As Matt Spence talks about last year’s deal with the Rockefeller family, which catapulted the luxury self-catering company Natural Retreats into the big league, he sounds as though he still can’t quite believe it.
“Mark Rockefeller [son of former US vice president Nelson Rockefeller] was looking for someone to operate his Idaho resort,” says Spence. “He could have picked any high profile American hotel chain, but he backed us. I think he realised we were unpolished – we’re farmers, at the end of the day – but he liked us and he liked what we were trying to do. By May last year we were operating this beautiful boutique lodge he’d built on the banks of the Snake River in Idaho. I had to pinch myself.”
Matt Spence is the founder and CEO of Natural Retreats, which offers luxury self-catering holidays in national parks and areas of outstanding natural beauty. It currently owns or operates four sites in Ireland, six in Britain, two in the US and one in Lanzarote.
The chatty Yorkshireman is passionate about getting people – particularly families – out into the wilderness.
“The great outdoors is the best gym and spa you could ever wish for. It really does get people connected, and recharges their batteries,” he says. “We’re trying to get people out into these fantastic areas. We want to create childhood memories and family holidays that really leave a mark.
“We have 15 national parks in the UK, and they are our most visited locations, but no brands have targeted them. Hotel brands tend to stick to formulae – highways, cities or big resorts. No-one has picked the top 20 locations in the UK and said if we had a place in every one of these amazing locations then we’d have a great travel brand.”
Not until now, at least. Spence and his team want to try to get a minimum of 15 Natural Retreats sites in the UK, 50 in the US and 10 in Ireland. “Europe will be next,” he says.
HOW IT BEGAN
Spence didn’t start with a grand plan. Natural Retreats was born back in 2006, when the Spence family decided to get out of farming. “My mother was in her 70s, and had been a sheep farmer for a number of years. It’s a tough existence, and she basically couldn’t handle the early starts and lambing late at night,” he says. “We’d also been losing money for about 20 years. It was time to call it quits. My family called a meeting and said we need to find another way of earning a living, because this isn’t working.”
Spence’s love of the outdoors was born when he was a child, after his family went to the Yellowstone National Park and Yosemite National Park in the US three years in a row. “The national parks really left a big impression on me,” he says. “I lost my father when I was young in tragic circumstances, so I remember those holidays as the time when we were a whole family, and were at our happiest.”
Spence returned to the Yellowstone National Park on his honeymoon. While he had an amazing time, he found the standard of accommodation to be disappointing. This gave him the idea of putting high quality accommodation into national parks, and when his family were looking for alternative ways of making money, he suggested building luxury self catering properties on the family farm, which is in the Yorkshire Dales National Park.
At the time, Spence was working as regional manager for the marketing team at Coca Cola. He quit his job and then undertook the difficult task of getting planning permission for the nine cottages he wanted to build. “I was very naïve," he says. "I’d never applied for planning permission before – I didn’t even own a house. Our farm is on a Greenfield site in an area of outstanding natural beauty, and is just a mile and half from the town of Richmond. People were very, very nervous about our plans.”
After two years, Spence finally got planning permission and, together with his two brothers, built the first nine cottages. The site opened in 2006, with a further nine cottages opening on the site the following year.
“The cottages were a huge success and we had big occupancies from day one,” he says. “A few private investors put money into the business, which enabled us to buy three spectacular sites in 2008/2009 – one in the Lake District, one in the North Yorkshire Moors National Park and an old gold mine in Snowdonia.”
At that point, the world’s economies went into freefall and Spence had to change tack slightly. “The idea had always been to roll Natural Retreats out to every national park in the UK, but then in 2008 and 2009 the world got into such a bad state that it was pointless talking to anybody about development funding,” he says.
“I looked at the hotel model of just operating facilities – Hilton, for example, doesn’t own any of its hotels. I saw that Natural Retreats was becoming a great little brand and that banks and developers were stuck with assets that were in real trouble, and a lot of people had bought second homes that they couldn’t sell. I decided to go out and speak to people who had cottages and say that we would operate them as Natural Retreats sites.”
Today, Natural Retreats owns 75 per cent of its properties, and operates 25 per cent. “We have no strategy to be an owner or operator. We’re just playing what’s in front of us,” says Spence.
Over the next couple of years, Natural Retreats picked up several sites in the UK and Ireland, found a new investor, and set up its asset ownership vehicle Natural Assets. “We have a number of opportunities where we’re coming in as an operator and we realise that the site is in trouble financially. We will now look at helping both on the equity and the operating side,” says Spence.
So what does the company look for in terms of opportunities? “It’s got to be a site of outstanding natural beauty and the land has to have potential for putting new cottages onto it,” says Spence. “We will also look at resorts that aren't working and need rethinking. Two of our sites in Ireland – Castle Marter and Parknasilla – are E100m hotel resorts. There were 42 cottages on one and 56 on the other that were practically empty. We came in, in conjunction with the banks and owners, and took those assets off them and transformed them. When we acquired it, Castlemartyr had E50,000 a year coming in from the cottages; it now makes more than E1m a year.”
By 2010, Spence decided the time was right to tackle the US.
“I was determined we would open up in the US, because that’s where the idea came from originally,” he says. “I thought all along that Natural Retreats was as well suited, if not better suited, to the US than the UK.”
Spence went over to the States on several visits, meeting up with people he’d been advised might be able to help him. One of these was Charles Adams, principal of developer Celebrations Associates (responsible for the town of Celebration in Florida) who later called him and told him to come and meet someone who was looking for an operator for his site. Much to Spence’s amazement, that someone turned out to be Mark Rockefeller. “I was invited to meet Mark in January 2011 in the John D Rockefeller boardroom in the Rockefeller Centre,” he says. “It was eye-wateringly terrifying – it was just me and him, and I presented to him for seven hours. By the end, I was shattered, and he was probably nearly asleep, but he decided to back us. It was a huge leap of faith on his part.”
South Fork Lodge has 22 guest suites and is situated on the South Fork of the Snake River in Idaho, famed for its fishing. The lodge offers a range of guided activities including fly fishing, kayaking, wildlife-spotting, skiing and heli-skiing.
“I’m so proud that we are a British company and we went into America and got one of the best assets in the Mid West, if not the whole US, from one of the most incredible men I’ve ever met,” says Spence.
The Rockefellers have a strong link with the great outdoors. John D Rockefeller Jr donated millions of dollars to the expansion and creation of America’s national parks, while his son Laurence was a conservationist who helped launch the National Park Foundation. Laurence Rockefeller also created Rock Retreats, a holiday company which created ‘environmentally-focused’ luxury hotel resorts in spectacular natural surroundings.
“A big part of the Rockefeller’s philanthropic work was about getting people into the great outdoors,” says Spence. “John D Rockefeller Senior and Junior and Laurence Rockefeller believed that national parks were about getting back to reality, and that if people took a break in these places it would re-energise them.”
Natural Retreats opened a second site in the US in Virginia Hot Springs, and Spence says there will be another four or five sites opening in the States over the next 12 months.
“Some of these are associated with the Rockefellers and some are not, but I believe that we got all of them because of Mark Rockefeller agreeing to take us on," says Spence. "That’s probably the best due diligence anyone could ever do on us.”
The latest big project for Natural Retreats is the redevelopment of the John O’Groats House Hotel in Scotland. The hotel launched in 1875, and its famous guests included Emmeline Pankhurst. However, the hotel had fallen into a state of disrepair and was a dilapidated eyesore by the time Natural Retreats took it on.
“I fell in love with the area as soon as I saw it,” says Spence. “It’s one of the only wildernesses left in the UK, and I just thought, we have to do something here. I knew it was a big job, but I knew we could do it.”
As part of a £6m regeneration of the area, Natural Retreats is redeveloping the hotel into 19 self-catering apartments – which will be called The Inn – and has built 23 standalone new holiday cottages. “It’s not apartments in the way that people are used to – there's a library, a big roaring fireplace, places to read your paper, says Spence. “It’s not boutiquey – it’s for families and we want people to go out into the wild and get soaking wet – but the quality of the accommodation is really high.”
Several of the cottages have already opened, with the rest opening in stages, and the hotel will launch next year. “We’re aiming for this to be one of the top 10 mentioned places to stay in the UK,” says Spence.
Natural Retreats has also opened The Storehouse, an on-site co-operative shop selling produce from local businesses. “We invited the whole of Caithness county to come to a Meet the Buyer day at the John O’Groats House Hotel and said, ‘if you make anything, bring it along. If it’s any good, we’ll stock it on our shelves’. It was hugely successful,” says Spence.
The opening of the hotel and cottages is part of a wider plan to rejuvenate John O’Groats as an attractive tourist destination. Natural Retreats is working with partners including the Highlands and Islands Enterprise, The Highland Council and Heritage GB on the plans, which include the development of the public areas and the Last House Museum and shop, and the expansion and upgrade of the Journey's End Café, as well as the creation of a new visitor centre.
Spence has strong feelings about sustainability, and the responsibility of tourism operators to the communities in which they operate.
All of the Natural Retreats properties are built on sustainable principles – using locally-sourced materials, and with minimum impact on their surroundings. Other sustainable features include sedum roofs, passive solar-glazing, biomass heating and recycled insulation.
The company is a member of the Green Tourism Business Scheme, which covers a range of areas including energy and water efficiency, waste management and biodiversity.
Spence hasn’t included restaurants or spas in any of his sites, because he believes that guests should spend their money in locally-run establishments.
“Most big hotel resorts detract from the local community. All of the little restaurants and coffee shops struggle to survive because everyone stays on the resort and that’s not very sustainable,” he says.
“When I was trying to get planning permission for the first site in Richmond, I argued that the area needed five star accommodation because it would bring people with money in. Then I thought, if I put a spa and a restaurant in, guests might come with money, but they won’t spend a penny of it outside of the resort.”
At the end of the day, says Spence, it all comes back to making sure everyone associated with Natural Retreats is happy, whether it’s people staying in the cottages, or the people who live in the communities nearby.
“All we want is for families to have a good time, and as long as we can achieve that, I’m happy.”