Technology has changed the hotel industry in ways customers barely even notice. John Brennan, the Dublin-based chief executive of the Amaris Hospitality group, which owns Jurys Inn, provides a perfect example.
Amaris is owned by US billionaire John Grayken’s Lone Star fund. It operates 73 hotels in Ireland and the UK under several brands. Customers give its hotels many thousands of online reviews each year on sites such as Tripadvisor and Booking.com.
Receiving customer feedback is always welcome, but for Brennan, who quite literally grew up in the industry as the son of one of Ireland’s most famous hoteliers, it is much more important than that. Amaris has acquired a sophisticated online technology to “scrape” the data imparted in all reviews – good and bad – every week.
For Brennan’s hotel managers, this must be absolutely terrifying.
The data is categorised under headings including sentiment, geographical area, brand, hotel and activity. A monthly summary is produced for the entire group, noting the overall customer sentiment in relation to, for example, food, accommodation, price, service, and how it compares with the previous period.
Each property in the group then receives a breakdown of the overall data, which can also be tailored for a report on each individual hotel. Management then assess what aspects of the operation need to be improved, and individual response plans are devised at hotel management level.
The result is never-ending, real-time, brutally honest customer feedback that management is expected to act upon. For those of us who worked in the hotel industry in a different era, it sounds like something from Orwell’s 1984. But for Brennan the information is gold dust, as he explains with a smile.
“You can paint a picture of how well your operations are doing across the entire group,” he says. “You can mine all that data, and find out exactly where you need to improve. This is much, much better than a feedback report you get twice a year from some ex-hotelier who now works as a mystery guest.”
Lone Star purchase
Brennan spent six years running Jurys Inn before it was bought by Lone Star in January 2015 for £680
million (€811 million). Last July the Irish-run group was folded into the newly created Amaris holding company, along with dozens of other Lone Star-owned, upper mid-market hotels in the UK, some of which it acquired with the purchase of loans from IBRC.
Jurys Inn is well known within the European hotel industry for its finely drilled operating model – Brennan oversaw an overhaul of the group when it was owned by Avestus (formerly Quinlan Private). The Dubliner and his team were kept on by Loan Star after the acquisition and given the keys to the whole Amaris portfolio.
Take them all, Lone Star effectively told him, and make them operate as well as Jurys Inn. The whole group is run from Dublin.
“The purchase of Jurys Inn unlocked the opportunity for Lone Star to do Amaris,” Brennan says. “I was simply asked to take that experience and translate it across the entire portfolio.”
Jurys removed
It is a busy weekday lunchtime, and Brennan is holding court in one of the group’s busiest hotels, the Hilton Garden Inn on Dublin’s Custom House Quay. A large group of Chinese tourists polish off their lunch in the corner as wait staff buzz around serving pockets of office workers from the nearby IFSC.
Ironically, given that Brennan intends to apply principles honed at Jurys Inn across the entire Amaris group, the Irish brand was removed from this property as part of the overhaul in favour of the Hilton mid-upscale brand.
Work will soon begin on an 85-bedroom extension, which will turn the Hilton Garden Inn into the largest in the city centre. It will also be upgraded with the installation of air conditioning in each room. The public areas have already been spruced up.
“This hotel is a good example of what we are trying to do across the entire group,” says Brennan. “We have carefully chosen the correct brand for the property, we are putting in the right investment, and we are bringing the product to a certain standard.”
Amaris’ 73 hotels comprise 13,000 rooms and more than 5,000 staff. It has five hotels in Ireland and one Jurys Inn in the Czech Republic. The rest are located in Britain. Group revenues last year were €470 million, with earnings before interest and tax of €122 million. Its asset valuation is about £1.5 billion (Amaris generally reports in sterling).
Amaris is broken into three operating divisions. About 36 hotels now operate as Jurys Inn, after the brand was extended by Brennan to a further eight properties in the UK. Thirty hotels operate under the French brand, Accor. The remaining seven hotels comprise Amaris’ international division, operating under global brands such as Hilton Garden Inn and Doubletree by Hilton.
Lone Star is said to be eyeing up a possible future flotation of the group for £2 billion (€2.4 billion), if market conditions hold up. As part of this, Brennan is spending a total of £125 million upgrading rooms across the group, as well as a handful of extensions, including the one in Dublin.
Brennan says to think of Amaris as almost like IAG, the owner of British Airways, Aer Lingus and Iberia. “It is a holding company and not a brand. It is designed to capture a range of hotels and brands, but all within the mid to upper-mid market level.”
Brennan is one year into his plan to whisk the disparate Amaris properties into a coherent group, and the end is in sight. Extensions are nearing completion at two large hotels in Scotland, which will switch to brands from the Hilton family in coming months. With the exception of the Dublin extension, the work to create the Amaris business will be substantially complete by the end of 2016.
“By doing the things we have done, the operational improvements, the targeting of better Tripadvisor ratings, the capital investment and everything else, we believe all of those things will combine to improve performance,” he says. “It will take time, but we are already seeing green shoots. In 2017, we hope to get the real uplift in revenue.”
The business will then be optimised for Lone Star to capitalise. A flotation is possible, he says, but the timing and other details are up to the shareholders.
Prickly investment
Whenever a flotation happens, it is likely to be lucrative for John Brennan. In December, he and his former chief financial officer from Jurys Inn, Cormac Ó Tighearnaigh, were issued with almost €20 million worth of shares in a company called Prickly Pears. The shares were issued to acquire their interest in Jurys Inn.
Brennan is coy about the details: “In private equity, one of the benefits is you get to invest real money and be aligned. That’s what happened with the last investment, and that’s what will happen with this one.”
Ó Tighearnaigh has since moved on, to be replaced at Amaris by Donal Rooney, Nama’s outgoing chief financial officer.
Brennan is a hotelier to the tips of his fingers. His father, also John Brennan, ran the Intercontinental hotel in Dublin, which eventually became Jurys Ballsbridge. His brother Michael Brennan runs the Killarney Hotel group, which operates the Europe Resort.
Did John snr teach him silver service? Is that how he got started?
“My father didn’t know how to do silver service,” Brennan says. “He was an accidental hotelier. He was working in sales for an airline, and the company wanted a sales manager for their hotel in Dublin. That’s how he got into the business.
“He didn’t teach me operations, but he taught me about relationships and credibility and delivering on your promises.”
Despite fatherly attempts to steer him away from the industry, Brennan trained in the Cathal Brugha Street hotel school,then joined the Four Seasons group, for which he worked all over Europe, Asia and North America. Issy Sharp, the legendary group founder and still its chairman at 84, was something of a mentor to the young Brennan.
He came home in 2000 as general manager of the Four Seasons in Ballsbridge, which is now, coincidentally given his family heritage, the Intercontinental Dublin. He joined Quinlan Private in 2007 to oversee the group’s hotel interests after it bought the Jurys Inn group in a high-watermark deal of the last boom. Then came the crash.
“For the first few months I saw the positive side of private equity,” he says. “Then, from 2008, I saw the challenges that came with the economic crash. But when I think about how I acquired my toolbox of skills, that was an incredible experience.”
Brennan stepped out of private equity and back into the hotel business proper in 2009, when he was appointed chief executive of the Jurys Inn group. One turnaround job and a balance sheet restructuring later, the business was sold to Lone Star. Soon afterwards, the Amaris business was born.
Time sensitive
Brennan now spends half his time in Dublin and half on the road, visiting properties in the group or speaking at hospitality conferences.
“I’ve learned to section off the various bits of my life. Weekends are exclusively for my wife and our daughter. I do Fridays and Mondays in Dublin, and on Monday evening, I get back on the road and do my travel.”
Brennan believes the Irish hotel industry can absorb the “blip” that will come with Brexit. British tourists are this country’s biggest source market, and Ireland has become less competitive against sterling overnight.
“The real question is, will demand continue to grow?” he says. “I think it will, and I think there is enough underlying growth there for the Dublin market to absorb. We are seeing plenty of global growth. There might be a slight blip one year, when we don’t grow as fast as other years.”
Still, most of Amaris’ hotels are in Britain and the group reports in sterling. There the effects of Brexit are harder to predict. If British economic activity severely dampened, that it will obviously affect Amaris. But the spin-off is that its leisure-focused hotels will receive a fillip from foreign tourists attracted by the effective price cuts wrought by cheaper sterling.
“The reality is that nobody knows what will happen,” Brennan says, “I’ve heard plenty of speculation but no real answers. We have resilient hotels, a cheap debt package – and it is getting cheaper because interest rates will fall.
“In the long run, Europe and the UK need each other. There has to be a solution.”
In the meantime, Brennan plans to just get on with it. It isn’t checkout time just yet.
CV: John Brennan
Age: 54
Home: Dublin
Family: Married to Doris (one of his "biggest influences") with one daughter
Something about him you would expect: "I loves to travel to new places, most recently Greece."
Something about him that might surprise: "I am an aviation enthusiast, but not necessary an airline travel enthusiast."
