THE FRIDAY INTERVIEW:John Brennan, Jurys Inns chief executive
IT’S JUST past 4pm on a Friday afternoon and the ground floor area of the Jurys Inns hotel on Custom House Quay is relatively quiet. It’s the calm before the storm.
"This will be packed in an couple of hours with people having something to eat before they go to We Will Rock You[the Queen musical at the nearby O2]," says group chief executive John Brennan as we settle into a quite corner of the restaurant for a chat and a cup of tea.
“We’re full here tonight, which is great,” he adds.
So it is, in this time of recession, which has put all hoteliers in Ireland and Britain to the pin of their collar. Jurys Inns is no different. Before Christmas, The Irish Timesreported the budget hotel chain's earnings would be down 30 per cent in 2009, from £43.2 million to about £27 million.
“We will be better than that,” he says, “not dramatically, but we will be better than that. The final quarter was better than expected.”
The full-year figures will be published in May. In 2008, Vesway Ltd, the Jurys Inns parent company, reported an after-tax loss of £22.2 million on turnover of £133 million.
Brennan insists that Jurys Inns has outperformed the market in Britain and Ireland, where revenue per room has declined by anything up to 20 per cent.
“It’s been a very challenging year for the hospitality industry as a whole, but we’re outperformed the sector.”
He puts this down to its “efficient labour model”, keen pricing and city centre locations. “We’re not comparable to Travelodge or Ibis,” he says. “There’s no hotels on motorway junctions in the Jurys Inns portfolio.”
One benefit from the downturn, he says, is that cost-conscious corporates have been happy to trade down to the Jurys Inns model.
“I don’t think they’ll be going back . . . they’ll be staying with us.”
Rumours have circulated in Dublin about the financial health of Jurys Inns, which was purchased for an eye-watering €1.166 billion in 2007 by Quinlan Private from the old Jurys Doyle group. This has left it nursing a hefty debt – £602 million in 2008 – with onerous interest payments (£41.6 million) and significant capital required for a promised expansion in Britain and continental Europe.
Without flinching, Brennan says the chatter is ill-informed. Last year, €60 million was raised from its two shareholders – Quinlan Private and the Oman Investment Fund – and a syndicate of banks to support the business.
“That has been very significant in providing cash and an appropriate amount of resources for the business,” he insists.
It also refinanced its debt last year, extending the maturity out to 2014 and shaving about £12 million a year off its annual interest payments.
“Having that extra time [to repay the debt] is hugely important,” Brennan says. “We have no issues in meeting our requirements for debt or capex needs going forward.”
He insists that Quinlan Private, which has seen the value of some of its assets plummet in the global credit crunch and which has parted company with chairman and founder Derek Quinlan, remains “very supportive of the business”.
Will Jurys Inns end up in Nama? “No,” says Brennan without hesitation. “I have no understanding of that. Jurys Inns is not going to end up in Nama.”
Have the owners written down the value of the business to reflect the collapse in property values and global credit crunch? “We would do that in 2009,” he said. “The audit hasn’t been completed yet, so it’s premature to say if we will or we won’t.”
To accentuate the positive, Brennan rattles through the developments around Jurys Inns over the past year or so. It opened seven new hotels in 2009, including one in Prague, its first foray into continental Europe. The chain now comprises 30 hotels with 7,000 rooms.
Brennan cites Aberdeen as a huge success for the company since its opening and he insists that its Inn in central Prague, which opened last September, is turning around after a difficult start. “The market in Prague had a really torrid time in the beginning of 2009, but it’s got progressively better. Our occupancy rate is in the 60s and we’ll build from there.”
Brennan said it will open Inns in Bradford and Portsmouth this year, although planned openings in Glasgow and Gateshead have been pushed back to 2011. “Delays in planning and in construction have pushed things out a bit,” he explains.
Jurys Inns is also spending £1.6 million on a new IT platform to drive revenues and reservations. Brennan also runs through a number of cost savings that the company has initiated. Some supplier contracts were “re-bid”, saving £1 million a year. It has shaved £400,000 off its energy costs and it is getting better bang for its buck on hotel renovations. It will spend £8 million upgrading properties this year, including at Custom House Quay.
“In 2008, it was costing £14,000 per room for renovations, now it’s costing £8,000 per room for the same spec,” he says.
Staff pay has been frozen but not cut. Bonuses are gone and some employees have been asked to take unpaid leave.
“Any changes that have been made have been by way of natural attrition and there’s less outsourcing,” Brennan explains.
The much-talked about expansion into central and eastern Europe – apart from the Prague opening – has been put on ice pending an economic recovery in the region.
The hospitality industry is in Brennan’s blood. His late father, Michael, was a legend in the old Doyle hotel group, helping to open the Burlington, Berkeley Court and Westbury in Dublin, all its properties in the United States and the Clifton Ford in London. “He would have been a right-hand man of PV Doyle’s for many years,” says Brennan proudly. His brother Michael is also in the trade.
Brennan spent much of his spare time odd jobbing around the hotels, doing everything from washing pots to collecting glasses and waiting on tables.
“My father thought becoming an engineer would be a better career than going into the hotel business,” Brennan says. He thought otherwise, taking a four-year hotel and management degree course at Cathal Brugha Street.
In 1984, he became a management trainee with the posh Canadian Four Seasons hotel group. Brennan spent 23 years with Four Seasons, climbing through the ranks and working in eight countries. His time in the United States has left him with a distinctive American twang to his accent.
He returned home in to oversee the launch of its Dublin property in Ballsbridge in 2001, an opening fraught with financial difficulties.
Brennan quit the Four Seasons in September 2007 to join Quinlan Private as director of hospitality and leisure.
He was later parachuted into Jurys Inns following the departure of Niall Geoghegan, who had stayed with the business following its sale by Jurys Doyle.
The three-star Inns couldn’t be further removed from the service ethic, luxury and premium pricing of the Four Seasons. Brennan prefers to refer to the Inns as a mid-market hotel chain and argues that there’s little difference in managing the two. “There are a lot of similarities to running a five-star and a mid-market hotel,” he says.
Brennan accepts that being a hotelier is “full on”, tough “on your personal life” yet a “rewarding career” choice.
“I think it’s a great career,” he says, albeit without getting too animated. “It’s much more sophisticated today than 10 or 20 years ago. There are very long hours and it’s very anti-social, but there’s much more structured training and career development. That’s all for the better because it needs to be a more attractive place for people to work.”
With that, we wrap up and head for the lift. He’s keen to show off his new-look bedrooms, but first we have to battle the pre-theatre queue for the buffet. Whatever about the O2 later that night, Jurys Inns was rocking.
ON THE RECORD
Name: John Brennan.
Age: 48.
Family: Married to Doris, they live in Donnybrook, Dublin.
Job: group chief executive Jurys Inns.
Hobbies: Cooking, reading, watching rugby.
Something you might expect: "Travelling . . . I passionately enjoy. My holiday of choice in the summer is walking in the Swiss Alps."
Something that might surprise: "I am interested in Irish contemporary art."
