Adelaide-based Majestic Hotels takes pride in being South-Australian owned and operated and is now focusing on growing not its hotels, but its people
Property developer John Culshaw and his family didn’t originally intend to become hoteliers. At the beginning of the 1980s, the Culshaw Group of Companies was solely a developer and investor in residential and commercial property. This side of the business now makes up only 20 per cent. The remaining 80 per cent stands proud as Majestic Hotels – the product of 26 years of growth.
Chief executive officer Eoin Loftus began working for Majestic Hotels as a porter 19 years ago. He explains how its creation was somewhat a happy accident. “The first hotel was constructed as residential apartments and, due to a depressed market in the mid-80s, by chance the company decided to rent them out on a nightly basis and became hoteliers overnight,” Loftus says. The move certainly paid off and the hotel side of the business went on to outgrow the development side – though not without help from the company’s building experience, which went into designing and constructing four of Majestic’s properties.
Majestic now has five hotels: Oasis Apartments in Port Augusta; Old Lion Apartments, Tynte Street Apartments and Minima hotel in North Adelaide; and the stand-out Roof Garden Hotel in Adelaide City. The latter holds Majestic’s sole function facilities – of which Loftus is particularly proud. “Our two function spaces are adjacent to our rooftop garden so they provide great views, as well as great-value pricing options and great attention to detail,” he says. “A lot of hotels stick function rooms in basements but in ours there’s plenty of natural light. To have that sort of outlook, while you’re in a conference – I think it really helps.”
Customers know best
Loftus knows that corporate groups have appreciated Majestic’s function rooms because the Majestic Promoter Index (MPI) has shown it. This is an internal metric through which Majestic measures customer satisfaction. “We regularly survey corporate customers, travel agents and FIT [free independent traveller] guests by randomly issuing questionnaires for their feedback,” Loftus says.
The index is just one avenue through which Majestic gauges customer opinion. Tripadvisor provides another useful barometer and, earlier this year, helped the company earn a Certificate of Excellence. This acknowledges that the company’s hotels consistently receive ratings of four out of five stars or more, in addition to offering features such as free Wi-Fi internet that Loftus says is quite unusual among local accommodation providers in Adelaide.
“We really listen to and value customer feedback and – most importantly – we act on it,” says Loftus. “There are many examples across our group, Wi-Fi being one, and we’ve made many capital investments as a direct result of customer feedback.”
If its accreditations are anything to go by, this strategy has worked wonders. Since mid-2011 Majestic has been accredited by T-Qual, a quality endorsement awarded by the Australian Tourism Accreditation program.
T-Qual serves not only to give guests peace of mind, but also to extend Majestic’s national and international reach through the associated $5.5 million promotional program.
Good to great
Positive ratings and quality accreditations indicate that Majestic is a great business. But the company believes it can still do better and that’s where the Good to Great program comes in. This in-house “development and alignment program” for supervisors, managers and executives is based on the principle of a best-selling book of the same name written by Jim Collins.
“The program identifies that we are good but not yet great and creates a common goal for all our employees to adopt the principles of the book, to help us become a great and sustainable business,” explains Loftus.
“Prior to having the program, we hadn’t analysed our business from afar and, because we kept expanding, we thought we’d already achieved greatness. But when we looked internally at all the metrics we realised there was room for improvement – things we could deliver better for our staff and customers – and that developed into the new vision and values we developed around 15 months ago.”
Good to Great is taught at quarterly sessions where Majestic Hotels staff present on different chapters of the book, focusing on what’s relevant to the challenges the company currently faces. It has now been running for a year and Loftus says it’s made a huge difference. “We all agree that, a year into the journey, we are further towards achieving greatness as a business – it shows in our MPI and staff retention scores, which are in line with our vision and values,” he says.
Reducing its footprint
Like its staff training program, Majestic’s green initiatives show the company does nothing by halves. “We’ve got energy efficient lighting in all properties and water restrictors in all shower heads,” Loftus begins.
“Recently we upgraded all the air-conditioning units and televisions in our properties to more efficient models. We made the critical decision to not operate our own laundry at our Adelaide sites, leaving it instead to a more-efficient, lower-carbon-emitting service provider, SA Linen Service. So many hotels run their own linen service, but none achieve the efficiency and critical scale necessary for reducing their carbon footprints as we have.”
Majestic used to transport linen 300km from its Port Augusta property to Adelaide for laundering, so building a laundry at Port Augusta has reduced transport-related carbon emissions. To the same end, it has reviewed the contents of its mini bars to ensure that more than 50 per cent of products are locally sourced. Majestic is committed to recycling and donates items such as pillows and blankets to charities such as Ruf Us and Goodwill.
“There’s a lot more we’d like to do and we’re trying to get a new initiative out every three months,” Loftus says. “We’ve been doing this for around 20 months and we’re certainly on track.”
Majestic hasn’t ventured outside South Australia in its 26 years of business, and that’s not changing any time soon. Loftus says the company is “passionate about the state” and this shows in the support it gives to local associations, charities and other causes.
For two years it’s had a partnership with the South Australian National Football League (SANFL), for which it provides discounted rates and hosts group bookings when officials or teams need somewhere to stay in Adelaide. “It’s a family-friendly link to our customers and also an alignment with our vision and values – as well as a link to the critical FIT market,” says Loftus.
The company supports a number of charities but its deepest involvement is in the Starlight Children’s Foundation, which supports seriously ill children and their families. In addition to having donated $1 from every overnight hotel stay secured in its past winter and summer campaigns, Majestic raised around $30,000 towards creating a Starlight Express room – where hospitalised children can play and temporarily forget about their illnesses – in Adelaide Women’s and Children’s Hospital.
“My daughter goes through the hospital around every six months for tests, so it warms my heart to feel that we’ve played a part in creating this room for kids to escape to,” adds Loftus – who has run a 50km ultra marathon to raise money for the charity.
Majestic has put a lot into supporting South Australia, including working as a member of Advantage SA to promote the state. But equally Loftus believes that supporting the state has benefitted the company. “I feel that being closely attuned with our businesses gives us a competitive advantage over our competitors, who are largely global hotel chains,” he says. “We’re able to make decisions closer to the customer and I feel that if we expanded interstate or overseas, our ability to deliver on that advantage would be reduced.”
The company may not have expanded far outwards but it has certainly grown upwards. Its annual turnover is near $20 million – more than 12 times the revenue it had 15 years ago. Majestic’s workforce has grown from 22, when it owned only one hotel, to 125. “We’ve come a long way and the thing that thrills us most is not so much the turnover as the opportunities we’ve provided – the extra 100 jobs we’ve created by opening more hotels,” says Loftus.
“In the past our expansions brought us success, but now we’re all about being great at what we do and achieving the most we can with what we have,” he adds. Focused on the present before the future, Majestic Hotels appears committed to continual improvement. Loftus believes that good things come to those who wait.
“We know we’ll have become a great company when we’re the employer of choice for our great staff and the hotels of choice for our highly valued customers,” he says. “From this will come further opportunities – that we’ll be much better placed to capitalise on in the future.”