The real-life couple behind hotels website Mr & Mrs Smith

By Peter Shadbolt
Business reporter

Image source, Rachel Juarez-Carr
Image caption,
The couple were inspired to set up the business after a disastrous holiday in the Lake District

The slightly scuffed, but overly formal provincial British hotel has been a staple of fiction writers since Agatha Christie.

But for James Lohan and his wife Tamara Heber-Percy - the co-founders of boutique hotels website Mr & Mrs Smith - the fiction was more of a grim reality in the UK of the late 1990s.

"I think it was the smell of school catering in the corridors that really got me about hotels at the time," says Ms Heber-Percy, casting her mind back to when a posh getaway a few hours from London meant starched sheets, sniffy waiters, and a pin-drop atmosphere.

"It wasn't so much Fawlty Towers as formal towers," adds Mr Lohan, 45.

The final straw for Mr Lohan and Ms Heber-Percy came in 2001, when the couple, then still dating, booked into a spa in the Lake District.

What they had imagined would be a modern, Asian-style spa of massage and martinis turned out to be an austere sanatorium, complete with a public weigh-in, a blood pressure test, and a calorie-controlled menu with no alcohol.

Ms Heber-Percy, 43, says: "I'd got all glammed up to go down to dinner, but when we got there everybody was sitting in the formal dining room in their dressing gowns."

Image source, Mr & Mrs Smith
Image caption,
The website features 1,000 hotels from around the world

The couple made good their escape to a local pub, and checked out of the spa first thing in the morning.

Mr Lohan adds: "I felt like I was escaping my matron at boarding school."

'Enough is enough'

The experience may have been a bad one, but it inspired the couple to set up the first incarnation of Mr & Mrs Smith in 2002, and produce a glossy guidebook to the new style of boutique hotels that were starting to open in the UK.

Ms Heber-Percy says: "We just thought enough is enough, let's just write our own guide, including the things that are important to us.

Image caption,
British hotels of old did not have a great reputation

"Are the sheets Egyptian cotton? Can you get two in the bath? What's the best room to book? Where's the best table in the restaurant?"

The idea to call the guidebook Mr & Mrs Smith sprang from the standard naughty weekend pseudonym used by couples as a sign-in ever since hotels kept registers.

So convinced were Mr Lohan and Ms Heber-Percy that the idea would work that they approached family and friends, remortgaged their house in west London, and raised £180,000.

After sending a photographer to the 41 hotels they had reviewed and decided made the grade, they took the concept to potential publishers.

"We got turned down by all the publishers, who said it was a rubbish idea," say Mr Lohan.

"They were very down on it, but if anything, it made us more determined."

Mr Lohan had previously managed nightclubs, and knew that a well-produced, glossy flyer was the secret to getting a good crowd.

"My thinking at the time was 'how hard can it be?' A book is only 300 flyers stuck together'," he says.

"Of course, it's a bit more complicated than that, but naivety when you are starting out is a very powerful weapon.

Image source, Getty Images
Image caption,
Mr & Mrs Smith is strict about what hotels make its website

"And we'd road-tested the idea with so many people we trusted who were also convinced it was a good idea."

And so, the couple decided to self-publish their guide, signing a distributor who said they would be lucky to sell 5,000 books over three years.

However, the guide was an immediate hit when released in 2003, and got positively mentioned in a number of UK newspapers and magazines.

Mr Lohan says: "We sold 10,000 copies within six weeks."

Bond issue

The first print run of Mr & Mrs Smith went on to sell 100,000 copies - and for some of the boutique hotels featured, referrals from the guidebook were making up 40% of their bookings.

By 2005 Mr Lohan and Mrs Heber-Percy were increasingly aware that the big growth of the internet offered them the chance to refocus and substantially expand the business. And so, the Mr & Mrs Smith hotel booking website was born, with the same strict standards as the book regarding which hotels are included.

Image source, Rachel Juarez-Carr
Image caption,
The couple now have a team of 120 workers

In addition, they also set up a call centre to help customers who have more complex travel requirements.

Today, Mr & Mrs Smith endorses around 1,000 hotels in 81 countries, all of them reviewed anonymously - some by celebrities, such as Cate Blanchett and Stella McCartney. For each booking made via the website, the hotel in question pays the business a commission.

While most of the firm's revenues are from hotel commissions, it also provides paid membership schemes, such as a £400 a year "GoldSmith" level, which offers room upgrades and a "personal travel consultant".

In 2012 to help fund the company's continuing expansion, it issued a four-year bond, which offered a cash interest rate of 7.5%, or 9.5% in Mr & Mrs Smith credit.

Mr Lohan is on record as saying that the bond issue raised "a couple of million pounds".

Although the company is tight-lipped on its finances, the couple say it is continuing to see growth of 30-40% per year. This includes overseas expansion, and the business now has offices in London, Los Angeles, Singapore and New York, with a total workforce of 120.

Regarding which hotels are considered good to be included on the Mr & Mrs Smith website - or how much commission they have to pay - hotel industry analyst Andrew Sangster says there doesn't seem to be any fixed rules or levels.

"It seems to vary depending on how much they want you," he says.

"It is not like Expedia or it's a lot more subjective at Mr & Mrs Smith. It's like one of those red ropes at a nightclub, you're never quite sure what it is that gets you past the rope.

"That said, they have managed to create a very sexy brand."

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