Bev King left his role as Chief Operating Officer to co-found the highly successful Z Hotels. He shared with us why he took the leap of faith, and how he’s managed to effectively scale his hotel chain so quickly, creating compact luxury rooms across the UK’s leading cities.
After working for three-and-a-half years as Chief Operating Officer for Thistle Hotels, I became frustrated with the delays of working for a large organisation. As a result of this and various other factors, I decided to resign in December 2005, and focus my energy on setting up a new chain of hotels, where the limitations and confines of a large corporate structure wouldn’t hold me back.
The decision wasn’t without its challenges. But through sheer determination and much-needed support from my business partners, Rich Meehan, Jon Raymond, and Jamie Goldstein, we finally formulated the concept for Z Hotels. We launched the model with the opening of Z Soho in November 2011. Our second site came soon after in July 2012 – a 106-bedroom hotel near Victoria Station – and since then, the Z Hotels brand has gone from strength to strength, with us now operating 14 sites across London, Liverpool, Bath, and Glasgow.
Like many other business leaders and entrepreneurs, when I was looking to scale Z Hotels, I knew I needed to secure finance to make my business dreams a reality. One of the ways we achieved this was by having a strong and unique offering, as outlined below:
• Right here, right now: All Z Hotels are in the heart of cities, offering prime locations without the price tag, with priceless experiences on the doorstep.
• We sell great sleep: Our cleverly designed rooms are ideal for a couple of nights in town, and our handmade beds with locally sourced organic bedlinen put our guest’s comfort first.
• Guests come first: Our friendly teams make every stay memorable, as their local knowledge will help you plan your itinerary, suggest a restaurant, and be there to answer any questions you might have.
Furthermore, our focus on high-quality rooms and a premium guest experience has been a key driver behind our five-star reviews, and average occupancy of well above the market across all our sites.
We were first introduced to OakNorth over six years ago, having known some of the team previously. After hearing it was the bank “for entrepreneurs, by entrepreneurs” and seeing it had an impressive track record of supporting other growth businesses in the hospitality industry, such as The Inn Collection Group, Brasserie Blanc and Red Oak Taverns, we were keen to meet the team.
Deepesh Thakrar from OakNorth’s Debt Finance team showed a genuine desire to get to know our business inside and out, and we instantly felt his passion for supporting growth businesses such as ours. We were then invited to go to their Credit Committee and have a Q&A with the decision-makers, and soon after, we agreed to a £4.4m loan with them in April 2017 to support the development of our Covent Garden hotel. Given the positive experience with them, we went on to finance our Holborn and Tottenham Court Road sites with them a year later.
Since then, we have returned to OakNorth several times for financial firepower to scale Z Hotels further. For example, one of our latest loans from OakNorth came earlier this year, when we secured £15m to construct 20 new rooms at our Piccadilly location, upgrade our lift facilities, and add in a new ground floor café, as well as refinancing our first ever facility we had with another lender.
As the Z Hotel brand continues to grow in both scale and success, our pool of funding options has also grown. Despite this, we’ve continued to return to OakNorth for our structured debt solutions, largely due to the certainty of execution the team provides, as well as the unmatched sector knowledge they have compared to other lenders we’ve dealt with previously. Knowing we can count on OakNorth to be our trusted partner that is willing and able to provide us with growth finance quickly and without hassle is a great feeling and one that we don’t take for granted.
The challenging times of both the pandemic and the inflation crisis only made our relationship with OakNorth stronger, as we’ve seen other lenders in the market do the complete opposite to OakNorth and stop supporting UK hoteliers, such as us, altogether.
To any other hotel owners or entrepreneurs from different industry sectors reading this, I highly recommend them as a strong relationship partner that you can count on repeatedly to deliver in the good and challenging times.