Andrew McKenzie is used to barbed comments that his success at The Vineyard at
Stockcross, Berkshire, owes to the deep pockets of the owner of the
five-star property. As one rival put it: “The Vineyard is a rich man’s
plaything.”
The genial Scot, who was named Hotelier of the Year last week, says that the
reality could not be farther from the truth – although he admits that it was
not always the case.
“When it opened ten years ago, I recruited a number of people from the Savoy.
It was a caricature of a hotel. We had top-hatted doormen, we had people in
tails, we had cloches.”
When Mr McKenzie arrived in July 1998, a few months after the opening, The
Vineyard was turning over £60,000 a month, with a payroll of £120,000.
“Eight years later, the turnover was £600,000 and the payroll was still
£120,000,” he said. “It needed some pretty severe surgery to turn it around.
A lot of damage was done in the early days, with some of the pricing and
positioning we did then, so it’s taken a long time.”
He realised that things had got out of hand when the hotel decided to serve
cafetière coffee. He said: “The whole world uses chrome or brass cafetières,
but the restaurant manager decided to go to a silversmith to have special
ones made for us, which cost us thousands. There was no control mechanism to
say he couldn’t do that.”
Mr McKenzie, who started working in hotels when he was 13, near his home in
Bridge of Allan, near Stirling, undertook making The Vineyard friendlier and
more accessible. He said: “The idea was still to keep the quality and style,
but take away all the pomposity, and that’s how we’ve tried to run it ever
since. A bit more real, I suppose.”
However, he had yet to make it pay its own way, rather than relying on the
resources of Sir Peter Michael, its owner. “The problem was with only 33
rooms and the big infrastructure cost, we needed to add more bedrooms to
boost revenues,” he said.
“We were not going to make money with 33 rooms. We operate with a very heavy
cost base. You need to be staffed up just the same for Tuesday lunch as for
Saturday nights.” Not only did he persuade Sir Peter to fund expansion to 49
rooms, he also managed to coax him into doubling the size of the company’s
other Berkshire property, the four-star Donnington Valley Hotel, and add a
spa there, at a combined cost of £17 million. The Vineyard swung into the
black and profits at the nearby Donnington Valley quadrupled.
The result is a business with a turnover of about £15 million (of which The
Vineyard accounts for £6.6 million), debts of about £15 million and an asset
value of £52 million. Yet, despite the low gearing level, he said that
servicing that debt was not easy in the present climate.
“At the beginning of October, we had good revenue on the books and it looked
like it was going to be a good month,” he said, “but I went on a holiday for
two weeks and when I came back, just after the financial melt-down, the
revenue increase we’d expected for the month didn’t happen.”
He said that cash resources had been depleted through continuing investment,
accentuating the impact of the trading downturn. “Times are going to be
tough, and our cash projection at the end of 2008 has narrowed to a worrying
degree,” he said. “So what we have tried to do is sit down and make sure
that every revenue-generating opportunity is maximised. We’ve stopped
looking as long-term in our marketing and have become much more short-term
and tactical.
“We are employing an extra sales person to make sure that happens. But we have
also had to look at costs. We may have to close the restaurant on unpopular
days just to conserve a bit of resource. Our main plan is to eliminate
whatever the customer cannot see. But there’s no magic wand.” To drum up
business in The Vineyard’s restaurant, renowned for the cooking of John
Campbell, its chef, the hotel has started to offer midweek lunchtime deals,
with starters and desserts at £5 and a main course at £10 – astonishing
value for a restaurant with two Michelin stars.
The “tactical” approach to marketing also means price cuts on accommodation on
quieter days. So what does it cost to stay at The Vineyard? “On a Saturday
night, you would typically pay, for dinner, bed and breakfast for two,
around £600. But it could be £350 on a Friday and £250 on a Sunday. It’s
about trying to manipulate demand and move it to where you’ve got capacity.”
For now, the downturn has put paid to Mr McKenzie’s ambitions to expand the
business by adding further hotels. However, he believes that he is capable
of running a bigger business. “The plan, taking a long-term view, is to
expand,” he said, “but we’ll batten down the hatches for a while. I think,
being candid with you, we have to be careful it’s not our own blood on the
carpet.”
Founder’s portfolio
The Peter Michael Collection, the business run by Andrew McKenzie, takes its
name from its owner, Sir Peter Michael, who made his fortune in electronics
as the founder of Micro Consultants.
Sir Peter went on to found Quantel, a maker of digital special effects systems
for television and film production. He merged his interests with UEI, a
quoted company, becoming chairman, and oversaw its acquisition by Carlton
Communications in 1989. He led the turnaround of Cray Electronics and in
1992 founded the Classic FM radio station, later sold to GCap Media, now
part of Global Radio.
In the 1980s, Sir Peter bought a vineyard in Sonoma Valley, California, and
developed the Peter Michael Winery, now rated as one of the world’s finest
wine estates.
Sir Peter, who is chairman of the Pelican Cancer Foundation, became involved
in hotels as a minority investor in Foley Lodge Hotel, an 18th-century
former hunting lodge, which he later bought out in 1996 and reopened two
years later as The Vineyard at Stockcross, with 33 rooms, later extended to
49 rooms. He had also bought the nine-hole Donnington Valley Golf Club, to
which he added a further nine holes and a 58-room hotel, later doubled in
size to 113 rooms.
The Peter Michael Collection consists of the two hotels, the golf club and spa
and The Vineyard Cellars, a specialist wine merchant.
Sir Peter’s interests include Highcross Strategic Advisors, a property
investment fund that has seven hotels leased to a third party, Folio Hotels.
McKenzie advises the fund on its hotel investments.
C.V.
Born: December 21, 1961
Education: Wallace High School, Stirling; Carlett Park College, Wirral
Career: 1978-80: Trainee, Stakis Hotels; 1980-81: head waiter,
Royal Hotel, Bridge of Allan; 1981-82: St John’s Hotel, Solihull; 1982-84:
Prince of Wales Hotels (Chester, Southport); 1984-85: assistant
manager, De VereRoyal Bath Hotel, Bournemouth; 1985-86: assistant
manager, George InterContinental, Edinburgh; 1986-90: general
manager/deputy, Thistle Hotels (Edinburgh, Dunfermline); 1990-98:
general manager, Shire Hotels (Bristol, Penrith, Carlisle); 1998-present:
managing director, The Peter Michael Collection
Hotelier of the Year
2008 Andrew McKenzie, The Vineyard at Stockcross, Newbury
2007 Michael Gray, Hyatt Regency London-The Churchill
2006 Richard Ball, Calcot Manor, Tetbury
2005 John Stauss, Four Seasons, London
2004 Patrick Elsmie, Gleneagles, Auchterarder
Organiser: Caterer and Hotelkeeper
Sponsor: Louis Jadot
