Domestic

Case Studies

Huge savings for administrator of large hotel group

Client:

McKever Hotels East Limited, McKever Hotels South Limited, Access Accommodation Services Limited and McKever 99 Limited (all In Administration) (“The Group”) was one of the country’s largest privately owned hotel groups with a nationwide chain of more than 20 hotels, apartments and hostels.

Situation:

In March 2010, Business Cost Consultants (“BCC”) was appointed by James B Stephen and Dermot J Power (of BDO LLP, the world’s fifth largest accountancy organisation) in their capacity as Joint Administrators of The Group, to audit and manage energy procurement for The Group and to ultimately reduce energy costs. This is a very specialised area. BCC is one of the few companies in theUKto tackle such complex issues and lengthy negotiations with suppliers when a company with multiple sites goes into administration.

Strategy:

BCC’s team of consultants analysed The Group’s utility accounts, which included 14 electricity supplies and 9 gas supplies. This analysis generated a comprehensive and detailed report identifying areas where savings could be made. Once the cost saving areas had been identified, BCC’s team used their expertise to tap into market intelligence and secure competitive energy contracts, as well as negotiate and secure refunds on behalf of The Group.

Results:

Following months of negotiations, in July 2010 BCC secured an extremely competitive contract for the supply of gas. Savings of over £55,000 per annum (33%) were made. BCC also secured a rebate of over £35,000 on behalf the client by ensuring that the contract was backdated to June 2009, the date The Group went into administration.

In November 2010, a breakthrough was also made with the electricity procurement by securing a competitive contract resulting in estimated savings of around £190,500 per annum (49%). Again, BCC was successful in ensuring that the contract was backdated, resulting in an expected rebate of around £114,000.

In addition, there are ongoing savings on both gas and electricity for the sites that remain in administration and there are potential opportunities for further savings at three further sites. BCC continue to work closely with the Joint Administrators of The Group to help them make well-informed decisions about their energy costs and consumption.

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