Manchester’s four-star Macdonald Hotel on London Road is only achieving 50 per cent occupancy levels on its 338-bedrooms.
The company, which is based in West Lothian, Scotland, has appointed a new general manager to shake up service levels and give the hotel, which opened last year, “an identity” in a competitive city centre market.
Steven Dunford, appointed in September to replace Garin Davies, who left to start his own business, described the hotel built at the former British Telecom site on London Road as a “sleeping giant”, but said he is keen to see a significant increase in room bookings.
“We’re coming in at an average 50 per cent occupancy rate since February,” he told my-hospitality.com
“The company isn’t worried, so there is no panic. I’d like to see figures of around 65-70 per cent by the year end, but that might be difficult with 338 rooms. It’s the company’s biggest hotel so far and a real blueprint for the future of the brand. It’s a sleeping giant of a hotel and I think it’s just about to wake up.”
Dunford said the hotel had perhaps missed “having a figurehead” in its first six months and he was viewing it as a “relatively blank canvas”.
The hotel has reached capacity five times since its opening and currently charges around £125 for a double room, but Dunford believes there is strong competition in the city, from the likes of The Midland, City Inn (which was built by a company owned by former MacDonald directors) and the Hilton Deansgate.
“I have to find out what our customers want,” he said. “There are areas we need to change, but the corporate side of the business — meetings and seminars, etc — is running at about 70 per cent, which we’re very happy with. We perhaps need to address service levels. We are good, but we could always be better.”
A recent report by PKF Hotel Consultancy Services showed the average room rate in Manchester had gone up by 2.2 per cent to £86.03 this year, from £84.16 in 2007 and occupancy levels in July came in at 78.2 per cent.
By those standards, the Macdonald is coming in over budget and struggling on occupancy, but Howard Raynor, managing director at World Class Service, said the company’s brand is resilient enough to see gradual growth.
“Macdonald is a strong brand and has got stronger in the last two years — it’s doing lots of things right,” he said. “But they have put their biggest hotel in Manchester and they will have to build up demand over time. It’s hard to hit the 70 per cent mark straightaway.
“You look at the Macdonald in the context of the large amounts of new stock and the 1,300 rooms that are in the pipeline for Manchester in the next two or three years. It’s a more competitive market.
“Hotels have become the latest thing to anchor a commercial development, since the demand for apartments has dropped off, which makes it look as though there are lots more due for Manchester, but we’ll have to wait and see which ones actually make it.”