The gridlock above London town.

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Hotel in administration, what now for suppliers ?

I am a supplier to hotel’s so this article is largely based on the hospitality sector, but most of the points can be applied to any business.

Before I get into the ‘action plan’ for dealing with hotels or companies that have gone into administration, you need to know a little about the administration process.

Many people panic when they are doing business with a company and they hear that it has gone into administration, administration is very different to bankruptcy.  Bankruptcy is when a company has no possible way of survival and everything is lost.  Administration is a process of survival.

A company can be placed into administration by one of more companies that it owe’s money to.  Typically in the hotel business, the two main culprits who place hotels into administration are banks (who are owed a large amount of money in a mortgage or overdraft) and the Inland Revenue who are maybe owed a large amount of cash in VAT or PAYE payments.  A company may also place itself into administration if it thinks things have gone to far.

The company responsible for placing a company into administration, then appoints an Administrator.

The administer is a company specialist in this sort of thing, they act on behalf of the company owners, the people the company owes money to and the general running of the day to day business.

With hotels it is usually normal practice for the administrator to appoint a ‘hotel management company’ to do the day to day stuff which lets them concentrate on the future of the business.  The original owner of the business’s involvement mainly depends on the how the administrator feels about how they have ran the business up to the point it went into administration.  It is common enough for the administrators to pay the owner a salary to stay involved in the interim, in some cases the owner will not be allowed on the premises for any reason.

The company will not stay in administration for-ever but the time can vary from one month to 3 years (or more) dependent on the debt levels, current turnover and future plans.

There are a number of potential outcomes to administration.

1.  Complete bankruptcy, the company has no future and is wound down.

2.  Break up, in the case of a hotel, the property and land might be sold in chunks to developers.  The fixtures and fittings sold at auction etc, this is common if the month to month business is simply un-viable moving forward.  In hotel chains, it is common for the individual hotels to be sold off or the group to be split into smaller groups.

3.  The company is sold to another company, this is generally the quickest way out of administrator where another company see’s a bargain and grabs the hotel for a cut down price.

4. The hotel can work it’s way out of administration and return to the original owners, this is also not un-common and a situation were the administrators gets the company running correctly again, cutting all dead weight, re-structuring the debt and sailing on.

5. Management buy-out.  Not as common in today’s market but in times when credit is more freely available, management who were not previously owners can club together with the help of investors and banks to buy back the company.

So what do you do, if you supply a company that goes into administration.

The ‘Action Plan’

1. Firstly, you need to get to know your industry.  Thankfully, I am well connected in the hotel industry so I hear about these things (in most case’s) before they go public, this means conversations can take place ahead of the news.  Have you ever tried calling a business the day bad news is broken?  It’s not a good idea.

2. You need to know the law and your rights as a supplier.  You have a contract with BIG HOTEL LTD and on 21st May 2011, BIG HOTEL LTD goes into Administration,  You are owed every single penny up until 21st May, thats not to say you will get paid that money but you are owed it.

3. You need to cut the credit to BIG HOTEL LTD, if you continue to supply credit to this company there is a good chance you won’t get paid because that company on paper does not trade anymore

4. Speak to the management, the administrators, your contacts, the doorman, the bank, the neighbours dogs, whoever you like.  The point of this conversation is three fold, firstly that you are happy to continue to supply them, secondly to agree new terms (ie, reduced credit, a DD mandate, payment up front, whatever you are comfortable with) and thirdly to GET THE NEW COMPANY DETAILS.

The new company details will generally be BIG HOTEL (IN ADMINISTRATION) LTD with the same company registration number and all of your documents, invoices and agreements need to reflect this.

5. Set up a new agreement but be careful who sign’s it, it can be signed by the following people

a) BIG HOTEL (IN ADMINISTRATION) LTD, co-signed by the administrators

b) The administrators themselves

c) The new management company, appointed by the administrators.

6.  You need to treat the debt owed to you by BIG HOTEL (IN ADMINISTRATION) LTD and BIG HOTEL LTD as two separate things, if you are like me, you will probably be well down the pecking order for getting paid but you might agree to settle the balance for less.  The Government and the Banks will always get their money first, thats just the way it is.

7.  Chill out, follow the process and be happy.  It is in everyone’s best interest for the company to survive, do your part to make it happen!

Russell


Mapping complimentary vs paid Wi-Fi across the worlds hotel brands

From Hotel Chatter’s 2011 Wi-Fi report


Oh no, Apple are tracking my location

An article running in nearly all the British media outlets today reveals that Apple has been storing location data of iPhones and iPads customers.

How it took two British security ‘experts’ is totally beyond me, one of the iPhones key features in the ability to attach your location to many of the phones services, twitter, email and the facebook are a few. Photos can be ranked by location and the handy thing about google maps is it ability to guide you to your location based on where you are right now.

Of course, the ability to track a devise this is nothing new, Apple have just created some magical way if tracking people’s location, they just made the technology similar for the average person to use. Mobile Phone networks have been able to track user locations since the dawn of the mobile phone through the slightly complex yet simple method of triangulation, a measurement of the distance the devise sits between 3 masts giving a nearly pin-point accuracy.

The benefits for missing persons and for fighting terrorism far out way the nay sayers and privacy campaigners weak arguments.

It’s quite simple, if your a drug dealer, terrorist or having an affair and you don’t want to be found out – bin your phone (sorry if this inconveniences your life). If your a normal person with nothing to hide then stop crying, no one is that interested in your life location anyway.


Big Brother and the product placement dream.

Now I have no interest what so ever in Big Brother as a show, a concept or a viewing pleasure……. actually I do, it’s like watching a car crash live on TV, it’s amateur sociology ………… for dummies, TV Gold!

Channel 4 last year lost the franchise for Big Brother, or rather they binned it after ratings dropped to an all time low of just 7.4% of TV viewing but it’s far from dead, it was thought for a while in media circles that perhaps a digital channel would pick it up, a channel that could only dream of 7.4% of TV viewings and with no one putting their names in the hat, Richard Desmond wanted it for the newly bought jewel in his crown….. Channel 5, a channel always dubbed with being the poor relation.

So what can he do that is different?  Well apart from giving the show a much needed shake up and face lift what Richard can do is offer companies a cross platform sponsorship deal across not only Channel 5 but his over media outlets as well, such as his news papers and the elusive OK! magazine.

The other thing Richard has on his side is the secret P’s, hailed as the savor of ad revenue in the states……. Product Placement, now legal in the UK companies can pay to have the contestants were their clothes, sit of their couch and drink their coffee, in true truman show ‘everything on the show is for sale’

Richard has set the sales team of Channel 5 and his media companies a tough target, a target of £25million in series one of the new show, a target which will add more that 10% of Channel 5’s revenue and in this market, that’s not to shabby.

I can’t wait!  Now, how much will Davina cost?


A fantastic resignation letter…… and CV all in one.

Below is an email sent from Michael Charlton CEO of Think London to anyone who has ever had any dealing with Think London, it’s a fantastic way to say farewell and dare I say it…… a great pitch for finding a new job, I’m sure he will be getting calls soon.   It’s a shame his domain is just a holding page.

Dear Russell

You may know that from 1st April 2011 Think London is combining with two other agencies (Visit & Study London) to form a new single promotional agency for London called London & Partners. I have taken the decision not to transfer across to the new agency and will leave Think London on 31st March 2011. It has been an absolute honour and a truly fantastic experience to have worked at and then as CEO, run Think London over the last 10 years. I am extremely proud of our achievements and the legacy we leave behind for London. For nearly two decades Think London has played a critical role in ensuring that London has maintained its position as Europe’s leading destination for FDI. Since 1994 we have assisted nearly 2,000 overseas businesses – large and small – from every business sector and from more than 40 countries around the globe to set up and expand in London. Collectively these companies have created over 40,000 jobs – adding £4.6 billion to the London economy.

In 1994 we began as pioneers – breaking new ground for London – fast forward to the present day, we are fully fledged professionals recognized by the World Bank as one of the best global agencies.

It’s been an amazing journey for me personally, and one which I have been privileged to be part of. From the highs and lows of the dot com bubble and burst, to meeting numerous Heads of State.  From banging the drum for London around the globe with Ministers, Mayor’s and Lord Mayor’s, to attending three Olympic Games. From hosting the first event in the New York Stock Exchange after its re-opening following the tragedy of 9/11 to our work in China to promote London as a destination for Chinese companies going global.

It’s been a ball and the memories will remain with me forever. Clearly what we have achieved could not have been done without the dedication, enthusiasm, creativity and commitment of my amazing team, the tireless and passionate support of the Think London board and all our partners both in the private and public sectors. Thank you all from the bottom of my heart. And finally to all our clients who have taken the plunge and invested or re-invested in this great city.

Thank you all for your support, commitment and friendship over the years.

I hope to stay in touch with as many of you as possible. My new contact details are as follows :

mgc@michaelcharlton.com

Or stay connected with me via LinkedIn

http://www.linkedin.com/profile/view?id=2990205

Wishing you all the very best for the future and hoping our paths will cross again.

Best Wishes

Michael

Michael Charlton
mgc@michaelcharlton.com

 


Can I get a freaking coffee please?

Last night myself and some buddies had the pleasure of attending the Irish Blog Awards in the Europa Hotel, Belfast (great night, enough about that though).

Once the event and eating were over, we decided to head to a pub, then it became apparent that all 4 of us were driving, so no point in heading to a pub on a Saturday night . Let’s get a coffee I thought! The words ‘Great idea’ resounded and we headed to the hip and happening ‘Lisburn Road’ for a coffee because after all, it was only 10.30pm.

First stop, Starbucks by the uni. Shut

Next stop, Arizona (made famous as a place to hang out in the evening and drink coffee), they were open but it was for take out only……… Despite the people sitting down behind us.

On to Morelli”s then. Again, they were open and seemed at first to want us to sit down and enjoy their establishment but then as it turned out, we were only allowed to sit down whilst we waited for our take out coffee. Thanks!

Everywhere else was shut…………… So we went to McDonalds, had some coffee, chatted then went home. Mission complete.

Now you can slag McDonalds all you want but they seem to know how to run a business better than the artisan places we give so much kudos too, incidentally, OpenCoffeeLisburn is only held at McDonalds because it is the only place in Lisburn open at 7am.

Why is McDonalds the only place open? Belfast is supposed to be a bustling European city not a ghost town at 11pm…… Unless you want alcohol that is.

Belfast : City of the future, if you are of retirement age that is.