The Lowdown: Why fool around with steak when you have hamburgers at home?

Grant Hearn doesn't need to go to luxury hotels. His ambitions, he tells Abigail Townsend, are catered for by Travelodge
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The Independent Online

Running a chain of motorway hotels and roadside cafés can't be most people's dream job. Motels hardly have the prestige of famous, superstar-attracting hotels and caffs will never get in any restaurant guide. But some people aren't fussed about fussy five-star luxury, and among their number is Grant Hearn,the man hired by private equity firm Permira to run its Travelodge and Little Chef chains after buying them from catering giant Compass for £712m earlier this year.

Hearn started his career at the now-defunct Forte group and even spent a year as assistant manager of the legendary George V hotel in Paris. But he claims that what really gets him excited is his latest turn in the budget sector. "I like staying in Travelodges," he insists. "I like my own space and don't like a lot of fuss. I shut the door and I'm in control. My family likes it too."

Hearn sees budget hotels as a growth opportunity and has no problem with Travelodge's cheap and cheerful identity. Instead, he is proud of it. "We consider ourselves a replacement-for-hotel industry. Our guests are coming to us because they're visiting Aunt Betsy or taking the kids to Alton Towers. We're not the reason for the trip, we're the facilitator."

It is partly for this reason, and not snobbery, that Hearn is prising the chain away from its roadside roots. He aims to boost room numbers significantly over the next two years - the group currently has around 240 sites and 1,200 rooms - and much of that will be through new properties in town centres. Some 40 per cent of the portfolio is in these locations, with the remainder roadside, and Hearn eventually wants the ratio switched round.

Likewise, he is planning an expansion into continental Europe, although it will be very targeted. For the moment, the group is focusing on Spain, and will be opening in the suburbs of Madrid in the second quarter of 2004.

Such ambition is rare from a hotel chain in the aftermath of foot-and-mouth, the 11 September attacks, a global economic downturn, war in Iraq and then Sars. No wonder no one feels like going on holiday. Yet the budget sector has emerged relatively unscathed compared to such high-profile luxury collapses as Le Meridien. Which means Hearn is probably justified in his ambitions for Travelodge.

But then Hearn has been ambitious since the age of 13. It was then that he realised that his plan to become a doctor would involve dealing with blood (the realisation dawned on him following an operation to have his appendix removed). At this point, he decided to follow his father and cousin - respectively, Dennis and Alan Hearn -into the hospitality industry. And since both were board members of Forte, he set his standards high.

Managing director Dennis had other plans, however: "My father tried everything to put me off going into the business. I suppose he thought I had just seen the glamorous side."

While attempting to follow orders and be put off hotels, he tried working in the US for a summer and running a mobile disco, before everyone relented and he was packed off to a hotel school in Ireland.

After graduating, he joined Forte at the age of 21 and was to spend the next 14 years with the company, working his way up.

"I figured that because my father was managing director, I would have to work twice as hard as anyone else," he recalls. "My ambition was to lead the company and I thought that the reputation would have to be turned round from potential nepotism to 'here's someone who works very hard'."

He eventually become executive director for London and deputy managing director for Forte Crest. He left for Whitbread six months before Forte's hostile takeover by Granada.

At Whitbread, he was presented with his first opportunity to get involved with a budget chain, and he and the sector obviously clicked: just check out his scowl when asked about room service ("it costs money, which means everyone has to pay, not just the person ordering the sandwich") and what happened the last time he used the sort of freebie toiletries that Travelodge does not supply (he came out in a rash).

Whitbread owns Travel Inn, the biggest off the three UK budget chains - the third is Premier Lodge, recently sold by brewer Scottish & Newcastle to pubs group Spirit - and Hearn is determined to wrestle back Travelodge's old crown. "Travelodge was the original. It was the one that invented it in this country. We let Travel Inn take over our number one position and we're going to take it back with some force. So we don't think about it as going up against old friends." (It was, of course, his alma mater Forte that opened the first Travelodge, in 1985 on the A38.)

What is also attractive to Hearn is that Travelodge is privately owned, unlike his last two companies (after Whitbread, he joined Hilton in 2000 as managing director of its UK and Ireland operations). For a start, he is no longer constrained by putting shareholder needs first. "We don't have that corporate noise. We're totally focused on making Travelodge work and be successful. Most of the time [in public companies] you are told not to say anything, to keep quiet, and that's not in the best interests of your company. In private hands you can get your message across by being refreshingly honest."

Of course, Permira did not spend £712m buying Travelodge just to guarantee discounted room rates for executives, and it will be expecting a return on its investment. The plan is to grow the hotels organically (though an acqui-sition would also do the trick), spin out the 340 Little Chefs and then float the remaining business, which Hearn would run. He concedes other exit opportunities could emerge, but adds: "If flotation is the route we go down, the expectation is that I will be there to take it on."

That should take up to four years, although the right acquisition could speed up the process - in other words, if Spirit decides to sell Premier Lodge. It bought the chain as part of S&N's retail estate and most expect Spirit to sell, though the group has said it has no plans to offload it in the short term. Travelodge and Travel Inn are the two contenders.

Hearn says he talked to Spirit - "as I'm sure they have with other parties" - but is biding his time. "They know we're there waiting when there are ready." He will not overpay, however. A valuation of around £500m has been attached to the Premier Lodge estate, but Hearn believes a fairer price would start with a three.

While that bubbles away, Hearn is getting on with the expansion, taking advantage of the slump in demand for office properties to bulk up the portfolio (offices are, apparently, easier to convert than existing hotels). Likewise, Little Chef is being overhauled, ready for its eventual demerger. The management has been strengthened (a buyout is one option) and the two chains will be separate operations by next spring. On the restaurant floor, changes include taking an unwieldy menu back to basics such as fry-ups and fish and chips, and introducing special offers.

In between all that, Hearn continues to find time for his family, his twin loves of the Harlequins rugby team and Chelsea Football Club, and generally refusing to act his 45 years:

"I have not come to terms with my old age yet," he says, before pointing out that he knows who hip-hop's Big Brovaz are - making him an instant hit with his three teenage kids. His own tastes do not quite extend that far, though they are resolutely young and mainstream: indie rockers Muse; 50 Cent, the US rap sensation; and Black Eyed Peas, who have recently been at the top of the charts. Which is exactly where Hearn hopes to return his chain of mainstream hotels and restaurants.