HVS EMEA Hospitality Newsletter – Week Ending 12 August 2011

The latest hospitality news from Europe, the Middle East and Africa

Whitbread To Release More Than £50 Million In Equity

Whitbread has announced that it plans to sell and lease back seven Premier Inn properties and adjacent restaurants to LaSalle Investment Management. The deal is expected to be completed in September, when LaSalle will pay Whitbread £53.8 million and enter into 25-year leases for the hotels, which Whitbread will continue to operate. Whitbread commented that the acquisition price represented a profit over book value of £28.1 million and is 87% of the 2007 valuation ascribed to the properties. “Whilst Whitbread remains committed to having a substantial freehold asset base it is our strategy to diversify our sources of funds. This sale-and-leaseback is another example of selectively using our property as an alternative method of funding future growth,” said Christopher Rogers, Whitbread’s group finance director.

Cambridge Crowne For Sale

The 198-room Crowne Plaza Cambridge, in the university city of Cambridge, east England, has been put on the market on behalf of administrators with a price tag of £35 million. The former owner of the four-star hotel, Northern Ireland-based Quinn Group, is currently undergoing a financial restructuring; the group’s insurance arm Quinn Insurance went into administration last year. The hotel is being offered on a vacant possession basis; InterContinental Hotels Group’s management contract for the hotel has expired but a rolling contract has been agreed with the property’s operator.

Hotel Hooked In Pitlochry

Dublin-based Castle Hotel Group has bought the Fisher’s Hotel in Pitlochry, central Scotland, from LaSalle Investment Management for £3 million. As well as taking over the management of the property from Edinburgh-based Crerar Hotels, Castle now plans to invest a further £3 million in the 130-room hotel in order to upgrade it to four-star standards; 80 rooms are currently closed to undergo refurbishment. This is Castle’s second property in Pitlochry, as it also owns the 106-room Atholl Palace; additionally, the group runs five hotels in Dublin, one on the west coast of Ireland and self-catering and holiday homes across Scotland and Wales.

Simply The Biggest And The Best In Moscow

Best Western International has opened its first hotel in Russia. With 970 rooms, the Best Western Vega Hotel & Convention Centre, in Moscow, is the biggest hotel in the US-based group’s global portfolio of more than 4,000 properties. Originally the Vega Hotel, the three-star-plus property is part of a complex built for the 1980 Olympic Games. “As Russia continues to attract more business and leisure travellers, we felt it was a perfect time to join Best Western’s global family of hotels and take on its internationally recognized name and reputation,” said Valery Maximov, the hotel’s general manager. This new addition to Best Western’s family is part of its plan to meet the demand for more hotels in Russia and the CIS countries. “We’ve found that there is a need in Russia and surrounding regions for hotels that offer leisure and business travellers international standards in the midscale and upper midscale markets,” commented Suzi Yoder, the company’s vice president of international operations.

Austria To Get Its First Park Hyatt

Hyatt Hotels Corporation has announced that it is to make its debut in Austria. An affiliate of Hyatt has signed a management agreement with Austrian real estate company SIGNA Holding Group for the Park Hyatt Vienna, which is expected to open in Austria’s capital in 2013. The 143-room hotel is to be housed in a historic building (a former bank headquarters) on Am Hof, the largest square in the city’s First District, which became a UNESCO World Heritage site in 2001. The hotel will be part of a larger mixed-use complex including a Prada flagship store. Once open, the Park Hyatt Vienna will be the seventh Park Hyatt hotel in Europe. By the end of the year, the number of Park Hyatt hotels worldwide is set to grow to 30, a 50% increase in the brand’s presence over the last three years.

A Cut Above At 45 Park Lane

The Dorchester Collection is to officially open its second hotel in London, 45 Park Lane, on 1 September. The 45-room hotel, which was designed by New York-based architect Thierry Despont, will also house US chef and restaurateur Wolfgang Puck’s first European venture, CUT at 45 Park Lane. The hotel was developed on the site of Hugh Hefner’s former Playboy Club and it is the ninth hotel in the collection’s worldwide portfolio. Additionally, this year is the 80th anniversary of the collection’s first hotel in London, The Dorchester. To celebrate, The Dorchester is collaborating with charity Trees for Cities to plant 80 trees in the city, a gesture inspired by the iconic London Plane tree which has graced the entrance to the hotel since it opened in 1931.

More IHG For The UK

InterContinental Hotels Group (IHG) is pushing forward with its expansion in the UK. After publishing its half-year profits for 2011 last week, the group announced that it intends to increase its portfolio in the UK to 297 hotels, with 28 new openings, including a new flagship InterContinental hotel in Westminster, London, and two new properties near the site of the 2012 Olympic Games. Newcastle, York, Manchester, Blackpool, Birmingham, Colchester, Southend, Walsall, Bristol and Edinburgh are other UK cities that can look forward to new properties.

Scotty To Beam Up In Jordan

To boldly go where no man has been before no longer means that one has to be launched into space with the help of a rocket. The final frontier is coming to earth – Jordan, to be precise – in the form of 74-hectare Star Trek-based theme park called the Red Sea Astrarium. However, there will be plenty of time to learn Klingon as it is not due to arrive until 2014. Work on the park, near the city of Aqaba, will start next year. The resort, which will include four hotels, is being funded by US and Middle Eastern investors, including the King Abdullah II Fund for Development, and its construction is estimated to cost US$1.5 billion. Jordan-based Rubicon Group Holding is creating the resort, alongside Paramount Recreation and CBS Consumer Products.

A New Hilton For Africa

Hilton Worldwide has announced plans to open its first hotel in the republic of Chad, in north central Africa. The group has signed a management agreement with US-based holding company Salim Group for the Hilton N’Djamena. The 195-room hotel is expected to open in 2013 in the port of N’Djamena, Chad’s capital, on the River Chari. Commenting on the news, Patrick Fitzgibbon, Hilton Worldwide’s president of development in Europe and Africa, said, “Africa is an exciting continent with greater than ever numbers of business and leisure travellers. Hilton Worldwide aims to have a hotel in every key city on the African continent. With the development of this hotel, we will have a presence in 14 African countries providing a great network for our guests.”

Permission Granted For The First Five-Star Beds In Kruger

The South African Government has given permission for the construction of two new hotels in Kruger National Park, including the first international standard hotel in the park, the five-star, 120-room Radisson Blu Safari Resort Kruger Park, near the Malelane Gate, which is due to open in 2013. A debate has been raging for years on increasing the number of tourist beds in the park and some environmentalists oppose the scheme, citing that it will damage biodiversity. However, the Government has stated that it plans to ensure that the hotels are created using the latest green technology and sustainable practices. The 181 communities residing in the park are supporting the development, which will bring jobs and training to the villages. The park’s communities have also been granted a 20% ownership stake in the project. The second hotel is the 125-room Skukuza Conference Lodge, which will be built at the Skukuza Rest Camp.

Absolute Share Price Performance Over the Past Week – 4-11 August 2011

Accor – Accor weakened below its 50-day Exponential Moving Average Price.

Meliá Hotels International – Meliá dropped to a 13-month low.

InterContinental Hotels Group (IHG) – Evolution gave IHG a "buy" rating.

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Charles Human, Managing Director – HVS Hodges Ward Elliottchuman@hvshwe.com
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Louise Fury, Senior Editor and EMEA Hospitality Newsletter Author – HVS Londonlfury@hvs.com