Interviews  >  Robert Parker: Room for improvement

As Chairman of the Hotel de France Group, Robert Parker has witnessed first hand the many changes that have affected the tourism and hospitality industry in the Channel Islands. He spoke to Nick Kirby about the difficult economic landscape and the role government has to play in revitalising the industry.

Every sector in the Channel Islands, from finance and agriculture to retail and tourism, has its stalwarts – those people who are not only instantly identifiable with a given industry, but are also among its staunchest supporters. When it comes to tourism and hospitality, Robert Parker is undeniably one of those names.

Having started his career in the finance industry as an articled clerk with Coopers & Lybrand in Bristol in the 1970s, Robert joined what was then Gulf+Western as an Internal Auditor. He then moved within the company to join Paramount Pictures where, as a qualified chartered accountant, he progressed to Manager of International Financial Control based in London. He returned to Jersey in 1980 to start work in the family-owned Hotel de France as Finance Director, progressing to General Manager then Managing Director before assuming his current role as Chairman in 1995. In his time he has overseen major developments, including the 160-bedroom east wing block, the Ayush Spa, and most recently, the Lido Medical Centre.

A well-respected figure in the industry, Robert has been Treasurer and a Senior Vice President of the Jersey Hotel and Guest House Association, stepping down to become the founding Chairman of the Jersey Conference Bureau. He's been a member of the Jersey Tourism Board and the Airport Advisory Committee, and served on the Board of Jersey Hospitality. He is currently on the Tourism Marketing Panel and is Treasurer of the Jersey Conference Bureau.

As one of the industry's most outspoken advocates, Robert recently sat down with businesslife.co to discuss the current state of tourism and hospitality in the Channel Islands, the challenges it faces and why government needs to rethink its strategy if the industry is to move forward.

You've been working in the tourist industry in Jersey for many years now: what's your view on the health of tourism in the island and across the Channel Islands as a whole?

There's no escaping the fact that times have been difficult in recent years for both islands, but I would say Jersey has had it tougher than Guernsey. There were several things that all happened around the same time that have created problems: Jersey had a massive increase in the four-star market just before the recession hit; there was a significant reduction in the tourism marketing budget; and GST [goods and services tax] was introduced, which didn't happen in Guernsey. These factors had a big effect on the profitability of the accommodation sector. We've ended up with greater supply than demand, so prices dropped right down and yields aren't being made. And obviously we're having to pay out more because of GST – when that came in it was suggested that we could pass it on, but that just isn't feasible, and as a result narrow margins become even smaller. It's made a tough sector even tougher, to be honest.

You've been publicly critical of the States regarding tourism and GST: why is that?

Presentations were made to the government when I was in the Jersey Hospitality Association, and I think it's fair to say they fell on stony ground. When GST was first introduced, it was delayed as far as the accommodation sector was concerned, but it's now in at full rate. On the other side of the coin, when zero-10 was introduced, the finance industry negotiated with government, who worked with them to ensure the industry stayed as competitive as possible. They introduced ISEs [International Service Entities] which effectively zero-rated all charges and all inputs, yet they haven't given us the same consideration. Plus if I look at my own property, we are actually paying more – collecting more on behalf of government in GST – than we ever were when we were on 20 per cent. So the long-term sustainability of the sector in the island is severely affected.

How has the current climate affected your business specifically?

We've had to adapt it considerably. Take the conference market: stats for the last 10 years show conferences of more than 100 people have reduced by around 70 per cent. Against that, the number of smaller conferences has increased considerably – a trend I see continuing. The Hotel de France is a large building that is very clearly aimed at hosting large conferences, so we are less attractive to smaller events. While we will still be very active in smaller conferences, our business model is changing.

After we had the fire [in 2002], we built a world-class spa, the Ayush spa, and we believe wellbeing is going to become increasingly important going forward. A more ‘boutique' approach coupled with this wellbeing facility gives us a USP, which means we have an opportunity in a niche market to up the yields and to operate the business more effectively. Plus there will be a much more consistent demand throughout the year, as the spa is not seasonal.

Of course, you also have some other significant plans in the pipeline…

It's no secret we've submitted plans to develop a large part of the hotel, and permission was granted in October last year. Those plans show 51 apartments with some office space in front, which will be for the use of the people in those apartments. By developing apartments, we'll have a resident population on site during the year who will use the spa and the medical centre in front. People visiting the apartments' residents may well also use the hotel.

Is there a sense that hospitality and tourism are in a ‘holding pattern' with no clear idea of where they are going?

Yes, I think so. Firstly, the recession has clearly affected our main market, which was the over 55s/over 60s who were semi-retired or retired. They are not spending as freely as they were previously. Then factor in supply and demand, competition and narrow margins, and you have a number of people looking at it and saying: “I'm in this position and there is no way out of it at the moment – I'm waiting for things to change.” People are paddling like mad just to keep their heads above water, and to be able to think about where to go now, to create a strategy, is very difficult in that position.

I'm very fortunate because of the size of our business and its diversity. With the medical centre and the spa, the size of the property that we have gives us much more flexibility. And because I'm not involved in the day-to-day running of the business, I can stand back and really concentrate on the strategy.

Do you think some kind of government assistance is required in order to kick start the tourist industry?

Yes I do. Tourism is still a very substantial business in the island – there are hundreds of millions of pounds invested in it in property alone, and to create a business like that from scratch is incredibly difficult. It has a superb history and there's a lot of expertise here, but before the government can even begin to help put some kind of plan in place, they need to understand the issues facing the industry so they can talk more sensibly and openly with us to try and achieve meaningful results.

When you are in a meeting talking about GST and you find yourself being told that you can pass that charge on to your customer, it's no surprise you end up wondering “are these guys living in the real world?” You can't help but feel they really don't care, that we're a peripheral industry, and while it's embarrassing if we decline, actually putting in real effort doesn't seem all that important. There's a real lack of confidence in government.

There has been much talk of diversifying the economy: would this have an indirect uplift on hospitality?

I think so, yes. Take the idea of a university in Jersey, one only has to look at the situation in London with foreign students – the amount of spend on an annualised basis is very considerable. It's a very good way of marketing the island to certain emerging markets. The island is safe, so it's a perfect fit from that aspect, and anything to do with education needs accommodation. Yet students don't need accommodation for most of June, July and August, which ties in with tourism's high season and allows a much better utilisation of guest houses and small hotels.

What about other areas, such as digital industries and cleantech? The recently launched Innovation Fund intends to boost certain business sectors, although it was reduced to £5 million from the planned £10 million.

To be honest, the Innovation Fund is rather like me starting up a new shop and someone giving me a fiver. It sounds very impressive to the uninitiated, but from a business perspective – and taking into account the multi-billion-pound economy that Jersey is – those sums in terms of diversification are basically laughable. It's ticking the boxes, and gives a degree of spin with all the right intentions, but if you want to get ahead of the curve you need the right level of investment, and you're not going to do that with £5 million. But clearly, the more business we can attract to the island, the larger the likely knock-on effect into tourism, and that would be a good thing.

If there's one thing that could be done for tourism and hospitality to improve everybody's situation, what is it?

I'll give you two. The creation of a Shadow Board for tourism is currently being discussed and I believe is going to be in front of the States soon. If it gets the right people involved it will mean tourism is taken more seriously, and future strategies will have more commitment behind them. The problem at the moment is we have a lot of good people down at Jersey Tourism working very hard, but I don't feel there is any champion for some of the big issues affecting the industry.

The second thing is GST. Rather like the ISEs within the finance industry, it should be recognised that tourism is an export industry and should be taxed accordingly.

This is an incredible industry to be in, and one that could mean so much more to the islands. It's almost criminal that it is being allowed to go to waste in the way it is.

Add a Comment