Savoy hotel invests thousands in staff facilities amid rise in luxury competition
London's Savoy hotel has invested thousands in improving staff facilities amid increased competition for talent in London's luxury market.
Managing director Franck Arnold said recruitment challenges were "water under the bridge" but hotels had to work harder to retain staff as employees had become "fickle".
He told The Caterer a shortage of housekeepers meant the hotel had to delay reopening all its 267 guest rooms and suites after the pandemic until July 2022, while filings on Companies House show the Thames Foyer afternoon tearoom only returned to a seven day operation in October 2022 due to recruitment issues.
The Savoy has now spent almost £300,000 on a new team restaurant, launched a wellness room with a massage chair, opened a multi-faith room with space for employees to meditate or pray and created the Savoy Academy learning and development programme.
Arnold said: "We have more people in the market. Somehow, after the great resignation of Covid, people have come back to the industry. I believe a lot of people who went to other industries realised luxury hospitality is quite an attractive industry to work in.
"Our industry as a whole has reviewed a lot of things when it comes to salaries and benefits and conditions in general."
He said there was greater pressure on staffing due to the influx of rival luxury London hotel openings, including Raffles London at the OWO and the Peninsula London, as well as expansion projects at Claridge's and the Ritz London.
"We have some extraordinary hotels opening in London," said Arnold. "All that brings us to a competitive landscape when it comes to talent.
"Back in 2011 and 2013 when the Corinthia London and the Rosewood London [opened] that created a bit of disruption, but back then we were still able to hire people from Europe [before Brexit].
"Developing and nurturing the right culture at work is what gives us a competitive advantage in the city. It's about creating the right conditions which translates into revenue and profit. It's not rocket science, but it's what we need to concentrate on to create more profits."
Accounts for the Savoy's holding company Breezeroad Limited saw the company post an operating profit of £5.6m in 2022, up from a loss of £5.1m in 2021.
Pre-tax losses at Breezeroad Limited narrowed to £17.8m, down from a £26.7m loss the previous year.
However, the hotel saw a boom in demand with average room rates rising approximately £220 to £714, an increase of 45% on 2019.
Arnold said the losses were due to the debt structure of the business and the Savoy had completed a debt refinancing earlier this month.
"We are a very healthy operation and our trading is excellent," he added. "I would say that we should start seeing some very healthy results from 2025 from a pre-tax perspective.
"The restructuring of the debt means we should be self-sufficient in future."
Arnold also told The Caterer the hotel hoped to reopen the historic Simpson's in the Strand restaurant with a new partner next year, although nothing has been finalised.
The Savoy opened in 1889 and was the first purpose-built deluxe hotel in London. It is operated by Accor under the Fairmont Hotels & Resorts brand.
Image: Stu22 / Shutterstock
