The future of the Inn Collection Group
It’s a view as good as any in England. From the garden of the Bamburgh Castle Inn, the picturesque harbour of Seahouses below teems with fishing boats and day parties
of tourists.
A few miles north, off the pristine sandy beaches are the Farne Islands, a haven for puffins and seals and Sir DavidAttenborough’s favourite place in England to see wildlife.
Overseeing the scene is Bamburgh Castle itself, the royal seat of the kings of Northumbria, and steeped in the dynastic histories of the Anglo-Saxons and Normans.
It all makes for a stunning backdrop for the pub with rooms, and Sean Donkin, managing director of owner Inn Collection Group is under no illusions as to howfortunate the situation is.
“Just find me a few more sites with two castles and a working harbour, and we’ll be fine!” he jokes over morning coffee.
With Northumberland attracting some three million visitors a year, the scenery, fresh air and peace and quiet have no doubt helped the venue become the “monster” it is today.
Now taking close to £3m a year, its ripening has been a gradual process of improvement during 14 years of ownership.
The flagbearer of the Inn Collection model, the venue’s main focus is on the ground floor, where it has 280 covers , while around a third of its revenue comes from the 46 rooms.
“In terms of profits, it converts exceptionally well to the bottom line,” Donkin says.
“How does it compare to a national chain? I think it’s better than most. I don’t know many pubs that do the numbers we do here, in terms of conversion.”
It’s a venue close to Donkin’s heart as he spent several formative years there as general manager.
While the business has always been busy, the key to its growth has been enhancing the offering by adding tables, improving the kitchen function, and finding efficiencies.
Having established a model that works, Donkin is now set on “big ones” – sites that do at least £1m a year.
Expansion targets
The other top earners in the portfolio include the Hog’s Head Inn in Alnwick, and the Commissioners Quay Inn in Blyth, which do similar numbers to Bamburgh Castle, while Amble Inn in Morpeth is growing nicely in its first year of trading.
The Alchemy Partners-backed group is targeting sites with 165–200 covers and 30–40 bedrooms, with 60–120 car parking spaces in newbuilds.
If these requirements aren’t met, Donkin is always open to expansion potential saying he is never “frightened to take out walls and redevelop.”
Potential sites can be as little as a green field and an idea.
Of course, not every inn can be blessed with a castle, even if Northumberland does have more castles than any other English county. Still, there are plenty of good sites out there “as long as you’re prepared to spend enough”.
With eight sites trading, and several more in the pipeline, the group’s geography ends on the Scottish border in the north, and at around York to the south, a conurbation with potential for multiples sites.
Group founder and executive deputy chairman Keith Liddell filters acquisitions targets, which are then examined by Donkin, and later Alchemy and lender OakNorth.
While there are plenty more opportunities on the east coast, there is strong potential brewing in the Lake District to the west, which has a fairly unexploited middle market.
The area has a fairly similar tourist profile to Northumberland, but nearly seven times as many visitors, at 20m.
“What’s flabbergasting is the standard and quality of what’s on offer,” Donkin says. “You have the five-star, all-singing all-dancing hotels and pubs, which are amazing, but in the middle ground there’s nothing.
“They’re getting away with murder, because of volume. If your place is making a fortune, why would you spend? For me it doesn’t sit right.”
One acquisition is The Waterhead Hotel in Coniston, which has 42 beds, 170 covers, and four acres of land, due to open early next year after refurbishment.
The former Queens Hotel, which has 30 beds and 160 covers, is to be reopened as The Ambleside Inn, and is “going to be a blinder”.
“We think we have two gems there and we’re looking at a lot of others,” he says.
It’s been a five-year process of observing the area, and a big step in terms of investment, but worthwhile: “If a site’s making a million a year, I’ll drive all day for it.”
The middle market offering of Inn Collection is a point worth emphasising, and one Donkin keeps in mind with rigid discipline.
While some operators might be tempted to turn such venues into boutique upmarket destinations, Donkin sees this market as crucial to the group’s success, likening this focus to a train track.
“We purposefully and unashamedly target the three star, C1/C2 market, because that’s our marketplace, and our sales back that up.
“We’re very firm in the approach we have. It’s very easy to allow staff and management to deviate away from it, and that’s when your offer becomes distracted. If we stay on the train tracks, we all go in the same direction, everyone knows which way to go.”
Lining up the cogs
Donkin, a 6ft 4in tweed-wearing former rugby player from Newcastle, has a habit of mixing Geordie straight talking with some profound allegories.
“It’s food, booze and rooms. That’s it. Dead simple,” he says, before unravelling the detail. “Though obviously there’s a lot more going on behind the scenes.”
Not shy of a colourful analogy, he sees the running of pubs as like a wrist watch: “All watches tell the time. But if you take them apart there’s so many moving parts, cogs and intricacies that work together.
“It’s the same as a pub. If you’re not absolutely focused on what you want to achieve, those cogs aren’t going to line up.”
Is that a management concept? “No, it’s a 12-pint principle!”
As operators the group has been described as “sophisticated street fighters” due to their embrace of modern business techniques not always associated with the pub industry.
The team takes annual trips abroad for research and development, most recently to study the brasseries of Paris.
Although they might adopt some established trends, such as premium gin and tonic in goblets, the offering is “traditional and timeless” pub fare, cooked fresh.
“We keep on the train tracks, but we will observe others and if anything stands out, and is replicable, relatively easy to achieve, and of benefit, we’ll have a go. But just because it’s new doesn’t mean it’s brilliant
or usable.”
The statement sites tend to be food led, though there is no illusion of being restaurateurs, with the high-volume operation based on ordering at the bar.
He describes chain restaurant service as “naff and robotic” adding: “If you want service you pay for it. I don’t think you can have good service and value for money.”
Donkin’s own story is worth recounting, if only to illustrate his ‘go the extra mile’ mentality.
Injury ruled out a professional rugby career, which had started in earnest in Spain. Then, much to the dismay of his former doorman father, he quit university and took up glass collecting after being thrilled by the buzz of pubs.
He took a management course with Whitbread, and six weeks in, in his first posting, was sent to Pontefract to relieve the previous licensee, who had been held up at gunpoint in a robbery.
Valuable lessons
Left to his own devices, Donkin could not access the staff lodgings, and ended up sleeping on the kitchen floor for 10 days straight amid broken glass.
“I felt like it was my duty to the company. They had a really good way of making you feel part of a much bigger organisation.
“It was an extreme circumstance that required extreme measures. Nobody was holding a gun to my head like the last guy. There was a choice. People who succeed in life are the ones who tend to do a bit more than the next guy. It’s not about being a hero, it’s about doing it for the right reasons.”
Though a hard lesson, Donkin sees this sense of responsibility as hugely important, a sometimes missing factor in today’s hospitality workforce.
“Would I want my staff to go through what I went through? Yes, I would! The gifting of rules and responsibilities is necessary. As an industry we’re still very young in terms of professionalism. I managed to go from glass collector to where I am now.
“I’d love to see some people with that burning desire and hunger to do it, but with the knowledge that it’s experience that gets you there. It’s not just wanting it, you need to earn and deserve it.”
As a senior manager, Donkin recognises his role in cultivating this sense of duty.
“You can lead a team to great things or terrible things. The legacy you leave behind is what you give to them. In the main, teams stay the same age, they tend to be quite young. It’s the same story being reinvented over and over. You can’t get bored of that story, because it’s yours.”
