People, says Maurice Taylor, used to call him a “wimp” because he did not jump onto the debt-fuelled bandwagon that led up to the banking crisis. But he never cared when they did, writes Erikka Askeland.
The hotel operator and manager, and the chief executive of Chardon Management, has been in the business too long and now he is having the last laugh. While other hotel groups are struggling, Chardon is entering a significant expansion phase.
As a manager of hotels for InterContinental Group (IHG) – which owns the Holiday Inn chain of hotels – and Hilton, Chardon is planning to add hundreds of more rooms to its portfolio. The company is in talks to take over the management of a 300-bed Doubletree by Hilton hotel in Canary Wharf, and an IHG Indigo Hotel in Brighton.
Chardon has also received planning permission to build a further 125-bedroom, £12 million Holiday Inn Express next to Edinburgh Airport. The 100-bedroom Quality Hotel beside it, which Chardon manages, will become a Holiday Inn.
Then, there are plans for another 150-bed hotel in Stirling, which will be host to a top-end restaurant to be run by an as-yet unnamed high-profile chef.
“It’s not Gordon Ramsay,” growls Taylor. “I don’t like him.”
In case this wasn’t enough, the 73-year old is also in talks to expand his empire into Romania – he confirms that Chardon’s managing director, Robert Crook, was recently there to discuss taking over the management of three Hiltons. Taylor adds he would love to open another hotel in Edinburgh, where he got his start fixing up and running his first hotel, the Albany, which he has since sold.
Of the 36 hotels run by Chardon, Taylor owns half of them, either outright or with co-investors. Some of these backers, he says, are set to be very happy with him. Next year, the Chardon Growth Fund will mature after seven years. The £32m fund proposition had been initially backed with a £9m-to-£10m loan by the Allied Irish Bank before the bank failed. Initially, the fund was designed to build four Holiday Express hotels – but once Allied Irish started getting into trouble the fund only managed to build two – albeit the two properties, one based on Edinburgh’s Cowgate and another in Dunfermline, have traded very successfully.
“Through this period, they [the investors in the fund] are going to come out significantly up. Our shareholders should be ecstatic,” says Taylor.
He started out in his first business in January 1973 with £5,000 – the money he got from the sale of a flat in Glasgow.
In 1995, he built his first Holiday Inn, which featured the French restaurant La Bonne Auberge – inspired by his stint working for Tour d’Argent hotel in Paris and opened on Bastille Day. From then, he built up a group of four hotels – two in Glasgow, one in Perth and a hotel at Edinburgh Airport. Now the company has a staff of 2,500.
But his rise to the top of the hotel trade has not been straightforward. In a career that has seen him buy an engineering business then pining to give it all up to go scuba diving in Hawaii, his faith was sorely tested in the 1980s, when he was nearly crushed by interest rate spikes.
“I took a PhD in gearing in 1982,” he says of loans that were variable with interest rates. When the base rate shot up to 18 per cent, he said, he had to “hang in tooth-and-nail”.
“I had 365 sleepless nights,” he recalls. But as a result, he decided never to take on too much debt – which earned him the scorn of some who thought he was a wimp. And while he eschewed taking loans from the likes of Peter Cummings, the former head of HBOS Corporate who is often blamed for breaking the bank, he says they are good friends.
“I actually feel quite sorry for the guy. The banks have behaved abominably, but Peter Cummings has been made a scapegoat and I don’t think that is right.
“I meet him from time to time for a coffee – he’s got a ton of experience. He can assess things quicker than I can. I’m fundamentally a hotel keeper.”
The problem facing the hotel sector is that the “banks are constipated”, says Taylor. “The market for sales has dried up. Most of what makes the market is distressed – it is not a good indicator of the health of the industry,” he adds.
The collapse of the owner of Malmaison Hotel and Hotel du Vin – MWB – he says was a “tragedy”. The hotels group, which still continues to trade, is essentially now owned by its bankers – Lloyds Banking Group, Royal Bank of Scotland and some equity investors managed by RBS. The hotel group’s chief executive, Gary Davis, insists the hotels are not up for sale. But, even if they were, Taylor says he would not be interested in buying.
“I’m shocked they have got themselves into such difficulties,” he says.
“The reason why Malmaison and Hotel du Vin are less attractive now is because they sold the property,” he says – Malmaison last year raised a £100m sale-and-leaseback deal on five of its hotels. However, it hasn’t all been about expansion for Chardon. Taylor admits that the recession has hit sales, which are down by 2.5 per cent – but less than, say, Marks & Spencer, he notes.
The company has also pulled out of the Holiday Inn in East Kilbride, one of four hotels it managed in a joint venture with Starwood Capital. The hotel there is host to one of his three beloved Bonne Auberge restaurants, which will be rebranded under its new management. Chardon’s joint venture with Starwood, which included a portfolio of seven Holiday Inn hotels, is nearing the completion of a sale, with two properties in the Peak district and Corby yet to be sold.
Although Taylor still remains hands on, much of the day-to-day operation is now handled by Crook.
Taylor’s daughter, Nicola, joined the business ten years ago as marketing director. Is she going to take over the business if or when he retires?
“She can handle herself,” he says admiringly. “My ambition for Nicola is for her to become the asset manager for the family portfolio. I want my daughter to have a more balanced life.”
60 Second CV
Born: Barrhead, Renfrewshire.
Education: St Aloysius School, Fort Augustus Abbey School, Strathclyde University.
First job: At ten years of age, delivering fish.
Ambition while at school: Marine engineer.
Kindle or book? Book.
Music: Orchestral, opera, country and western, pop.
Can’t live without: Mrs Taylor.
Claim to fame: Created La Bonne Auberge.
Favourite places: Paris/Maldives.
What makes you angry: Lies.
Best thing about your job: People.