Page 80 - Stakis Consolidated Teaching Note

It would be too easy to only blame and criticise Andros for
the near collapse of Stakis.

In reality Andros had some very good ideas. His vision of
developing the Country Court Hotels and the Nursing

Homes were ahead of their time. The problem lay with

their implementation. Country Court Hotels which were to

cost between £8 and £10 million each ended up costing
between £13 and £15 million. Cost control was not an area

at which Andros excelled.

The decision to embark on the Country Court Hotels
project was not fully costed or explored. Furthermore,

what was supposed to be a concept catering to a specific

market began to have creeping additions added to it. New
high quality restaurants were added as were leisure

facilities such as swimming pools. The cumulative effect

was to drive costs up, in some instances by in excess of

40%. All of this at a time when inflation and interest rates
were rising rapidly.

Perhaps, unlike David Michels, Andros failed to create a

team which would challenge the efficacy of his decisions. It
is noticeable that the board under Michels was slimmed

down, that control was centralised, that employment was

reduced by over 700 and that costs were tightly controlled
as operating margins were increased.

Essentially, Stakis followed a strategy of recovery instigated

by Sir Lewis which initially addressed the question of
survival. In this instance this meant negotiating terms with