Interview: Patrick Elsmie, managing director of Gleneagles

Published on Friday 18 March 2011 19:16

THE lounge on the 25th floor of the Mandarin Oriental Hotel in Hong Kong commands a breathtaking view over Victoria harbour and is a major gathering place for the discerning cosmopolitan traveller.

On a recent visit to the Far East, Patrick Elsmie, the tall, suave managing director of Gleneagles, decided to stop for a drink at the Mandarin bar and soon found himself surrounded by a host of former colleagues from his days working abroad in some of the world's most exclusive resorts.

The group swapped industry gossip, notes on who was now working where, but they quickly realised they were all there for one main reason: to persuade the Chinese consumer of luxury holidays - one of the world's fastest growing demographics - that they simply must come to Scotland.

Even though Gleneagles enjoys a high profile in many golf-loving Western nations, Elsmie found that he came up against a few surprising hurdles during his trip to Hong Kong - namely that many Chinese people did not know what Scotland is.

"As always in a new market, the challenge is always going to be that there is no deep understanding of what Scotland really is," he explains.

"Part of that is education. That is why what we do in terms of our international marketing is so important.

"We have got to make sure that once they have understood golf is a great game and they have played it in China, Thailand, Malaysia or Singapore, coming to the home of golf is a good idea."

Unlike Hong Kong and Shanghai, Scotland is not booming. Traditionally at this time of year, Gleneagles would have a busy calendar, filled with corporate events - mainly domestic businesses from Scotland or the wider UK.

In past years,, the Entrepreneurial Exchange annual spring shindig was one such highlight, attracting a buzzing crowd of Scottish high flyers such as Sir Tom Hunter, who would be dropped off at the hotel's porticoed entrance by his chauffeur.

But now, the high fliers are lying low . Even if some firms that were past regulars - in particular Lloyds Banking Group and Royal Bank of Scotland - could afford a corporate jolly at Gleneagles, they certainly can't be seen to be hosting events at five star hotels for fear of provoking the ire of the embittered taxpayer.

Elsmie admits that business did suffer after the outbreak of the financial crisis: "It has been a little more quiet than I would have liked," he says. "There's no doubt that it was a problem, having our two largest financial institutions not using us in quite the same way"

Instead, members of Elsmie's sales team had to dig deep in their contacts books to remind former customers that Gleneagles was still there.

"What we looked at over the last 18 to 24 months is how we can maintain close relationships with those organisations that are either owned by individuals or which are less reliant or affected by the economic situation," explains Elsmie."Those relationships were, wherever possible, deepened to ensure that we could continue to see the small companies use us.

"The truth of the matter is the larger banks and financial institutions will for quite some time find it problematical to be seen using a five star hotel.

"But like all these things, organisations need to do business, they need to entertain. I trust and hope that will eventually result in them returning to us."

But Elsmie is not one to throw in the monogrammed towel when business gets tough. In 2009, profits at the hotel slipped dramatically, even though turnover, at 35.6 million, was down only slightly from 38.2m the year before.

Next month, the hotel will report its figures for the year to June 2010, and Elsmie is remaining tight lipped.

"We are looking now at May, June, July and August. We are seeing a much better position than we have really seen for a couple of years now," he says.

Despite the tough trading environment, Gleneagles has resolutely not slashed prices or offered deals on discount websites such as Groupon.

"Being aggressive on pure pricing is a not a route we are keen to follow," says Elsmie. "In this day and age, cutting prices to fill hotel bedrooms in the short-term is a difficult thing to do for your brand in the longer-term. If your brand is important to you, you make sure you keep a certain level of integrity."

Elsmie insists that drinks giant Diageo, which owns the 87-year-old property, is 100 per cent committed to keeping the luxury resort.

"Gleneagles is a good focus for them (Diageo] in Scotland," he says. "It is a very visible asset for them as a brand. It gives them a good showcase for their products. And it has always been something, whether it is Diageo or any other predecessor organisations who have owned us, that has been iconic and which they have felt glad to own."

As well as looking to better times over the next couple of months, Elsmie is also gearing up for 2014, when the prestigious Ryder Cup, the bi-annual event between the best golfers in the US and Europe, returns to the game's spiritual home.

The finishing touches are now being put on a 2.5m upgrade of the resort's Dormy Clubhouse, one of the last things to be done as part of an 18m refurbishment of the resort's facilities.

Elsmie says there are a few more small operations left to be done on the golf course which will take place this winter. "It is coming around so quickly. It is quite sobering," he says.BACKGROUND

PATRICK Elsmie became managing director of Gleneagles Hotel in 2007, succeeding Peter Lederer, who became its chairman.

He graduated from the hotel course at Oxford Brooks University, then known as Oxford Polytechnic. After graduation in the 1970s, Elsmie worked in Asia for nine years with the Mandarin Oriental Hotels group in Hong Kong and Thailand.

After a year in Antigua, he returned to the UK and spent five years in his first job with Gleneagles. But Lederer was not then ready to relinquish the managing director role so Elsmie went to South Africa to run a golf resort for Orient Express.

Returning to Scotland, he became general manager of the Old Course Hotel in St Andrews, then in 1999 he returned to Gleneagles as operations director and general manager.