25 September 2017

Cover Story


In and out... for a pound!
October 2006 12
Or the tale of how the luxury-budget Hoxton Hotel is taking on London’s hospitality establishment, selling room nights at a pound a night

SINCLAIR Beecham, founder of London’s first ‘luxury-budget’ hotel, describes himself as a customer, not a hotelier – and to prove it he's offering city-centre rooms for a pound a night, said a report.

His Hoxton Hotel in central London opened recently, selling 600 nights at just one pound ($1.90), including a light breakfast – a deal that the 48-year-old entrepreneur intends to repeat, said the report in Gulf Daily News.
"We are just trying to solve some of the problems that hotels tend not to do very well, or rip you off on," said Beecham, best known for co-founding the Pret-A-Manger sandwich chain.
In addition to cheap room rates, Beecham is hoping to entice customers by providing low-cost phone calls abroad, snacks and drinks at retail prices and free internet access throughout the hotel.
The Hoxton, dubbed a four-star hotel by Beecham and his investment partners, has modelled its price structure on the system used by budget airlines.
“We decided to put out an Easyjet-style pricing system,” Beecham said. “The (room) prices will go up. The point is you know what you're paying. You've got the best available room and the later you book the more you pay. We will not be knocking off rooms to companies just to get rid of them.
“What we’ve tried to do is put integrity” into the hotels business, he added. After selling rooms for £1, the Hoxton Hotel then offered a number of nights for £29, all of which were quickly snapped up.
During the remainder of 2006, customers can book a room for £59 per night during the weekend, while the rate increases to £79 Monday to Thursday.
Between January and September 2007 prices have been set at £99 during the week and £79 at the weekend.
According to the PKF business adviser group, the average daily rate for an occupied room at 183 mainly three-to-five star London hotels stood at £127.84 in July.
“The devil is in the detail,” Beecham said as he showed the modern looking establishment, built for £17 million on the site of a former car park. “If you don’t get the detail right you don’t stand a chance.”
Showing off an en suite shower-room, Beecham pointed to what he called a ‘real’ bar of soap, “not that cheap crappy stuff you find in other hotels”.
There is also free fresh milk and flat-screen televisions in all of the Hoxton’s 205 mostly double bedrooms. "What we’re trying to do is offer value," Beecham said.
The hotel industry “is about ripping off your customers. How much does it cost to make a phone call to America? Do you know for a minute? Two pence. So why would I charge you two pounds fifty? Why would I treat you like that?
“Then there's the minibar where you pay £3.99 for a bottle of water. The other day I had to pay £2.50 for a Kit Kat (chocolate bar). Hotels don’t normally make money on minibars which is the stupid thing. So what we’ve done is set up a little shop in reception and you can buy stuff at retail prices.”
Another novel idea will see the Hoxton renting out unoccupied rooms for six hours during the day at a cost of £19, allowing people to use them as offices.
“I don’t know how I’m received by the industry,” Beecham said when asked what competing hotels thought of his ideas. “I’m a customer, not a hotelier.”

Big ideas
• Easyjet-style pricing
• Free fresh milk and flat-screen televisions in guest rooms
• Rent out rooms in six-hour daytime blocks at £19 ($36)
• Low-cost phone calls
• Free internet access across the hotel
• Retail-priced fast moving consumer goods







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