Blenheim Palace & The Business Of Heritage

Blenheim Palace, the home of the 12th Duke of Marlborough is also a business, and the business has been transformed in the last 15 years under the management of its first professional CEO, John Hoy. Blenheim Palace is one of the most spectacular buildings in the UK and a World Heritage site. It was built to celebrate the battle victory of the first Duke of Marlborough, and 300 years later is still the family home of the 12th Duke, which makes it one of the most enduring ‘family concerns’ we’ve ever profiled.

But Blenheim Palace is a business too, and over the last fifteen years the family and trustees have overseen the transformation of that aspect of Blenheim’s activities under the management of its first professional CEO, John Hoy. We travelled out to his beautiful workplace to ask about the special challenges of a position at the Palace.

Why did the family decide that they needed a professional CEO and when was that decision made?

The Palace is actually owned by a family trust, which has family members as trustees, as well as some high-profile external advisers with expertise in areas like the law and land management. About 15 years ago, the 11th Duke decided to bring in two of the younger members of the family, who had City and business experience.

That was the catalyst, because they quickly realised that Blenheim needed to modernise if it was going to fulfil its potential, and generate the money needed to keep the palace in proper repair. Part of that modernisation was about changing the business structure, and part of it was bringing in different skills. That’s when they hired me. I had land management qualifications, and experience in running a big estate at Knebworth, and major leisure attractions like Madame Tussaud’s and Warwick Castle, so it was a great fit. And for me – a fabulous opportunity.

What was Blenheim like when you arrived – what did you find?

It was a tourist attraction, but I wouldn’t really call it a ‘business’. There was no budget process, no proper reporting, no strategy, no long-term plan. There wasn’t even a World Heritage site management plan, and you really do need one of those if you have that status. So there was a really pressing need to professionalise the way we worked. We didn’t do marketing or PR back then either – that was a hangover from the ‘70s and ‘80s, when sites like this used to assume that if you opened the doors people would just come.

And yes, it did work that way for many years, but by 2003 that wasn’t enough as there was so much competition. So there were some big challenges, but there were big opportunities too.

What did you do?

We did a complete review, both of what we were doing, and how we did it. And right from the start, I had huge support both from the Duke and the trustees, and more recently from the 12th Duke, since he inherited. I couldn’t have made as many changes as I have without that degree of engagement. They supported me in instituting the professional business processes you’d expect from an entity of this size, and then I started looking at what we were offering people, because the first priority was the core activity – our visitor experience.

We opened up more parts of the Palace, and built a new attraction called ‘The Untold Story’. We also changed the ticket pricing structure to make it more modern and flexible, and we introduced an annual pass, which was pretty ground-breaking at the time but proved to be a great success. A place like this can struggle to get repeat visits because people think they’ve ‘done it’ if they come once. So you have to find ways to tempt them back again; the annual pass was very good at that. We also extended our open season to almost the whole year, which, again, is quite unusual in our sector but allowed us to offer special events in the winter as well.

We also completely overhauled the supporting commercial activities – much better catering facilities, and a superb new shop which is probably one of the best of its kind in the country. Having done all that, our next objective was to explore how we could diversify, and bring in new sources of revenue we weren’t tapping into.

We’re bang in the centre of the country, with excellent transport links, and we have 2,000 acres of some of the most glorious grounds in the UK, but we simply weren’t making the most of any of that. We hardly ran any events, for example. In the last ten years all that has changed. We have events all year round, from celebrity weddings to huge public events like BBC Countryfile Live, which attracted over 125,000 people.

We have sports events, and car rallies, and fashion shows, and contemporary art installations. The Ai Weiwei show in 2014 was phenomenal. Another case of people telling us ‘you can’t do that’, and us replying ‘yes, we can’.

So there’s a huge amount going on, but it is working – when I first came we had around 300,000 visits a year. This year, we may well reach the magical million across all of our activities.

Have you diversified in other ways?

Definitely. The film location side is really booming – we were used for Spectre and Mission Impossible 5, as well as all sorts of smaller productions. And that involves a whole lot of new skills too – you have to balance the need to protect the fabric of the building (literally, in some cases) with what a film unit need to be able to function efficiently. Our head of operations is very good at this, and her team are very experienced, and as a result we’ve got a reputation for being good to work with. That’s essential.

We also look at diversification in a wider sense – not just diversifying what we do at the Palace itself, but within the much larger estate, which is another 10,000 acres. For example, we invested in an industrial estate in Witney, to ensure we have a more even balance between industrial, agricultural, and residential property. Ironically enough, that same site used to be owned by the estate until the government compulsorily purchased it before the last war.

We also have our own construction firm, Blenheim Estate Contractors Limited, which is building both commercial units and market/social housing. That whole area is very complex, with a lot of tax and planning issues, and we always have to decide if a particular development is the right thing to do with land that’s been part of the estate for generations. On the other hand, it can bring in vital revenue, and we’re looking to channel some of that into a new charitable trust, which will make it easier for us to apply for lottery funding for some of our capital and restoration projects at the Palace.

At any one time there’s about £40 million of work that needs to be done, and at the moment we manage about £2 million a year which implies a 20 year cycle. But it’s like the Forth Bridge: by the time you finish you have to start all over again.

Another diverse venture is Blenheim Palace bottled water. That’s fabulous because it gets our name out there in the sort of restaurants and hotels that our potential visitors are likely to use. We’re now exporting the water too, with an emphasis on China and Hong Kong. North America and China are the two most important overseas markets for us, in terms of our visitor numbers.

How important is digital in reaching your visitor audience?

Absolutely vital. We use everything – Facebook, Instagram, Pinterest. Everything.

What role do you see the Palace playing in the wider community?

There are lots of answers to that. On a commercial level, I see Blenheim as a lynchpin for tourism in the Oxfordshire region. It’s imperative that we all work together to maximise the value of the visitors who come here – we’ll all do better if we don’t stand alone. That’s why I sit on the Visit England Advisory Board, and why I was part of setting up Experience Oxfordshire, as well.

Looking more locally, we take our responsibilities to the neighbouring area very seriously. The social housing venture is an important part of that, and the events we run can have a big economic benefit beyond the estate walls – we did a study of the last Game Fair at Blenheim and the wider impact was around £50m for the area as a whole and new events such as Countryfile Live will also contribute strongly to the local economy. There’s also our education work, and all the efforts we’ve made to improve our environmental performance. Things like reducing our waste, and cutting our energy and water consumption – all things that you probably wouldn’t think a stately home would be doing.

All of this is part of the same overall purpose – the same sense of responsibility. This estate has been here for 300 years. We don’t just own the land, we’re part of the landscape. That’s why everything we do is driven by the need to be conscientious land-owners, and careful custodians of the family’s heritage, both now and for future generations.

This feature forms part of the PwC Global Family Business Survey 2016.

It has been reproduced with permission of PwC.