The big interview: Andy Townsend, CEO, Legacy Hotels & Resorts

by | 16 Nov 2022 | Interview, People

How does UK-based Legacy Hotels & Resorts balance its three roles as a hotel owner, developer and manager?

TOPHOTELNEWS sat down with CEO, Andy Townsend, to find out.

Special space

With the firm reaching 17 years old in September, it has come a long way since it first built a 75-room hotel in central Preston, which it still operates under the Legacy brand. Townsend analysed: “We’re effectively in a slightly special space compared to other mainstream management solutions, and we’re also able to play in both the branded and unbranded space.

“That puts us in an environment where we are managing hotels ourselves, but we also asset manage hotels for others.”

Working with competitors

As Legacy essentially asset manages for some of its competitors, how does the firm make that work? “It just means you have to change the tempo of your pitch on a daily basis,” Townsend explained. “But effectively I think we probably have a bit more of a 360 degree view on everything because we end up sitting in different seats at different times.

“When we’re involved in any hotel development project, whatever service level it’s at or when you get into the brand debate, we shouldn’t lose sight of the fact we’re in the business of selling a good night’s sleep. The most perishable product we have is last night’s unsold rooms. You can’t sell them so you’ve got to get the room brief right to begin with.”

Predicting demand

According to Townsend, getting into the nitty gritty of hotel projects means: “When you are developing a hotel you’ve got a lot of vanity kicking around. People have a lot of ambition but it’s really hard to nail it down. In some cases the trajectory you’re taking a feasibility view on is five or six years ahead of the initial conversation. You have to work out who the customer base is now and who it’s going to be, particularly in a mixed-use development. But it’s increasingly difficult to know who the customer is in the next three to six months, let alone in three to six years.”

He cited a recent example of Novotel Liverpool Paddington Village which opened in the English north western hub in July this year. “That’s a project that was conceived five years ago over a beer and a blank sheet of paper,” he revealed. Starting from a fairly loose brief, project partners Accor and Legacy took into account the Paddington Village development’s bioscience and technology centre hub ambitions, looking at the sleep density and length of stay for customers. “There was enough information to suggest that extended stay would be a component,” said Townsend.

Initial involvement

Legacy is usually involved with a hotel project in its infancy. “Early on, we can take a clear view of who we think the end user of that hotel project will be,” he commented. “I want to be in at the feasibility briefing stage, where we’re talking about key count, service level or brand position.”

Currently the firm is working on nine sites in various different stages, some projects using its own capital and others utilising private investors. According to Townsend: “Our pipeline is stronger than it’s ever been. This is year three of ‘a good year’. We had our best trading year as a management platform last year and we’re going to beat it again this year. That’s through our existing portfolio, where we’re very active in terms of refurbishment, redevelopment and repositioning, and through developments of new hotels.”

Hampton archetype

One on the slate at the moment is Hampton by Hilton Rochdale, a 146-room site due for completion in Q3 2023. Part of a £50 million mixed use scheme in Rochdale town centre, the 55,000 sq ft hotel will be spread over seven storeys.

The latest partnership with the Hilton Worldwide brand stemmed from Legacy’s involvement in the 150-key Hampton by Hilton High Wycombe, which opened last year. Townsend detailed: “The £21 million development became the prototype for the new generation of Hamptons being rolled out.”

Reading revival

Legacy is also shepherding two further Hampton sites in Reading and Glasgow, as well as a separate project in Telford. Reading especially is going to point the way for the firm going forwards, with Townsend outlining: “We own a derelict site immediately opposite Reading railway station. It’s a good example of the next sort of project where we’re going to be able to put something that’s vibrant and has purpose into an otherwise redundant space.”

Hampton by Hilton Reading is going to be a 22 storey tower block and deliver 179 Hampton by Hilton bedrooms when it opens in 2024. The tower is also slated to feature five floors of office space, a bar, restaurant and a ground floor retail unit.

Upwards trajectory

“We’re pleased with the upwards trajectory curve of our projects,” Townsend noted. “We’ve showcased what we’ve done. The fact we are an owner, developer and manager means that when there are stakeholders in play they want to come to us to help them with projects. We’re not just a hired hand. We can actually show them what we’ve done with our own money as well, like the High Wycombe site, which Hilton uses as a showcase reference.”

When it comes to picking its own supply partners, Legacy’s criteria are: “They have to have a fit for purpose product and service offer. They have to be value for money and have the right attitude to supply.”

Growth and delivery

So would Legacy consider heading outside its UK specialism to grow further? Townsend reported: “We haven’t invested internationally, but we have projects in southern Spain, Sweden and North Macedonia.”

As for current market conditions, he summed up: “The only trend is lack of funding. It’s our job to bring financial opportunities to the table, and the hotel chains provide the branding. The single biggest issue is cost per key to deliver – the rest of it’s just noise. It’s a huge problem and it’s not going to get easier anytime soon.”

Many TOPHOTELNEWS articles draw on exclusive information from the TOPHOTELPROJECTS construction database. This subscription-based product includes details of thousands of hotel projects around the world, along with the key decision-makers behind them. Please note, our data may differ from records held by other organisations. Generally, the database focuses on four- and five-star schemes of significant scale; tracks projects in either the vision, pre-planning, planning, under-construction, pre-opening or newly opened phase; and covers newbuilds, extensions, refurbishments and conversions.

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