Ireland’s Doyle Collection Revamps Luxury Hotel Strategy

Skift Take

This family run luxury hotel group is a tiny player. But the strategy of new CEO Gordon Drake, who previously sold Six Senses to IHG and Fairmont Raffles to Accor, how investors are positioning indie brands in the post-pandemic era.

Sean O’Neill

To better understand the independent luxury hotel scene, I recently sat down with Gordon Drake, who last year became CEO of the Doyle Collection — an Irish family owned group of luxury hotels operating in Dublin, Cork, London, Bristol, and Washington D.C.

Drake knows his way around luxury hospitality investment.

• In 2017, Drake joined Six Senses as chief financial offer. He sold the business in 2019 to IHG (InterContinental Hotels Group).
• He previously sold Fairmont Raffles to Accor while he was the chief financial officer of Kingdom Hotels in Dubai, where the portfolio had more than $14 billion in assets at the time.
• He’s been a board member of the Savoy Hotel in London and Movenpick Hotels and Resorts and a treasurer at Rocco Forte Hotels.
• He’s been chief investment officer at Westmont Hospitality, one of the world’s largest privately held managers and operators of hotels.

The Irish family that owns Doyle Collection tapped Drake to help make their investment program in the brand as effective as possible. Their upmarket portfolio includes eight properties:

• In Ireland, two luxury hotels: The Westbury in Dublin and The River Lee in Cork. And a midscale city hotel: The Croke Park in Dublin.
• In the UK, three luxury hotels in London: The Bloomsbury, The Marylebone, and The Kensington. Plus: a city hotel in Bristol’s Harbourside area: The Bristol.
• In the U.S.: The Dupont Circle in Washington, D.C.
• The family company fully owns all of them except one on a long-term lease.

The Doyle Collection is back in the black after a rough pandemic. The owners kept the faith because of past successes in hotel ownership.

• The Doyle/Gallagher/Beatty families made an estimated billion-dollar profit (about €950 million) by buying the Jurys Inn brand of budget properties for about $225 million in 1999 and selling it for about $1.5 billion in 2007.
• It’s back in the black after a rough pandemic. The company reported a pretax profit of roughly $9 million (nearly €8 million) versus a loss of roughly $100 million (€90 million) in 2020.
• “The company is very, very well capitalized,” Drake said, meaning its debt is roughly under a third of annualized revenues, below even a typical real-estate investment trust. “Compared to all other hotel companies I’ve ever worked for, as well as my knowledge in the market, it is as conservatively leveraged as any. That was one of the appeals to me when I was joining and doing my due diligence.”

Over the last four years, Bernie Gallagher, chair of the company, has pushed a roughly $70 million (€65 million) investment to refurbish the properties. Her effort has included adding luxury suites, refreshing bedroom decor and furnishings, and investing in bars and restaurants.

• All properties have been getting upgrades. In a five-year program, it will set aside a mid-single-digit percentage of cash flow for maintenance and enhancements via capital expenditure while still paying shareholder dividends.
• A case in point: The Westbury was already in good shape, top-ranked last year by Conde Nast Traveler readers among all hotels in the country. The group is renovating the top floor suites to “the highest standard for opening in June.
• Another example: It’s looking to elevate the position of its property in Cork — a city that attracts demand from American corporate travelers — by taking the hotel from four stars to five. “That’s a journey, but we’re investing.”
• “I see the Doyle Collection more as an umbrella rather than a set of brand standards where you will always have the same room when you go to wherever you go,” Drake said. “We have five luxury properties and three urban, upper-upscale properties.”

Acquisitions are possible, but not likely for this year.

• The group will consider adding assets either outright or in capital partnerships but it’s in no rush.
• “Real estate is too highly-priced right now,” Drake said. “Now is not a time to buy.”
• “Once prices adjust, I think we’ll look at getting another one or two hotels in the UK and Ireland, but opportunities may lie with perhaps three or four in European gateway cities like Vienna, Madrid, or San Sebastian,” Drake said. “We’d be happy to lease or do another arrangement. Also Chicago, Boston, and New York — probably in that order.”

Drake has been fine-tuning the machine since he took over in July.

• “The first thing that I’m trying to undertake is putting the right structure and put the right people at the top,” Drake said.
• “I’m hiring two new general managers in London that have the pedigree and experience level that I really do feel elevates what we what those hotels to represent,” Drake said.
• He’s bolstering the brand’s sales and marketing to be more “fearless” and “agile,” hiring shortly a new chief marketing officer who has worked at luxury brands outside of hospitality. Her task will be to better understand the sub-audiences the group should try to attract as guests.
• The marketing work will be linked to operations because the group will need to adapt the experiences it provides to help boost repeat business. The company is, for example, piloting at one property Alice’s software for digital guest engagement.
• The company’s customer relationship management software and clunky website will likely be upgraded over the next year. “For instance, when you’re sending a guest a pre-arrival email, you want the language right so that it doesn’t sound a robot generated it,” Drake said.
• “One thing that’s changed is that, five or 10 years ago, sales and marketing used to be disciplines that were melded together and led by a director of sales and marketing,” Drake said. “That reality no longer exists. Marketing is much more data and analytics driven and its own field. We separately have to build up our sales team as specialists.”
• He’s hiring a new chief commercial officer, too.
• To help with distribution, Doyle Collection belongs to the Global Hotel Alliance, which, in effect, is a loyalty scheme. It’s looking for sales event partnerships with like-minded groups such as the Kempinskis of the world. “Holding hands to help with each other,” Drake said.
• He believes a “community orientation” where each hotel engages with local businesses and tries to become part of its neighborhood will help create a sense of place for guests.

I’m intrigued at how Drake and his backers have confidence that “small but mighty” independent hotel groups in the luxury category can hold their own against the behemoth global brands.

• They’re betting on an era where a select group of discriminating consumers increasingly seek the experiential side of travel.
• For Drake, boosting scores on guest satisfaction surveys and boosting repeat visits are the keys to future growth because occupancy and revenue per available room can be lagging indicators distorted by external factors. Those objectives can help the company focus on what’s most important. For guest satisfaction, it uses tools from Shiji ReviewPro for some needs.

Drake plans to lean on the group’s Irish heritage, too.

• “We’re hoping that being an Irish-heritage, family run company will attract the right people here, including for group business such as for conferences and events,” Drake said.
• The Irish national brand is powerful, Drake said. He wants to make sure each hotel plays that up with subtle touches, such as by offering Guinness breads and Barry’s tea for breakfast.
• “At one or two properties, I would love to find little spaces to make at each maybe a speakeasy-style Irish whiskey bar, where we mainly invite VIPs and have only room for maybe a dozen guests,” Drake said.
• “Today’s world can be unnerving, and if we were told right now that the nukes were coming from North Korea or wherever I’d be very happy to spend my last minutes with my wife and some Irish people at the bar,” Drake said. “If you’re picking the nationality, you want to pick Irish people because you know that in those last four minutes, you’d have a laugh.”

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