Business Irish

Sunday 20 October 2019

New hotels on the menu for Jurys Inn

The hotel brand's MD Jason Carruthers is hungry to expand despite Brexit and room rate pressure, writes Fearghal O'Connor

Jason Carruthers, managing director of Jurys Inn and Leonardo Hotels. Photo: Douglas O’Connor
Jason Carruthers, managing director of Jurys Inn and Leonardo Hotels. Photo: Douglas O’Connor

Just up the street from Dublin's soon-to-close Bernard Shaw pub, a former battery store and language school is about to begin its two-year transformation into a trendy new hotel and night-time venue.

The Nyx Hotel, a boutique brand coming for the first time to Ireland, is planned for a prominent site along the canal at Portobello Harbour.

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The Nyx will be a 175-bedroom hotel, but its downstairs bar and venue will consciously aim to connect with the local late-night crowd, with bands and DJs, and connections to the artistic scene in the area, according to Jason Carruthers, the MD of Jurys Inn and Leonardo Hotels.

Just how that sits with the Bernard Shaw regulars as their favourite haunt heads to the northside remains to be seen. But for Carruthers, the arrival of the Nyx brand to Dublin is just the latest step in Jurys Inn's expansion across Britain and Ireland since it was acquired by a group led by Israeli hotel entrepreneur David Fattal two years ago.

Fattal controls a group of 200 hotels and the acquisition has meant that Carruthers, and the Dublin-headquartered Jurys Inn team, are now responsible for growing all of the Fattal brands - which include Leonardo and Nyx - across Britain and Ireland.

"At the point we were acquired, we had 36 hotels," says Carruthers. "We are now 51 hotels after we took over the management of the existing Fattal properties in the UK. We've also added new hotels in Southampton and Manchester, and a portfolio of four hotels with 1,350 bedrooms between them in London. So we've been busy."

Although most Irish customers, and many UK customers too, will be much more familiar with the Jurys Inn brand, the company is now focused on expanding the Leonardo brand.

"We have a Jurys Inn in pretty much every key city in the UK and Ireland so we have a very good footprint. So when we acquire or develop hotels it will be under the Leonardo or the Nyx brand."

And Carruthers is not short of ambition for his strategy. Dublin City councillors may in recent days have looked to limit the number of new hotels in the city - driven in part by a fear that a proliferation of new sites is leading to the disappearance of quirkier venues like the Bernard Shaw - but that is not putting the brakes on Carruthers.

"Dave Fattal started the business in 1999 with no hotels, and now he's got over 200. So there's a real appetite there for growth. And he was very clear to us about what he wanted in the UK and Ireland. We have a road map of cities and locations where we would like new hotels, which could be a combination of freehold, leasehold, new-build acquisitions. And we will look at all opportunities in those cities to acquire hotels.

"We could quite easily double our footprint in Ireland over a 10-year period. It will happen in a similar way to how we have introduced multiple brands into UK cities. So in Dublin, we have two Jurys Inns and will open the Nyx property at Portobello, but we could easily accommodate a couple of Leonardo properties too. For example, a Leonardo Royale, a larger property with more extensive facilities in terms of meeting and event space and a spa. And we could quite easily accommodate a smaller Leonardo too."

The group operates 37 hotels under the Jurys Inn brand and 15 hotels under the Leonardo brand - 47 in the UK, four in Ireland, and one in Prague. The group employs more than 4,000 people, 400 of those in Ireland. Right now, the firm has 11,000 rooms across the UK and Ireland, but has a pipeline of potential rooms of about 2,000, a quarter of them earmarked for Ireland - likely focused on the Dublin, Cork and Galway markets where Jurys Inn is very well-established.

"Ireland's a really important market to us and always has been historically," Carruthers says. "Obviously, we're very well-known here in Ireland and there is great affinity with the Jurys brand. And we operate, all of our hotels, above 90pc occupancy in Ireland. We've got a very loyal following and we are very active when it comes to new opportunities. To meet the group's expectations of growth, we need about 10pc additional room stock per annum."

He pinpoints Galway, where there is a Jurys Inn, as "a phenomenal market for us".

"We'd like a larger hotel in Galway and we've got a planning application in to add on an additional 89 rooms to the 130-room hotel. But Galway is a market that we really like and we'd certainly look for other hotel acquisitions there. The fact that we operate with an occupancy above 90pc and at a premium to many of our competitors means we could look to introduce another brand.

"I think one very large Jurys Inn is going to be sufficient for that brand, but a Nyx or Leonardo could certainly work in that area."

Neither does he rule out a second location in Cork but, ultimately, when it comes to Irish expansion, Dublin is still definitely top of the agenda. This is despite the fact that a boom in hotel building across the city has, he says, led to a big jump in the supply of available rooms and therefore some recent pressure on rates.

Some hotel groups also now see Dublin as an expensive city in which to acquire sites and build venues. But none of this deters Carruthers. He sees an obvious gap for Fattal's Leonardo brand of larger hotels in the city, for example.

"I certainly don't see Dublin as a market it's too expensive to develop," he says. "It is in our top three or four locations for the entire group. But having said that, we are very, very choosy on location."

He sees the area around the river in Dublin as an obvious location in need of more hotels, especially larger full-service sites that can handle events. For example, he is likely to talk to developer Johnny Ronan about his plans for a 22-storey hotel at Tara Street, he says.

Trying to pin down new opportunities while also ensuring the smooth operation of the 51 hotels in the growing group means that Carruthers never has much time to sit still. Based in Manchester, he travels to Dublin each week to meet with the senior team of Jurys Inn.

"We get together on a weekly basis and then go our separate ways. So I spend about a third of my time here and the rest in the UK," he says.

Carruthers joined at a particularly interesting juncture in the history of the Jurys Inn group. It had just been taken over by US private equity firm Lone Star, just one in a series of boom-and-bust era sales for Jurys Inn. In 2007, a consortium of investors led by Quinlan Private had won a battle to purchase the Jurys Inn division of Jurys Doyle Hotel Group with a €1.165bn cash bid.

Lone Star stepped in during 2015 and paid £680m (€768m) to buy the group and, after upgrading many properties, sold it to Fattal two years later for a reported price of just over €900m.

For Carruthers, one of the attractions was how the group was moving from a budget type of offering to something more akin to four-star.

"I met John Brennan, the CEO at the time, and I immediately struck it off with him. I liked the culture of the company and I really liked the product. I was familiar with the product from working in the industry and I was excited about the plans for growth and development," he says.

Lone Star initially tasked him with integrating eight other hotels it had acquired separately into the Jurys Inn group. That achieved, Lone Star looked to exit during 2017 and Carruthers found himself heavily involved in the sale process.

It was a new and interesting experience for someone who had worked his way up through the hotel industry over almost three decades.

"I got into hospitality through working in my local pub, going away with my parents, falling in love with hotels, restaurants, food and drink. In my early career, I joined a company called Shire Hotels as a graduate and worked in every single department before becoming general manager."

He then joined French company Accor and rose to become vice-president of its Novotel brand in the UK, looking after 28 hotels. After Accor, Carruthers had a stint as CEO of a collection of family owned boutique hotels and luxury country house properties, and from there he joined Jurys Inn.

As an Englishman who spends about a third of his week in Ireland, he has become immune to the question he is always asked by Dublin taxi drivers: 'So what's going on with Brexit?'

"I get the feeling that people just want us to get on with it at this stage," is his standard response.

Brexit has presented particular challenges to Jurys Inn, not least because almost a third of its UK-based staff are actually EU citizens.

"We have helped educate them on what the current legislation is, and how to apply for settled status, for example," he says.

The hotel group has also had to spend a lot of time working with suppliers to ensure that it does not face shortages of goods.

"Typically, about 30pc of our food and drink comes in from Europe so we've worked with our suppliers and we could quickly change our offer to guests, in a matter of weeks, if we needed to."

Carruthers sees Brexit as just a fact of life but the uncertainty can get frustrating: "It's dominated proceedings for years and I don't like being in a position where we've got a group of our workforce who are unsure about what the future looks like."

Of course, the wider future for the hotel sector also looks uncertain with, according to some, a recession almost inevitable.

But Carruthers is sanguine: "We've weathered downturns in the life cycle of Jurys Inn. We're well-positioned. We operate in multiple segments so we're not as exposed as maybe some of our competitors. We've great hotels in very good condition so we're as well-positioned as anybody to cope with a slowdown."

He is not concerned about the blip in room rates that the group has noticed in Dublin and some other cities, as the supply of new rooms has increased.

"There's an amount of uncertainty and it's true that in certain cities there has been an increase in supply, particularly during 2019, and Dublin is one of those cities. And it takes a little while for the new supply to settle relative to the increasing demand. But when I look at a city like Dublin, you look at the increase in visitors, in visitor numbers coming into the airport, and you know the fundamentals are very, very strong."

It is a phrase that the soon-to-be-publess patrons of the Bernard Shaw would likely scoff at. But Carruthers will no doubt happily welcome them in for a drink and some local live music when the new Nyx throws open its doors just up the street.

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