Profile: Paul Nisbett, FD of Malmaison & Hotel du Vin

Speaking to the finance director of Malmaison and Hotel du Vin, two of the
UK’s most prestigious hotel brands, over breakfast, you can’t help thinking that
it would be easy to get used to his job. Eggs benedict in a smart hotel before
starting work, anyone?

Paul Nisbett plays it down. ‘It’s a long life and long hours. You are
continuously in and around work. You can try and relax, but people will often
want to talk to you, you don’t switch off from that,’ he says, adding that
during our chat he has been unable to take his eyes off what is going on around
him. Why are they moving that over there? And those over there?’

The bosses do not spend all their time sampling fine wines, he adds, in fact
often steering clear of all alcoholic consumption. ‘There are often meetings of
the executive team at dinner where not a single bottle of wine will be drunk.

‘Everyone thinks it’s glamorous to spend all your life in hotels, but it can
be lonely too. Sometimes you just want to go to your own house, not sit down
with a big meal, and just have some comfort food, maybe watching telly and
having a bottle of wine,’ he says, before catching himself.

‘It’s an infectious environment. You live and breathe it. It’s a great brand
if you’re entertaining. Sometimes you have sommeliers advising you on which wine
they think you will like. It’s not a bad life – let’s not kid ourselves.’

One of the things he says is difficult, and it is a difficulty most would
kill for, is the temptation. ‘You have to be very strict on yourself.’ With
Malmaison boasting a wine list of several hundred different bottles, and Hotel
du Vin one with more than 1,000, you can see what he means.

His description of how the business, and in particular the training, sounds
indulgent. ‘The staff are trained to know what they are selling. All the staff
test the menus four times a year, including those on booking lines.’

‘Sommeliers go off on trips overseas. Those choosing cigars went on a trip to
Cuba to the world cigar conference. Hotel du Vin chefs went on a trip to New
York to eat in four different restaurants to test out new dishes. We train in
partnership with the suppliers.’ That makes up around 3% of the payroll, he

But he has some gripes with the government over the general issue of
training. ‘We get absolutely no support from the government. We have our own
graduate programme,’ a problem he says is not specific to the business, but
industry wide.

In his late thirties, Nisbett is overseeing a huge expansion of the chains.
Set up at almost exactly the same time in 1994, Malmaison bought Hotel du Vin in
2004, becoming part of the same group. Owned by Maylebone Warwick Balfour, the
listed property group, the business secured £105m of new funding from HBOS and
Royal Bank of Scotland to pursue an expansion of the group from 16 to 25 hotels
in July of last year.

There are various differences between the chains. Malmaison is the weekday
brand, with hotels in most major cities where people stay when on business.
Patsy Kensit frequents the Leeds Malmaison while filming TV soap Emmerdale.
Hotel du Vin, by contrast, is the weekend brand, which, with a base in the south
of England as opposed to Malmaison’s northern bias, caters to people travelling
to the cathedral cities and towns in which it is located.

Buying Hotel du Vin, he says ‘gave [Malmaison] a southern portfolio
overnight. It would have taken us five to seven years to build that kind of
property portfolio’.

The most recent financial results show combined turnover at Malmaison and at
Hotel du Vin of just under £60m, with earnings before tax, depreciation and
amortisation of around £10m.

MWB plans to float all the separate parts of its business, including the
luxury hotels, over the next five years. But Nisbett is hopeful the floats could
actually take less time.

‘Realistically, the way we are going, it is closer to being three and a half
years. Four hotels are under construction and we have negotiations with at least
three more sites. It’s looking like the latter part of 2008/09 when we will be
close to having the full complement.’

Five new Hotel du Vins are planned, and Four Malmaisons. It is easier, he
says, to roll out Hotel du Vin to more cities, whereas there are only so many
big metropolises for Malmaison to go to.

‘Malmaison needs to go overseas. It would be very easy to go to tertiary
cities to roll out the brand. But we have to be very strict on that,’ he says.

Dublin is one place where the company would like to establish itself. Another
London site is also on the agenda. There is only one hotel in London, with 97
rooms, in Charterhouse Square, a slightly smaller hotel than the average hotel
in the chains as a whole.

The business faces a number of significant challenges over the coming years.
Clearly, it is largely predicated on property and brand value, but the challenge
the finance director faces, is more on the development issues, he argues.

‘The existing business is very profitable, and as you expand a new part of
the business, it’s easy to lose sight of the 16 businesses/hotels, we’ve already
got, while everyone gets excited about new openings here or there. If one of
these hotels falls offline people start to get cold feet.’

A qualified hotelier and accountant, Nisbett has spent all his working life,
except for 18 months, in the hotel industry. He trained with Forte in its
graduate accounting programme (‘a phenomenal training scheme,’ he says), and has
worked for the Hilton group, Le Meridien and niche brand Red Carnation.

His only spell outside the hotel industry was in the late 1990s, when he
worked in Saudi Arabia for a company building private hospitals, but to hotel
standards of design.

The experience was short-lived, after the oil price dropped, and the Saudi
economy with it. He came back to the UK to work for Le Meridien. The group faced
difficulties, and Nisbett’s last days were memorable for less than pleasant
reason. ‘I spent my last two days handing back the Waldorf and the Grosvenor to

When not immersed in the hotel business he is an avid follower of rugby. He
describes himself as ‘a proud season ticket holder of Bath Rugby Club’. His wife
is from Bath, and there are a total of nine season tickets held by the extended
family. He also goes abroad to see one Heineken cup fixture each season, he

For the immediate future the finance director will be looking to consolidate
the company’s position here in the UK, but he isn’t limiting his horizons.‘In
the next few years I think I’ll be focusing on developing Malmaison. Going down
the IPO route is very exciting for the company. I like the lifestyle brands and
it would be interesting to go into Europe, the Middle East and Americas and
seeing the business develop further.’

If anything, his yen is less for finance than for business in general. ‘I may
move more towards the commercial aspect of things.’ Watch this space.

Grand designs

Malmaison and Hotel du Vin have a list of 150,000 regular customers. They are
referred to officially as ‘fans’ of the group.

‘When you open they want to be in in the first five weeks,’ Nisbett
says.Apart from providing regular revenue (and they are kept loyal by the
group’s careful recording of their preferences regarding newspapers and food for
each time they come), the fans are also a handy high-margin business.

Through emails and virals setting out special offers, the group can fill the
hotels and drum up business cheaply on even the slowest weekends in the year.

The ‘fans’ are attracted by the uniqueness of the hotels themselves, Nisbett
says. ‘The hotels are developed from old sites. One was an old nurse’s
hostel.’In perhaps one of the most striking redevelopments, the Oxford hotel was
an old prison. A listed building, customers actually sleep in the old cells.

Malmaison operates from Edinburgh, Glasgow, Newcastle, Manchester, Leeds,
Birmingham, Oxford, London and Belfast.

Hotel du Vin has seven hotels, in Winchester, Tunbridge Wells, Bristol,
Brighton, Birmingham, Harrogate and Henley. Further openings are planned for
Malmaison in Liverpool and Reading, and for Hotel du Vin in Cambridge and York.

Malmaison started in Edinburgh, while Hotel du Vin started in Winchester.

The revenues are split in the two restaurants in an opposite fashion. Hotel
du Vin’s revenue drivers are split 35% on rooms and 65% on food and drinks.
Malmaison’s are split 65% rooms and 35% food and drinks.

Hotel du Vin, the company says, is ‘a great restaurant with a great hotel
attached,’ and Malmaison ‘a great hotel with a great restaurant attached.’

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