In the Clan

By The Drum, Administrator

January 12, 2007 | 8 min read

When Ruaridh Macdonald was announced as marketing director of the UK’s largest privately owned hotel group, Macdonald Hotels, at the end of last year eyeballs were rolled.

Indeed when Ruaridh – the son of Donald Macdonald, executive chairman and founder of Bathgate-based Macdonald Hotels – was ‘headhunted’ by his family’s business in 2003 from SSK to spearhead the development of the new Aviemore Highland Resort, the sniffs of nepotism were audible.

However, such aspersions would, in this instance, be unfounded. Ruaridh Macdonald did not take a conventional route straight into the successful family business.

He studied agriculture at university before spending a year in the industry at a meat processing plant in Bridge of Allan. However, his affair with meat processing was shortlived, as following the BSE crisis Macdonald was led to a change in direction, choosing to go back to university to study business management and marketing.

On completion, still keen to work in the agro-food business, he joined Grampian Country Foods’ management trainee programme.

Grampian had, at that time, just taken over Halls of Broxburn and this gave Macdonald the chance to work on a big brand relaunch.

Macdonald’s next move was to Highland Spring, staying in the food and drink sector, working with then marketing director, Liz Breckenridge, for two years in brand marketing.

“Highland Spring is a small company, yet people have the perception that it works with bigger budgets and is a much bigger company than it actually is,” says Macdonald, of his time at the water company. “It just used its marketing and PR budget extremely wisely.”

From Highland Spring, he stepped out of his comfort zone in the food and drink sector to tackle the conferencing and events market with SSK.

And it was towards the end of this three-year spell at SSK that he took his first foray into the family business.

“I was quite happy at SSK and we were doing very well,” says Macdonald. “Aviemore – a joint venture between Macdonald Hotels, Bank of Scotland and developer Teesloch – was still embryonic in terms of development. One of the biggest chunks of investment in the Aviemore resort was the conference centre. Macdonald Hotels initially asked me to come and help out with the structure due to my experience of conferencing and events with SSK. But there was still no real hint of joining the group. But as the planning developed, I was drawn deeper and deeper in.

“Aviemore was good for me as it was a new development. I didn’t want to stumble straight into the main group because of the politics and all of the baggage that such a move might have brought.

“I could plough my own furrow in Aviemore, if you like, making a mark for myself. What I really needed to do was prove myself. One thing that I didn’t want people to say if I came into the main group was that I was there because of who I was. I came in to do a job and to do it right.

“I’m not that bothered about what people think, though... but there is always that perception.

“But if I could manage and survive in Aviemore, then I could pretty much survive anything that the company could throw at me.”

We are sitting in a lush, leather and oak meeting room in the idyllic Houstoun House Hotel – of course, part of the Macdonald empire.

He has just travelled from business up north and will soon be readying himself for the return journey home.

“I hadn’t considered joining Macdonald Hotels when I did, however, opportunities arise, and this was a good opportunity for me,” he muses.

Macdonald Hotels operates 65 hotels in the UK (as well as four time-share resorts in Spain), employing 5500 staff across the properties.

Since his appointment in September last year, Ruaridh Macdonald is tasked with the overall marketing function for the group, which comes with a budget of around £3 million per annum.

The business is split down to three levels, the Group; Regions [the country is divided into five regions]; and Units.

“There is a marketing and communications requirement for brand and group; there is a regional requirement and a requirement per unit,” says Macdonald. “Where we have specific projects – the opening of a new unit, a refurb or relaunch – we will use local agencies to manage that process.

“Local teams have a much better understanding of the area that they are in,” he adds. “We are in the process of relaunching the Bath Spa. To do so we used design, PR and marketing consultancies all from the Bath area. That’s been very effective for us.

“We are in the process of opening a new hotel in Manchester too for September this year (2007). We will take exactly the same approach there.”

The Group uses Glasgow-based 3x1 for its PR needs, however, Macdonald Hotels also retains two London-based agencies, Smarter Communications and Ignis, for its advertising.

“You have to remember, despite very much being a Scottish company, 80 per cent of our business is south of the border,” justifies Macdonald.

“We need to work with agencies that know the market that we are in and understand what we want to achieve. A lot comes down to relationships as well as ability. But at the end of the day, track-record plays a big part. Consistency is also very important for us, especially when you are dealing with a diverse range of agencies.”

Each individual hotel has its own marketing budget, which is built into its P&L for the year. However the group operates an overriding group marketing budget, which can also support at a local level.

Macdonald Hotels has also recently invested £500,000 in a new online bookings engine, justified by the research that showed 45 per cent of the company’s bookings now come through the internet, a figure which is increasing by 8-10 per cent per annum.

“We view the internet as the way forward – in terms of tactical advertising too. Using the internet as an advertising medium is now a huge part of our strategy.”

The drive for Macdonald now, having taken on the marketing directorship, is to reposition the luxury chain in the ever-increasingly competitive marketplace.

“We have a lot to shout about as a company, but given the market conditions we had been drawn into a trading war with the other hotels. We need to stop comparing ourselves to the Hiltons and Marriots of this world, because we have a completely different product to them.

“We will be targeting the four and five star market, but we will be focusing on what we do best.

“We are quite unique in a number of ways,” explains Macdonald, “but one of our main USPs is the diversity of properties that we have – from baronial castles in Aberdeen to state-of-the-art hotels in Sheffield and pretty much everything in-between.

“It makes it easy to get our message across. It doesn’t matter what building you are in, you get the same standards of quality and service.

“We invest more in food than any other hotel company in the UK – the food proposition for us incredibly important.

“Unless guests go to a boutique hotel, expectations are usually that the food will be pretty standard. We challenge these perceptions.

“These are important messages that we are now communicating. We need to go out to the market with a point of difference and our point of difference is our attention to detail – that’s the underlying message to our whole strategy.”

However, it has not all been good news for Macdonald. Recent reports suggested that the hotel chain had made a £30m loss across the group. Despite not wanting to be drawn on the topic, Macdonald goes on to justify the figures, blaming them on the group’s continued development.

As well as the continued investment in the Aviemore Resort, the Group has spent just over £12m on the Marine Hotel in North Berwick. It has finished a hotel in Sheffield – a significant investment – and it recently bought the Holyrood Hotel in Edinburgh outright, as well as its hotel in Cardrona. Macdonald Hotels is also in the process of building a new property in Manchester – a 340-bedroom hotel, the biggest in Manchester.

“Our most important assets are our people and our product,” says Macdonald. “If we don’t look after both of these, then we don’t have a business. We can never stand still. We are either moving forward or dropping backwards.”

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