Module UBLMRT–30–2 Procurement & Contract Practice

CASE STUDY INTRODUCTION

Welcome to our fictional case study involving the hotel chain, “SleepGood Inns”.
The chain originated in 1947, when Michael Harris opened a single hotel in Cornwall. The chain
is now owned by a limited company, SleepGood Hotels Ltd, which is a wholly owned subsidiary
of SleepGood Holdings Ltd. The holding company also owns a few other subsidiary companies,
in a corporate structure advised by their accountants to be tax‐efficient.
SleepGood Holdings Ltd is owned equally by Steven, Maxine and Abe Harris, Michael’s three
(adult) children. Since Michael died many years ago, they have remained shareholders but do
not get involved in the operational management of the hotel chain.
You are in business as a self‐employed “Contract Advisor” – that is, you do not hold a specific
professional qualification, but you advise parties about construction contracts. You have grown
your business from “word of mouth” referrals since graduating university a few years ago.
Today, you received the following email:

Dear [Your Name],

I write further to our earlier telephone conversation.
As you know, SleepGood operates a portfolio of properties throughout the UK. Our brand
position is above the “budget” hotels (e.g. Travelodge, Premier Inn), but we don’t aspire to
genuinely compete with the likes of Hilton or Crowne Plaza. Several of our hotels have a
small meeting room available, but we don’t have facilities to run conferences or events.
Some properties have a small fitness room, with basics like treadmills or cross trainers, but
we don’t have swimming pools or beauty clinics.
The chain has grown organically from the original location. Since the 1950s expansion has
been mainly by buying small hotels and updating their decor to match our branding. In the
last 20 years, we have purchased properties formerly run as independents or budget hotel
chains and done some basic refurbishment to bring them up to our standards – “clean and
comfortable rooms that feel like a home away from home.”
A few months ago, our marketing director’s husband pointed out to her a plot of land for sale
just off the M5, just North of Bristol. She made some enquiries and, to make a long story
short, we were able to secure an option to buy it at an incredibly low price.
We are excited about the opportunity to build our very own hotel, but this is new to us. All
of our existing properties had been built and operated as hotels before we got involved.
Whilst many properties have needed significant redecoration and refurbishment, this will be
the first time we are getting a new building constructed for us. Most of our locations have
around 50 rooms, but for this location in Bristol we think 70‐75 rooms is the sweet spot.
The directors consider that this project gives us a perfect opportunity to start improving the
brand. Whilst the intention is not to become a chain of luxury resorts, we want to raise guest
expectations (and live up to it) and maybe start to offer other amenities. As well as having a
nicer appearance generally, my team is currently looking at the business case for things like a
swimming pool, health club, meeting suites, conference centre, etc.
Module UBLMRT–30–2 Procurement & Contract Practice

Another thought we’ve had, based on the location and size of the land, is that we could also
build a large car park, say 500 extra spaces to be used as a Park & Ride for central Bristol.
One of my team has identified that as a great opportunity to turn a nice profit based on the
location, so we’re keen to explore that further. We would probably get the holding company
to incorporate a new company for that and not brand it as part of the hotel, and we’d need
to think carefully about the layout to make sure the hotel still looked nice. But that extra
revenue stream would really help with the business case!
I attach a plan of the location with a star on the land – sorry it runs off the page a bit, I’ll try
to send you a better map next time. On the image, I’ve circled a track that runs from
Hollywood Lane to the main site. It looks like a strip of public land, plenty big to provide
access for the main entrance. The rest of the site is effectively derelict – apparently it was a
sheep farm some years ago but it’s not really been used for ages. There was some waste
building material dumped in the north corner a few years ago, but otherwise it’s just unused
space, quite near the motorway, by a thriving city – hopefully a perfect location for us!
This is a new challenge for us as none of the company’s management has been involved with
a proper construction project before. We need someone to guide us through the legal and
practical aspects of the entire process. Please let me know if this is something you can assist
with, and how your fees would be structured.
Yours sincerely,
Zara

Zara Abidi‐Harris
Commercial Director
T: 0111 111 1111
E: pcpmodule@uwe.ac.uk
SleepGood Hotels Ltd, 1 Pillow Place, Bedfordshire, B3D N0W

SleepGood Inns ‐ “Where you’ll sleep good, we guarantee it”