Rethinking the playbook: how one hotelier cut services, and won profit

On my latest Hoteliers’ Voice podcast, I met a hotel owner who made some bold moves that go against the grain. And it’s actually working.

Take a stroll along Dorchester High Street (very local to me - love the old capital of Dorset, UK) and you’ll find shops, pubs, and cafés with funny names. Art galleries, museums, and charming churches. And the Sleeping Bear Hotel, with its crisp exterior and enthusiastic foliage. So what’s inside? You’d guess at a bar and a restaurant. A sunny breakfast room. Perhaps a small gym and spa treatment rooms too.

Wrong.

Inside the Sleeping Bear Hotel, you’ll find rooms. Rooms, rooms, and…more rooms – 29 of them, in fact.

For my latest Hoteliers’ Voice podcast, I chatted to the owner of Sleeping Bear Hotel, Tudor Hopkins, and Adam Hamadache, the CEO and Founder of digital growth agency, Formula. They tell me how their plan to shake things up for the hotel is working.

Challenging unprofitability

“I’ve been around the hotel business for about 30 years,” Tudor explained (and it certainly doesn’t seem like it with huge vibrant energy). Starting out in London hotels, he left the city, then bought and sold hotels in various locations. “Margins were tight, payroll was big. We struggled. I’ve always wanted to do something a little bit different, and I looked for a hotel in a city centre location where we could remove all the things that didn’t make money.”

Tudor ended up buying a former Best Western hotel on Dorchester High Street, and he made some bold decisions from the get-go. “We closed the restaurant, the bar, and all F&B,” he said. “We started using contactless check-in. The Sleeping Bear Hotel, Dorchester, is a city centre, room-only hotel – which might not sound exciting – but it is, because we’re actually making money. Our guests are voting with their feet, and we’re running at 85-90% occupancy.”

Stripping away unprofitable areas is working, shown by an array of impressive figures. Prior to the change in ownership, payroll at the hotel was running at 41%. It’s now 13%. Operating profits grew from 8% to 26% too.

The focus on ‘just’ doing hotel rooms has also brought additional benefits, and a great experience for guests. “Our guests go out into the community,” Tudor said. “For most hotels, their own ecosystem is that people come, they sleep, they eat, they drink, they leave. The local restaurants don't get a look in. We’re a partnership hotel. With us, guests go out.”

Hotel rooms, working harder

With a further seven bedrooms in the pipeline, once the old kitchen and meeting spaces are converted, the room-only strategy brings a laser-focus on room profitability.

Tudor currently uses the revenue management tool, RoomPriceGenie, for dynamic pricing. “But that doesn’t help in terms of cost of sale and OTAs,” Tudor said. When Tudor first acquired the hotel, bookings were 60% from OTAs, 30% direct, and 10% other. “We were heavily reliant on OTAs. Now I’ve gotten rid of everything else, it’s all about the cost of sale of every booking that comes to us. That age-old, how do we tackle the OTAs?”

With limited budget to hire digital expertise in-house, and wary of the “death by tools” situation so many hoteliers have to confront, Tudor decided to partner with Formula. Using its Hotel Growth Formula, the agency brought together SEO, PPC, web conversion, and reputation management to support the Sleeping Bear Hotel. “It can be really effective when those things start to work together,” Adam said. “We've found this holistic approach to work – at absolutely improving visibility, driving conversion up, and reducing reliance on OTAs, as it has done for Tudor.”

As a result of this work, OTA bookings have dropped to 25% for the hotel, with 65% direct bookings.

“I sold 540 rooms in February this year,” Tudor shared. “The old cost with OTA commissions was £5,700. The new cost, with only 25% coming through OTAs,  was £3,200. That’s a saving in February of £2,400. And that month was not very good; we've had a tough winter. From April onwards, we can double that saving.”

Keeping up with change

Tudor’s bold strategy is paying off now. But how can hoteliers future-proof their strategy when the pace of digital change seems to be constantly on fast-forward?

Adam believes benchmarking and staying on top of trends on a daily basis are critical aspects of this. Having the tools to capture and analyse everything from booking lead times and average room rates, to impressions and clicks, can help hoteliers track trends as they emerge. The team at Formula helps clients navigate the disruption caused by Google core updates, the latest developments in AI search, and everything in between.

“My role has changed wildly in the last two years,” Adam said. “Previously, I was fundamentally concerned about getting new business in and making sure we're delivering results. I've now got a third strand to my role, and that is keeping abreast of change. And we're going to see enormous change over the next two years in terms of where the bookings are actually happening, given that ChatGPT is going quite aggressive on encouraging the whole booking journey.”

Having the Formula team behind him gives Tudor peace of mind that the medium and long term strategy for the hotel will be taken care of. “I’m not as plugged in as I’d like to be,” he said. “I’m running my hotel, doing my stuff. [Formula is] telling us what's going on and they're advising us. You can go to a trade show and get overwhelmed by tech stacks, the greatest new thing, AI… And you come away with your head spinning. Adam and his team are doing that for us.”

A brave new direction for hotels

Following the same old hotel playbook isn’t necessarily the best way. With his approach to the Sleeping Bear Hotel, Dorchester, Tudor has taken all the best bits of his hospitality experience, and struck out in a new direction.

By fearlessly closing down F&B, automating check-in, and facilitating a connection between his guests and the local community, he has created a slick business model. And it’s one that has enabled him to stop spinning plates, and focus on maximising profitable room bookings, drastically reducing the reliance on OTAs in the process.

Perhaps more hoteliers should take a leaf out of Tudor’s book. Trust your experience. Act on the data. Create a hotel that is fit for our times. Be more Sleeping Bear.

Media Contact

Ryan Haynes

HOST | Director | Lead Consultant [email protected]