We're so excited to announce the second of our outstanding key note speakers for The AHC 2017, Greg Dyke. Greg will be taking to the stage on the morning of Thursday 11th October.
David Eisen, the Editor-in-Chief of Questex Hospitality Group, spoke to Greg, who in 2015 became chairman of Vine Hotels, a hotel owner and operator with a portfolio of branded and independent hotels. In March, the group acquired its first hotel in Manchester, the 148-room Best Western Cresta Court.
David spoke with Greg two days after the Manchester terrorist attack.
AHC: What is the state of the UK now following the terrorist attack Manchester and will it impact international travel to that area?
Dyke: People are very sad and shocked really. It's normally a few days after that when people begin to ask the more difficult questions. [As for travel], it's interesting, there are all sorts of problems with international travel in certain places. Turkey, as I understand it, is having a really tough time. But I doubt whether this attack will have a long-term impact. Paris has had a series of them and that has had an impact, but I don't think one terrorist incident actually has any impact.
AHC: You have had a long and storied career as a media personality in the U.K. How do you compare the British media to the U.S.?
Dyke: We've got it better and worse. From my time at the BBC, during the Iraq war, we'd send people over to interview major American figures and they were quite shocked by how tough our questioning was. I was in New York for some of the war and I was quite surprised back then that the broadcasters had all picked up their stars and stripes and all gone to war, and even people at CNN hadn't questioned the war. British broadcasting doesn't have that tradition. That's why there's always a conflict. You usually get a dust-up between the BBC and the government of the day.
But I think some of our tabloid post is worse than the U.S., and it's much more intrusive in people's lives, and can be very unpleasant. But, of course, the majority of the media in this country is national, whereas the majority of media in America is regional. I remember when I first went to America as a kid. When you get there for the first time, you realize how big it is and how different it is and how regional it is.
AHC: You're surely following what's going on in the U.S. and President Donald Trump. What is your take on the media and "fake news?"
Dyke: Donald Trump seems to be able to claim anything he doesn't like as fake news. The Trump phenomena is fascinating. I do a show every week for Sky Television where we discuss Trump quite a lot. I'm not sure that the election of Trump does much for the American reputation overseas. I think we all can't believe that you'd do this.
AHC: It's not so much unlike what happened with Brexit, is it?
Dyke: It is not dissimilar. We're going to be taken out of Europe, and if you look at who voted [for exit], it was disproportionately older people and less-educated people. I suspect the Trump phenomena is quite similar, isn't it?
AHC: Back to Trump, you are chairman of a hospitality group now, what is your opinion of the travel ban executive order that he's trying to push through?
Dyke: It's hard to see the rationality. Trump's problem is, it appears he thought you could run a country like you can run a company. At university, I studied politics during Watergate. Trump and Russia has all the feelings of Watergate.
AHC: You were vocal during News of the World phone-hacking affair. Can you put that in context now when we talk about hacking that goes on now as it relates to Russia, with Wikileaks—what does it say about the world we all live in?
Dyke: It's a different world to the one in which I was a professional journalist for many years. We used to talk about the communications revolution without really understanding what it was going to be like.
AHC: You are the current chairman of Vine Hotels. How does a media type, a former head of a football association find his way into the hotel business? Why did you want to enter it and what do you like most about it?
Dyke: It's like so much else of my life. It almost happened by mistake. I've always done some other things on the side because I was lucky, I made some money and in my late forties, early fifties, I put it to use in other things. I originally bought a golf club. Which is now a sort of golf hotel, which I've had for 20 years. And then I bought a small rather nice hotel in Sheffield.
I got to know some people in the hospitality business. And about two years ago, I was chairman of a big theater company and when we sold the company I made quite a bit of money and I was sitting on a lot of cash. And I go, 'Cash is not my juice' in an environment where they pay you half a percent interest on it, which is what it's like here. So I decided with one of the guys I met in the hotel business if there was a hotel business we could buy that would be profitable and give me a decent return on some of the money. And we've now bought four hotels in the last 18 months.
AHC: What attracts you to invest in hotels as an asset class?
Dyke: It's a much better return on your money than anywhere else, in my estimation. The analysis we did on each of the last hotels we bought was: 'If we had a recession as bad as the last one, which is hard to see, but if we did, would we survive it?' With interest rates still low you can borrow money, and as long as there isn't another major recession, we feel pretty confident.
AHC: What is your overall acquisition strategy? What is your vision for Vine Hotels?
Dyke: On a lot of what we've bought, the basis is: Is there something else we can do with them? We bought one in Sheffield that we're trying to do a big extension development on part of the land. We bought one in Southampton where we're going to try to do the same thing and build above the compound. Because I don't know what it's like in New York, but the housing business here has gone through the roof all over the place. So on three of the four we bought, one we built an extension, two we'll probably build an extension and build some apartments. Another one we've built some houses. So we reduced the capital. You do that over a couple of years, reduce the capital cost of building a hotel and then they're very good businesses.
AHC: The bulk of your hotels are branded by Best Western. They're the brand on Mosborough Hall in Sheffield. What's your relationship with them?
Dyke: I got to know them because when I bought Mosborough Hall, which was the first one I bought, it was the Value Best Western then, and we found them quite effective and quite good, so we've done some more with them.
AHC: It's quite interesting because Best Western in the U.S. has a different look or feel or connotation than in Europe. A hotel like Mosborough Hall, which has a long storied history, doesn't necessarily fit into what you think of a Best Western in the U.S.
Dyke: I get that. I think though that their old branding was a bit too American—it didn't suit here. I think the new branding is a lot better.
AHC: Are you a passive or involved investor/owner?
Dyke: I wouldn't say passive investment because there's quite a lot of my money involved. I'm involved in all discussions, but I obviously listen to the hotel professionals and take their advice because they wouldn't want to advise me about broadcasting and I don't want to advise them about hotels. So I sit with them and I listen to what they say and try to add some ideas in there. But I'm not by nature a hotelier.
AHC: Is there a particular number of hotels you'd like to see Vine get up to?
Dyke: No. We pitched for one recently that we didn't get, and we think the price it went for was beyond what we would have paid. We look around for, not bargains, but we look around for ones that give you a good business return. I do think we'll rush to buy more this year. Once we're selling some of the apartments we're building and things like that, then I think we'll buy some more. But if something interesting came along that we really thought was worthwhile, we'd go for it.
We decide to buy a hotel and see if we can we run it better than it was—can we do something with it? Can we build an extension or build more rooms?
AHC: Would you ever look to build a hotel, or is via acquisition how you'll grow?
Dyke: I doubt whether we'd build one, but I also was in the golf business, and what I've learned from golf clubs is never build a golf course. Let someone else build the golf course and they can lose the money, and you can buy it off and receive it!
We haven't even invested in London because I think London is too expensive. We think there are some interesting things outside of London. That's what we've been doing.
Greg will be talking more about hotels and to our theme of 'Embracing Change, Seizing Opportunities' as well as his time as the Director-General of the BBC and what it was like during his period as the chairman of the Football Association at The AHC this October.
The key note by Grey will take place on Wednesday 11th October at 12.15pm. Join the hundreds that have already booked by clicking here.
AHC 2017 is dedicated to delivering an event that benefits UK hotel owner and operators; Greg is one of these. There are key areas of the programme that are sculpted to encourage peer to peer interaction and operational inspiration alongside show-rounds of local hotel openings, an exclusive registration rate, a hotelier dinner on night one and content that will help make a difference to your business. Please contact either Claire or Rowan to understand more.