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Nelly Terraces

Planning Application. Bit of good news.

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dixie

Vlad's no mug when it comes to business. I've no doubt there'll be a major operator waiting in the wings to run the hotel as soon as its built. Its becoming increasingly popular for leading hotel chains to manage hotels located within football stadiums and with Tynecastle benefits by being relatively close to city centre.

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Only a Game
tourist figures for edinburgh have GROWN each year for the past 10 & are unlikely to decrease in the near to long term future, unless the council cancel the festivals and the fringe!

more festivals are planned in different months as well.

4000 extra folk a month would not even register on the radar.

edinburgh does not have enough hotel accomodation taken on a year round basis. the fact that the hotel may not be full say in april or oct is neither herenor there; its the bigger longer term view that people in the business look at.

edinburgh used to have clearly defined tourist "time" (aug/sep & Dec) but no longer. we are a year round destination.

 

 

I am sorry to harp on but April and October are PRECISELY where it matters. Every hotel in Edinburgh should be full throughout the festival, rugby weekends and hogmanay, thats a given. Most are fairly full in July and September. What is known as the "shoulder months" is where the weak ones struggle and the strong ones make their profit.

 

If your only full in July, August September and another couple of weekends, and not doing well in the other months, you're in serious trouble. There are not MORE festivals on the horizon. What is about to happen is that the traditional August festivals are moving months to get cheaper costs, the Film festival has already done this for 2008 and more will follow. Thats not new business though. Its merely business displaced from August into another month.

 

You are right that 4000 extra a month to the city wouldnt register in the whole scheme of things. Thats because that 4000 extra would be comfortably swallowed up by existing bed stock. 4000 people a month in the one new hotel of the size Hearts are proposing is the minimum it would take to make a profit. Not to mention the 5 other competitor city centre hotels, all of which will probably be up and running well before the Hilton Jambo.

 

Edinburgh is indeed a year round visitor centre, and tourist numbers have indeed been growing, especially for corporate guests, but seriously and honestly there isnt enough off peak business around to make all hotels, even the decent ones, turn a DECENT profit. Most survive with a tiny profit margin after operating costs. I have no doubt the Hearts hotel would fall into that category. A tiny profit annually from a massive investment doesnt seem to me to worth the trouble.

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Thunderstruck

Most of what has been batted about above examines the prospects of a hotel surviving on the tourist trade. This, however, is far from the only source of income. Functions, conferences, conventions and so on are highly lucrative and major money-spinners. A hotel within Tynecastle would have a unique (in Edinburgh) added attraction, namely the stadium.

 

Take a walk into the larger hotels any day of the week and check out the number of separate events taking place. Discounted rooms may well be available at weekends but are hard to find mid-week in the larger hotels. Budget hotels and glorified guest houses operate in a separate market.

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Only a Game
Most of what has been batted about above examines the prospects of a hotel surviving on the tourist trade. This, however, is far from the only source of income. Functions, conferences, conventions and so on are highly lucrative and major money-spinners. A hotel within Tynecastle would have a unique (in Edinburgh) added attraction, namely the stadium.

 

Take a walk into the larger hotels any day of the week and check out the number of separate events taking place. Discounted rooms may well be available at weekends but are hard to find mid-week in the larger hotels. Budget hotels and glorified guest houses operate in a separate market.

 

You only have to have a look at a typical Edinburgh hotel on Lastminute.com or somewhere like that to see that the rates are higher at the weekend. Edinburgh hotels are more full at the weekends. There is more demand than during the week and thats why the rate is higher.

 

Yes functions, conferences, meetings, seminars, weddings, food and beverage

all help with revenue but by far the biggest proportion of any hotels revenue comes from bedroom sales. The stadium will have no impact whatsoever of general revenue except on match days (20 a year if your lucky) when the food and beverage revenue will be maximised provided the pricing is right. Do a nice pre-match lunch at a tenner a head and beers at local pub prices and you'll fill the place most match days. Try and get greedy and push it up to 15 or 20 quid and 4 star hotel beer prices and you'll get your fingers burnt.

 

A typical 4 star hotel with 180 - 200 bedrooms in Edinburgh should be looking at pulling in something like 400-500k a month in total revenue, of which 300k would be bedroom sales (goes up and down according to season but what you lose in January and February you should make up in the busier months.) Revenue should be in the region of ?6million a year.

 

From that ?6 million you have to take running costs such as wages (the largest cost) maintenance, commissions to agents(Vlad wont like that one when he finds out about it) buying in supplies, VAT, all sorts of hidden costs. If you clear ?1.2million to ?1.5 million operating profit p.a from that lot youve done very well.

 

Operating the hotel sucessfully by the club would be the most profitable outcome in all this. But its also the highest risk unless you get a top management team in who know what they are doing (and most importantly in this case, get left to get on with it) A top management team increases costs obviously but ensures a much greater chance of profitability.

 

Next best IMO would be leasing the building to an operator or having them operate it for you for a fee (Hilton for example) ?800k - ?1million a year ought to be possible from this.

 

The quick fix is build it cheap and sell it expensive. A one off pay back of ?5-?6 million profit could be achieved doing it that way but you'd have to have a buyer on board from the very start and I'm not convinced theyve got that or even intend to do that.

 

I'd imagine your all bored ****less with this now but its massively interesting to me how they are going to make this work in a worthwhile way. Maybe we should let this rest until we know more about what they plan to do with the hotel.

 

Apologies to those who prefer to talk football.

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davemclaren
You only have to have a look at a typical Edinburgh hotel on Lastminute.com or somewhere like that to see that the rates are higher at the weekend. Edinburgh hotels are more full at the weekends. There is more demand than during the week and thats why the rate is higher.

 

Yes functions, conferences, meetings, seminars, weddings, food and beverage

all help with revenue but by far the biggest proportion of any hotels revenue comes from bedroom sales. The stadium will have no impact whatsoever of general revenue except on match days (20 a year if your lucky) when the food and beverage revenue will be maximised provided the pricing is right. Do a nice pre-match lunch at a tenner a head and beers at local pub prices and you'll fill the place most match days. Try and get greedy and push it up to 15 or 20 quid and 4 star hotel beer prices and you'll get your fingers burnt.

 

A typical 4 star hotel with 180 - 200 bedrooms in Edinburgh should be looking at pulling in something like 400-500k a month in total revenue, of which 300k would be bedroom sales (goes up and down according to season but what you lose in January and February you should make up in the busier months.) Revenue should be in the region of ?6million a year.

 

From that ?6 million you have to take running costs such as wages (the largest cost) maintenance, commissions to agents(Vlad wont like that one when he finds out about it) buying in supplies, VAT, all sorts of hidden costs. If you clear ?1.2million to ?1.5 million operating profit p.a from that lot youve done very well.

 

Operating the hotel sucessfully by the club would be the most profitable outcome in all this. But its also the highest risk unless you get a top management team in who know what they are doing (and most importantly in this case, get left to get on with it) A top management team increases costs obviously but ensures a much greater chance of profitability.

 

Next best IMO would be leasing the building to an operator or having them operate it for you for a fee (Hilton for example) ?800k - ?1million a year ought to be possible from this.

 

The quick fix is build it cheap and sell it expensive. A one off pay back of ?5-?6 million profit could be achieved doing it that way but you'd have to have a buyer on board from the very start and I'm not convinced theyve got that or even intend to do that.

 

I'd imagine your all bored ****less with this now but its massively interesting to me how they are going to make this work in a worthwhile way. Maybe we shouldlet this rest until we know more about what they plan to do with the hotel.

 

Apologies to those who prefer to talk football.

 

I have to say that, for a porter, you seem to know your stuff. :)

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Only a Game
I have to say that, for a porter, you seem to know your stuff. :)

 

chambermaid actually (except they dont call them that anymore) :)

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maroonedinoz

didn't a certain two chaps called Duff and Gray think that they could finance a football team on the revenue earned from hotels and the like?;)

 

Whatever became of them I wonder>? ;)

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