King makers

When Greene King bought Old English Inns last year, changes had to be made. By Mark Stretton.

In the heart of the Cotswolds lies the most lavish of country hotels. The Close, in the market town of Tetbury, comes complete with a 16th century chapel, an award-winning restaurant, four-poster beds and picture postcard grounds.

Hard to believe that this magnificent building, once owned by Richard Branson, was part of the Old English Inns business bought by brewer Greene King for £102.6m last year.

The years of neglect inflicted on the historic inns group and its staff was well publicised. In the 12 months since the deal, Greene King has set about restoring both property and pride. The Close is just one of many returned to former glory.

"The estate was in desperately poor condition," says managed division boss Neil Gillis. "There were some real horror stories. One outlet in Stratford had an assortment of wild mushrooms growing in the dining room."

The test of whether an outlet needed urgent attention soon became known as the "fungi test". Once the Old English deal was signed, Greene King set aside £3m for urgent repairs. "During a site visit to the George at Huntingdon, we noticed how cold it was," Neil says. "We found out that the heating had been broken for 10 months.

"We were fairly new to the hotel game but we thought that you probably needed to supply heating to guests in the middle of November."

For £10,000 the heating was repaired, a sum the company made back through bookings within months. Many of the woes across the Old English estate were the result of a ban on capital expenditure. Any job that was likely to cost over £300 had to be signed off by the chief executive. Each area manager had a budget of £750 a week. With 15 hotels under each manager's belt, that equated to £50 for each hotel a week.

"It was a bit like a Monty Python film," says Neil. "You had smart managers running round doing silly things - they were getting round the ban on cap ex by hiring equipment.

"We came across one hotel that was hiring plates because all the crockery had been broken and the managers had not been allowed to buy replacements. Another was renting televisions for all the bedrooms."

The disorder of the estate meant the Old English Inns brand, and image, carried a lot of baggage. Too many customers had visited a bad one and tarnished the rest with the same brush. As a result keeping staff was difficult.

"The staff were reduced to tears because of the number of complaints," says Neil. "One manager insisted on running the desk himself during check-out time because he refused to subject his staff to the barrage of complaints and abuse."

These are, of course, the worst examples and not all was bad, but many questioned the £102.6m price tag that Greene King shelled out. According to Neil, though, "it's worth considerably more than that.

"There is no other way you could assemble an estate of high quality mid-market coaching inns like this."

Visiting these classic inns, it is not hard to see the attraction. The Close Hotel (pictured)​ is just one of numerous gems in the portfolio of historic town houses which are accompanied by some weird and wonderful stories. The cellars at the Cross Hands at Old Sodbury, which dates back to the 14th century, once housed convicted criminals sentenced to death by "Bloody Judge Jeffrey". The Cross Hands was also where the Queen sought refuge during a snow blizzard in 1981.

The George at Huntingdon once belonged to Oliver Cromwell's grandfather while the Talbot Hotel, in Oundle, Northamptonshire, is said to be haunted by Mary Queen of Scots. The oak staircase and other parts of the building were brought from the ruins of Fotheringay Castle. It was down these steps that she walked to her execution. The Saracen's Head, in Towcester, is featured in Charles Dickens' first novel The Pickwick Papers.

Many more stories are to be found within the estate walls and these nuggets of history will be used to market the inns. The database contains 150,000 previous customers but Greene King is holding back the majority of its marketing activity until renovation is complete.

But the staff at Old English already know a thing or two about marketing, Christmas being a prime example.

"The pub industry tends to treat Christmas as a certified guarantee - you open the doors and people will come," says Neil. "Whereas these guys aggressively market everything. It has taught us a lot about going out and chasing the business."

Neil says Greene King was able to bring its food and beverage expertise to the table - too often the ground floor of an Old English Inn was just a reception and now the sites compete for passing pub trade.

It has thrown the shackles off the food business. "We don't have set menus," says marketing director Adam Collett. "Chefs are empowered to cook what they want - we call it 'enchefment'. We encourage traditional cooking and seasonality so at the moment we're serving a lot of game. Aside from being very good, the dining experience at an Old English Inn should be individual."

The company has also helped managers with commercial disciplines. "We had a lot of people who were great hoteliers but couldn't bring profits in," says operations director Mark McGuigan.

When the deal was done Greene King carved the 136-strong business up with 76 sites going into the managed division, 32 transferred to tenancy and those "beyond redemption", about 26, sold.

Mark, previously head of the town centre "circuit" division, was placed in charge of the 58 managed inns and Penny Parkinson was brought on-board as marketing manager. The poorest houses were given preferential treatment and the company outlined a three-year programme that would see a revamp across the whole estate.

So far £9.25m has refurbished 23 hotels. The 680 refitted rooms now contain hi-fi systems, video and DVD players and modem points for travelling businesspeople, in addition to the mandatory oak beams and log fires. A further £8m will be spent on the remaining 464 rooms in the estate.

"When we bought this business the property portfolio ranged from appalling to good," says Neil. "Now it goes from mediocre to very good.

"These are terrific businesses and the future of the hotel business - would you rather stay in a concrete box or a proper coaching inn with a log fire and a traditional pub downstairs?"

Pictured: the Old English Inns team of (l-r) Adam Collett, Neil Gillis, Penny Parkinson and Mark McGuigan​