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10 minutes with... Russell Cool

Business

In the latest of our interview series with local business leaders, we talk to the new Stamford Hotels Adelaide area general manager Russell Cool about tourism, the local economy, and the challenge posed by Adelaide’s small bar trend.

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Lee Nicholson: You’re joining us from the Asian hotel and tourism market, what difference do you see between it and Adelaide and South Australia?

Russell Cool: You’ve got to stay connected here in Adelaide. People do business with people, whereas  in places like Shanghai, Bangkok or Hong Kong, people do business with brand names. It’s very different. You’ve got to keep that connection up in Adelaide.

I’ve spent the last six-and-a-bit years over in Asia, namely Shanghai, Hong Kong, Beijing, back to Hong Kong, before coming to Adelaide. From a tourism standpoint … when I woke up here I opened my blinds and saw the beach and just went ‘wow, this is where I want to be’.

I come from big markets. Shanghai has 25 million people and Beijing 30 million, Hong Kong has countless people everywhere and they’re all huge, huge markets. Shanghai has four and half thousand hotels in it. Beijing similar. Hong Kong has the highest density population anywhere on the planet. Those markets have huge drawcards.

Adelaide being somewhat of a secondary city in relation to tourism … when you’re competing with the likes of Melbourne and Sydney, north Queensland, they’re all primary tourism destinations. Very different, but Adelaide obviously has the Barossa Valley, the wine, McLaren Vale, Kangaroo Island, and I’ve just experienced Mad March for the first time. That was great to see the city buzzing in every corner. That’s where I see the difference in the markets.

Before I went to Asia I was in the Melbourne market and Melbourne is just one special event after the next, whether it be grand prix or tennis or cricket or AFL season, which we do as well, but not nearly [as well] to the extent as Melbourne does.

So a pretty big differences when you’re comparing them side by side.

 

LN: You are keeping a close eye on other Adelaide business sectors, how do they influence the Adelaide tourism and hotel market?

RC: We’re in the hotel game but we’re not going after hotel business. We’re going after corporate business to come into our hotels so its important I keep track of the companies we go after and what they’re doing.

We just signed a major corporate late last year, Arrium, but they’re in trouble. It was good to hear that they are going to invest in upgrading all the rail networks, all the steel, so that gets Arrium [through]. I don’t lose a major corporate.

Santos is the same. A lot of them are the same.

I met with another company this morning and three years ago they had 3000 room nights in the city and we were the sole provider. Today, well, to the end of the year they have 1500. They are half down what they were three years ago.

I’ve got to pay attention because if you’re company A and if you’re not giving me the nights you said you were, I banked on you giving me those room nights, I’ve got to find other business.

It’s important I keep a track on what’s going on.

LN: How does the hotel feel that change?

RC: We feel it. Part of that change is major corporate accounts. That’s when it starts to affect me. By the same token we want people in the restaurant and the bars to come after work and have a drink.

If they’re not there they’re going to a restaurant and a bar three or four kilometres away.

That’s when it starts to affect me.

LN: Do you have a relationship or any engagement with the State Government?

RC: We work closely with SATC [South Australian Tourism Commission] and Events SA. You’ve got to stay connected.

Certainly that’s what I love in Adelaide or South Australia you have access to these people. In Melbourne or Sydney I don’t think a local hotelier like me would get anywhere near these people without a real good reason or invite. Here I can actually ring them. That’s where Adelaide has it over everybody else in terms of tourism market and access to people.

We know we need to progress and we need to do well so they’re quite open to assisting each other and working together.

That, in itself, is a benefit and something the eastern states don’t have.

LN: Adelaide has been known as a manufacturing city.Premier Jay Weatherill did highlight tourism as a sector to help save South Australia.

RC: It’s all well and good to say it but they’ve got to put the money in. You’re talking about the Adelaide Convention Centre, you’re talking big funding.

It’s all well and good to say yes tourism is going to support the closures, and the Holdens and the components but they’ve got to get the funding.  They say it’s five million over five years, that’s great, fantastic, but Sydney get about $35 million over one year.

At the same token we’ve got the highest unemployment in the country – it’s pleasing to see it went down. But you have high unemployment and you have high taxation revenue.

I get the economics of it – it’s one thing to say, it’s another to support it through funding, to drive that initiative.

If they can find that balance, international routes into Adelaide that will have flow on effects. But that is going to take some years.

Adelaide doesn’t get the best of raps but once people start to see it, Adelaide converts.

LN: What role does the Stamford play in regard to Adelaide tourism?

RC: We are a very key player. All hoteliers are key players because you can’t have tourism without somewhere to stay.

We’re the largest hotel operator in the city. We employ the most staff from a hotel standpoint so we play a big part in promotion and driving people to the region.

LN: There a number of five-star hotels, including Stamford, in Adelaide. Does Adelaide have the right hotel balance?

RC: I think competition is good. There is probably an oversupply at the moment. You look at the markets like Melbourne and they’re running 86-87 per cent of the year.

Of the market, we’re probably in that mid-70s range, so that means there’s 25 per cent capacity not taken, probably a bit high but by the same token the expansion of the convention centre everything they’re doing out here Adelaide Oval, plans for Glenelg jetty. They all need places to stay.

It compresses the city and pushes them out, and that’s good for the city.

LN: Who is your customer?

RC: That is changing, almost daily.

It might be people coming down for the summer or school holidays but by the same token we’ve got a lot of corporates around us.

We’ve got the BHPs, we’ve got the Elders, we’ve got the Santoses of the world. They’re all coming in from a corporate standpoint.

Then you’ve got your meetings and events group, again corporates who want to have their annual conference or have their training session so there is a range of different markets coming to the city.

And they change. They can be in their late 50s or early 60s to 20 year olds coming in and then you’ve got the football crowd who comes in on a Saturday or September.

There’s a range of different people and we try and target them with our market research but I guess the nature of the Adelaide market is you can’t rest on one segment, you’ve got to go after a lot of them.

We work on a 20 per cent ratio [with electronic marketing]. If we get 20 per cent of all the business – that’s just one way of measuring how successful something is.

LN: You mentioned the local customer but where does international market sit with Stamford?

RC: Currently Adelaide draws a lot of interstate visitors. My statistics suggest that 92 per cent of my business at both hotels come from domestic Australia but by the same token international visitors numbers into Adelaide were up 14 per cent to December – that’s a big increase in anyone’s language.

So it’s certainly a market we’re looking at, certainly the Chinese. I’m really excited about Qatar (Airways) opening up. There are 36 markets in Europe that opens up. There’s a potential $41 million tourism spend in terms of Adelaide if that comes off. That’s considerable.

You get more international flights into Adelaide the whole of Adelaide changes.

I think when these international airlines come they’ll see what Adelaide and South Australia have to offer. They have a pretty high conversion rate.

Adelaide doesn’t get the best of raps but once people start to see it, Adelaide converts.

LN: How important is social media to the hotel?

RC: We’ve had some ups and downs with our social media. It’s important to us from a local standpoint, food and beverage and use of local facilities. I’m not sure it translates into driving room-night business, interstate and internationally

Certainly, I think if people are interested they’ll go onto Facebook and Twitter and follow that but I don’t think that drives accommodation into hotels.

It’s certainly an element of it but social media itself is very important to locals and driving food and beverage into hotel activities.

LN: What percentage of your business would be from the internet?

JC: A good 45-50 per cent of our online business comes from third-party websites. Expedia, Wotif, it comes through all that and we subscribe to that because you just have to be in it.

They are necessary evils but consumers are beginning to wise up. Almost 50 per cent of our online [business] comes from our own website.

That’s almost unheard of. Most websites I’ve worked [for] runs around 30, so I think that dynamic is changing.

People are searching through these websites then going and looking for local website because they’re smarter and they get the little extras.

LN: What is your relationship with online hotel booking agencies?

RC: We subscribe to them. We participate in them.

Iconnect or Webjet, and things like that, they are very important because they make it simple for the consumer.

Expedia and Tripadvisor, those are very important.

LN: And that’s where you see repeat customers?

RC: Absolutely. You get better value, better inclusions and you can do what you need to do.

You’re not locked in the way you’re locked in to third parties.

LN: Has the Stamford chain felt the small bar trend?

RC: That’s had quite a material impact on us. Over the last 18 months there’s been 137 small pop-up bars.

We operate two nightclubs – we’ve seen a downward trend in our revenue from nightclubs because people are now going from that. That trend has shifted from an alcohol consumption to a more refined experience.

LN: How do you respond to that?

RC: We have to change the way we do business. We’re changing both our outlets.

We look at both our properties here and focus on the food offering.The grand bar down at Glenelg, we focus on our lunch and evening trade as opposed to our nightclub trade because families will come and have a burger or fish and chips and watch the world go by.

We’re migrating our nightclub to a later evening beverage and food option…

You’ve got to change with the times. Legislation has caused this to happen. I can sit here and bang the table and say that’s not fair – no, I’ve got to change our concept and work with it.

Read more of our 10 minutes with… interviews with local business leaders here.

 

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