquired the Dundrum House Hotel in Co Tipperary and the Pillo Hotel in Co Meath and is close to a third acquisition set to come through in the next month or so.
After that, there will be around €40m left for further purchases, says Webster.
He says that setting up his own business has been an ambition for "a number of years". He has been running hotels for other people. Now he'll be doing it for himself and his partners.
"I'm 44 and if I don't set up on my own I never will. The ambition is to do it, but to be a stakeholder in a business, and that was the motivation," he says.
"Powerscourt Hotel is a beautiful hotel and 10 minutes from where I live, but it didn't take the real boss of the family - my wife - too much persuasion to say we're going to go out and do it on our own and see how it goes. It's just exciting.
"After Powerscourt I've had owners approach me to get advice. A lot of them were friends, so I just gave them friendly free advice, and then about seven months ago I met a gentleman called Jeff Leo who told me, 'Listen, we can get access to funds from America if you can guide us in the right direction of acquiring hotels'. That's what prompted it.
"So I set up Podium Hospitality. We have the hotel expertise and we'll be investing money with partners to buy hotels and make some money for the owners.
"The idea is to be a strong management team in each of the properties. It will be regular communication with them and regular visits, wherever we can see an asset that we believe we can help to perform much better with the right investment. That's the only real criteria.
"There's a lot of hotels beginning to come to the market now. Before, you could buy an under-performing asset at the bottom of the market and regardless of what you did the market would move the price up. Now it's certainly not at the bottom of the market any more, but what we're looking to do is buy under-performing hotels where we feel we can really enhance their performance with a bit of investment.
"That's where we'll create value. We're in advanced discussions with one more acquisition for the summer, and everything else will probably be September/ October onwards."
They will focus on Ireland for now, but Webster doesn't rule out looking farther afield at a later date.
"Certainly over the next 12 months we don't see ourselves investing outside Ireland - all our efforts at the moment will be purely on Ireland," he says.
Nor is it definite that buying will continue after the remaining €40m is spent.
"We'll see," says Webster. "I don't have any ambitions to have a certain amount of hotels by a certain time. It's just a case-by-case thing. I've been approached by a couple of different owners since they heard I'm leaving Powerscourt to see if my company will get into management contracts with them, so we're contemplating that as a route as well - as opposed to just acquiring the assets."
Webster's vision for hotels is based on specialisation, he says.
"In my experience, most hotels try to be everything to everybody - and they don't really satisfy anybody," he says. "It's about having a clear, defined vision of who your target customers are and then aligning everything to that. The people that you recruit, the type of product, the type of service, how you communicate with those target customers, how you measure the performance against what the target customers want.
"And then you have to explain that to the team - tell them what you want to do, and then work with them on it.
"You have to have a highly-engaged team working with you, and a philosophy of continuous improvements. One of my values is to get great results but always try and do better, so you're never resting on your laurels. Get everyone to buy into it, so when you're looking to make improvements the feedback is not about being nit-picking or anything else, it's just about keeping the business moving forward."
Plans are already drawn up for Dundrum House. Encompassing a manor house and located 90 minutes from Dublin and 45 minutes from Cork, it will get a significant overhaul.
"It's got so much potential. We're going to be redeveloping and refurbishing that property," says Webster.
"The house will be finished off to a five-star standard and the rest of the rooms in the hotel will be finished off to a four-star deluxe. We're going to be looking for planning to build a new conference room there to host really good weddings and meals.
"Weddings would be a key target group, both domestic and international. Plus leisure travel, and then local community events - whether they're 30th, 40th, 50th birthday parties, that type of thing, and golfing events as well.
At the Pillo Hotel, the entire ground floor will be refurbished.
"We'll be looking at a different brand in there early next year. It will be a franchise with one of the international brands," says Webster. "And then leisure for the summer. It's right next door to Tayto Park, so it really is geared towards the family market for the summer, and the corporate meeting and events market for the rest of the year.
"We'll be refurbishing the conference room, looking at the sales activity we do there, the kind of menus we offer."
Webster grew up in Tallaght and was due to study accountancy. The first time he set foot in a hotel was when he got a job as a luggage boy in the Stillorgan Park Hotel in south Dublin. His experience there set him on the path that led him to Podium.
"I saw the manager, a guy called John Kavanagh - he's still involved in the business - and I thought, 'He has a great life. He comes in, he's a very charming man, has coffee with people, a real debonair kind of character'. And then I thought, 'He gets paid to do that'! And that was it.
"I went to study hotel management in London, never started accountancy. Then I did a post-grad afterwards in peace studies. It was just after the Gulf War, so nobody was recruiting. And after that I joined Marriott as a graduate trainee and just worked through on that side."
He later had stints at Carton House and the Belfry.
Looking ahead, Webster says two things concern him. The first is Brexit and its probable consequences for the value of sterling (we speak before Thursday's referendum).
"The great thing over the last few years was the euro against the dollar and sterling - and they are the two massive markets for us," he says. "If that keeps sliding further, there's going to be a risk to the pricing of hotels in terms of how many British tourists come over. And then there were rumblings about moving the VAT back from 9pc to 13pc.
"Hoteliers, we're always a bit of a pessimistic bunch. We've got an 'it's a great summer, but we've got to keep our eye out for the winter' kind of mentality. But we've no control over what happens to sterling, so we'll just react to however that moves and hopefully the Government won't move the VAT up on hotel prices or restaurant prices."
Tourism Ireland has put increasing focus on attracting visitors from emerging markets such as China and the Middle East. Webster, however, plans to focus on the more established markets of Europe, the UK and the US.
"I've done trips to India and the Middle East and it's got potential for some places - but not for my properties," he says. "I'm going to fish where the fish are, and they're currently in the UK, they're in the States, which is going to be a massive market for us in terms of leisure and events.
"And even, say, with the Chinese market, it's culturally very different. Your menus would have to change dramatically, the language that you put on items would have to change.
"So for us, we're not going to do it, because it's completely different to the current markets that we're serving.
"I go back to my original point - if you try to be everything to everybody, you can't really deliver great results to anybody. So that's why we've no ambitions to target that in the next few years."
The Podium team are taking things slowly. The Dalata comparison comes to mind immediately, but Webster says he is not presumptive enough to say at this early stage that he'd like to grow Podium into a listed entity.
"Dalata is a well-run company and I admire Pat McCann massively, they're absolutely great guys. But we'll do it organically and do it slowly. We'll make sure we don't run ahead of ourselves. Everything we do will be on a piece-by-piece basis, so as opportunity arrives we'll measure it and then act accordingly."
Many Routes to the same destination
My hobbies are...
"I love golf. But this year is probably the worst for me - I've played I think only four times in the last seven or eight months. And West Ham, I'm a big West Ham fan and go over seven or eight times a year. I bring my son, who's turning into a massive fan."
What book are you reading at the moment...
"It's called 'Finest Years: Churchill as Warlord 1940-45' by Max Hastings. It's all about the flaws in Churchill's leadership around World War 2. Everyone thinks he was full of confidence and everything else. It's all about how he coped."
The best piece of business advice I got was..
"Just a simple thing: there are many routes to get to the same destination. It was when I was in Marriott and I was procrastinating over making a decision, and I thought if I got it wrong it would really impact my career. And a guy called Carl Leaver, who's now the chief executive of Coral Bookmakers in the UK, he just said you can take this route or that route, and you can end up still getting to your destination."
My music taste is...
"I'm a massive Stone Roses and Smiths fan - that kind of thing is from my era!"
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