Interview with Michelle Luxford, HR director at Travelodge
One of my countless guilty pleasures is a penchant for reading glossy magazines. I love flicking through the interviews with each issue’s celebrity of the moment, where they bemoan, to a wide-eyed journalist, the stresses of their frantic lifestyles, over cocktails and crudités – always in a swish hotel.
Last month, I was that journalist, having morning coffee with an HR director in the foyer of a central London... Travelodge. Who's complaining though? The coffee was roasted to perfection and during our meeting, Michelle Luxford, HR director of Travelodge, was doing anything but complaining about her busy life.
"At the moment, we are opening a new UK hotel every eight days on average," she laughs. "The speed is relentless. And every opening comes with its own event. We usually have an MP or the local mayor in attendance."
Since 2006, Travelodge has doubled in size, from 250 branches to 500 this year. It opened its 500th branch last month in Stratford, with 188 rooms, just in time for the Olympics. This is on top of the 10 other strategically placed new hotels due to commence trading in London this year in areas with accessibility to other Olympic venues: ExCeL, Greenwich, Crystal Palace and Cricklewood (for Wembley). The company has 47 hotels in London alone and employs in the region of 6,000 employees in the UK. Not showing any signs of slowing, it has aggressive growth plans to double in size again by 2020 and have 1,000 UK branches. It grows by acquiring other small chains (the latest being InnKeepers Lodge in 2010), by building its own hotels or by converting offices, closed-down bars, or even houses.
Luxford believes, given Travelodge has been around in its current form for years, while competitors have changed names through mergers and acquisitions, the brand 'Travelodge' has become synonymous with budget hospitality. "People say they are going to stay 'in a Travelodge'," she says. "They might mean another brand, but it is what they will put into an internet search engine and hopefully book.
"It is a sign of the times that consumers have become choosier about where they spend their money and we are showing them good value and good housekeeping, so when the good times come back, people who stayed with us in the downturn will want to stay with us again, continuing to be sensible about their spending choices."
But while on the face of things, Travelodge looks like it is thriving, in Dubai, dark clouds were forming, only days before Luxford spoke to HR magazine.
Travelodge's investor, private equity firm Dubai International Capital, was reported to be facing a £400 million pound loss, due to the hotel chain's debts. New York hedge funds, Avenue Capital and Gold Tree Asset Management, were preparing a £60 million loan to tide Travelodge over until a debt-for-equity swap could be completed, leaving creditors in control of the business.
As HR was going to press, the restructuring was nearing completion. But the news came just days after fashion retailer Peacocks faced administration, following its debts, until it was bought by Edinburgh Woollen Mill.
Luxford is prepared for a line of questioning on the developments. "Trading is great for us," she says. And she's right. Travelodge's most recent financials (from 2011) showed the company experiencing a 16% increase in sales to £370 million and a pre-tax profit of £55 million. Luxford adds: "This is just debt restructuring. It is business as normal for us. We are still growing and we are still on track. It is a change of ownership, yes. But they won't have any control over the running of Travelodge. We went through the same process in 2006 and have doubled in size since then and it is not right to compare the situation to Peacocks.
"I have been answering these questions for staff as well, because I want to be transparent and reassure them. It is, after all, staff who will reassure our customers."
And staff are vital to growth plans: "If a customer visits one of our hotels, they won't remember the number of towels or the colour of the bedspreads," she smiles. "They will remember our staff and the quality of the service."
This explains why HR has become a fundamental strategic driver within Travelodge. Luxford reports directly to CEO Guy Parsons and sits on the executive committee.
"HR can't operate in a vacuum," she says. "We can't just run HR for our people. Commercially speaking, it is vital. The HR function here is not just a department that 'does things'. This business takes HR seriously and it is the business, not me, that is pushing an HR agenda.
"The leadership team talks about 'people' with the same level of importance as 'customer', 'profit' and 'organisational measures'. The organisation couldn't run if this wasn't important. And, although I love a challenge, I couldn't work somewhere where this wasn't the case. Guy [Parsons] genuinely sees the importance of people and it is refreshing that he puts it at the top of his agenda."
So, with growth, come challenges, made perhaps even starker given Luxford's HR team consists of just 18 staff.
She smiles at my expression on hearing this. "That's small, isn't it?" she laughs. "We are very lean here. We don't waste a penny. We work hard, but we work smart. Although I haven't got the resources, I work a lot with line managers and branch managers for advice and support."
The primary strategy for Luxford has been resourcing. Late last year the company launched its first apprenticeship scheme, Jump, designed for 17-18-year-old school-leavers. Travelodge is offering 500 management apprenticeships and, by 2015, 40%-50% of new hotels will be managed by these apprentices. This year, it took on 33 apprentices from 1,000 applications. "We want some of these to be on the board within 15 years. People often fall into a career in hospitality, but we want to change perceptions and show this can be a destination career route," Luxford explains.
"We don't need degrees, we don't need people with skills coming out of their ears. We need the right attitude."
All job applicants and employees have been asked to complete 'mini-psychometric tests' to make sure their attitude is on par with what would be expected at Travelodge. And the company won't hire anyone who doesn't pass.
There is traditionally a high volume of transient staff in hospitality and Luxford has set herself a goal to "reduce the churn". "We can promise our apprentices and our staff a career path," she explains. "We want to develop from within and have a target that 75% of management appointments will be internal. We want to bring people up through the organisation who know the brand and we want about a quarter new people, who can bring fresh energy and ideas."
There is a fast-track management development scheme, whereby anyone, from a cleaner to a receptionist, can apply to attend a 12-week training course, after which they will be given their first management role: running a small road-side hotel or in an assistant manager role in a larger branch. Anyone can apply to take an NVQ course.
Growth brings challenges for infrastructure as well. "We have doubled in size already, so we have doubled the number of hits to our website and we need to be prepared for this. We have doubled our supply chain needs and are more demanding of our suppliers now," says Luxford.
"But we have a brand promise - both to our customers and to staff - and this is the most important thing for us."
Luxford has been with Travelodge for three years. The challenges of hosting the world's tourists over the summer, continuing to profit in a market saturated with budget brands, operating under new ownership with debt-laden accounts and doubling in size in six years, have placed a set of unprecedented hurdles before an HRD who, with a wry smile, admits she has done a lot of downsizing in past jobs.
But in the foyer of a central London hotel, HR's own celebrity of the moment takes a sip of tea and adds: "I am keen on development and human potential and we are opening so many hotels I want those with the enthusiasm and dedication to have a chance to find a career with us.
"There is a reputation hotel work is for transient, low-paid staff, but I want to change that. Hospitality is the fifth-biggest sector of the economy - and growing. There is a huge opportunity for British hospitality."