HVS EMEA Hospitality Newsletter - Week Ending 21 May 2010

St James’s Hotel and Club For Sale

The five-star St James’s Hotel and Club, near Mayfair, in London, has been put on the market by property investors the Landesberg and Rosenberg families. The families bought the hotel, which opened in 1980, five years ago for £20 million and invested a significant sum of money in renovating it; offers of more than £60 million are being received for the property. The 60-room hotel is currently part of the Cologne-based Althoff Hotel Collection, which also includes five hotels in Germany and one in France.

Eurazeo Puts B&B Hotels On The Market

Five years after it purchased B&B Hotels, Paris-based investment company Eurazeo has put the budget hotel chain up for sale. Eurazeo, which directly owns a 73.3% stake in the chain, is in talks with investments funds and the deal is reported to be in the second round of bidding. According to its website, B&B Hotels currently comprises 217 hotels across France and Germany, and at the end of 2009 the value of the business was reported to be €439.6 million.

Queensgate’s Knight In Shining Armour

It’s been a tough year so far for South African hospitality company Queensgate Hotels & Leisure, after it defaulted on the leases of several properties early in 2010. But help is on hand for the group in the form of business man Joseph Khumalo. Mr Khumalo recently stepped into the breach and prevented disaster by signing an agreement to acquire a 51% stake in the group, with an investment of R15 million (US$1.9 million). Queensgate’s chief executive officer Andrew Hubbard commented last week: “It has been a long, hard road but I believe that we’ve reached the bottom and have begun the slow recovery.” He noted that the sale will allow the group to recapitalise.

Hotel Sold To Raise Money For Charity

The Doxford Hall Hotel and its ten-acre estate, in Northumberland, north England, has been sold by owner Newcastle-born millionaire Brian Burnie to Robert and Gina Parker for around £9 million. Mr Burnie opened the 25-room hotel two years ago; he bought the property in 1993 from Northumberland County Council and spent 15 years renovating the Grade II-listed building, which was built in 1818. Mr Burnie plans to donate the proceeds of the sale to cancer care charities in the Northumberland region. Philanthropist, Mr Burnie has said: “I have done the stately home bit and I am in the history books and now I want to give something back. While owning property and making money is important it is not as important as people.”

Suitehotel and Novotel…A Match Made In Heaven

Everyone knows that if you mix yellow and blue you get green…but what happens when you blend Accor’s Suitehotel and Novotel brands together? Well, the French hospitality group has announced that it is to carry out this merger and the result will be an entirely new brand: SuiteNovotel, which is to be launched this summer. The new brand is to be developed across the globe through franchise agreements.

Sheraton Has Georgia On Its Mind

Starwood Hotels & Resorts recently opened its second Sheraton-branded property in Georgia: the 202-room Sheraton Batumi. The hotel was constructed in the city of Batumi, on the shore of the Black Sea in the southwest of the country, by Turkish group Nurol Holding for a reported investment of approximately US$65 million. The hotel joins its sister property the 140-room Sheraton Metechi Palace Hotel, in the capital Tbilisi.

Marriott International To Make Its Debut In The Balkans

The territory that is now the Republic of Macedonia, on the Balkan Peninsular, in southeast Europe, was once part of Alexander the Great’s empire; now, centuries later, the country is to join a new empire…an empire of internationally branded hotels. Marriott International has announced that it is to make its entrance into the Balkans with a new hotel in Macedonia. The Skopje Marriott Hotel is to open in the country’s capital city at the beginning of 2013. The hotel is to be developed under a management agreement with Macedonian real estate company DivelopGrupDooel at a cost of €37 million.

Double Growth For Doubletree In Turkey

Hilton Worldwide has announced this week that it will open two more Doubletree properties in Turkey, bringing its Doubletree pipeline in the country up to four hotels. Hilton signed a franchise agreement with Turkish-owned company Pete Muhendislik Enerji Turizm Sanayi ve Ticaret AS for the Doubletree by Hilton, Ankara – Kolej, in Turkey’s capital city. The building that is destined to house the 209-room hotel was previously a bank; the conversion is expected to be completed by late summer 2010. The Doubletree by Hilton, Istanbul – Moda is owned by Turkish construction company Tasyapi Insaat Taahut Sanayi ve Ticaret AS. The 236-room hotel will also be operated under a franchise agreement, and it is expected to open in Istanbul in September 2010.

Premier Inn’s Olympic Gold

Whitbread’s latest Premier Inn is but a hop, skip and a jump from the new Olympic Stadium in Stratford, east London. Even the least athletic of guests will find it easy to hop onto a train, as the Stratford Premier Inn will be the closest hotel to Stratford International railway station. The 267-room hotel, which is to be located at the Westfield Stratford City development, is one of 13 Premier Inn hotels that Whitbread hopes to have up and running in London by summer 2012. The £160 million that Whitbread is investing in these hotels will be money well spent should Whitbread clinch the gold medal for having the most budget hotels in London by 2012. The target the company has set itself is 59 hotels and 8,374 rooms.

A Capital Expansion For Rotana In Abu Dhabi

Hotel management company Rotana has announced that it will manage three new up-and-coming properties in Abu Dhabi National Exhibitions Company’s (ADNEC) Dhr8 billion (US$2.1 billion) mixed-use Capital Centre development, in the emirate of Abu Dhabi. The 300-room Capital Centre Rotana and the 300-room Centro Capital Centre are both currently under construction and are scheduled to open in 2011. Building work on the 200-room Centre Arjaan by Rotana (an aparthotel complex) is due to start shortly and should be completed in 2012.

Gladen’s Tidings

The news from Spain by Esther Gladen, Business and Market Intelligence Analyst, HVS Madrid. NH Hoteles opens its first hotel in the Czech Republic: the 134-room, four-star NH Praga Radlicka, which NH Hoteles will manage under a lease agreement. Fontecruz opens its fifth hotel in Seville. Fontecruz has invested approximately €20 million in this property, which is located in a former palace. Fontecruz plans to open another two hotels in 2011: a five-star, 90-room property in Lisbon and a five-star, 72-room hotel in Berlin. R&P decoración y Construcción plans to create a new hotel company called Lookotels. The company will target properties with advanced technical and ecological equipment, which saves up to a 30% of the energy costs. The typical Lookotel will offer a basic staff of about six people, no room service, vending machines and automatic check-in. The original investment will be €6 million and the estimated construction time six months. This concept will allow the group to offer a 12 m² double room for a maximum price of €55 per night. Accor plans to open another 29 hotels in Spain by 2014. At present the group has a portfolio of 71 hotels in Spain. The expansion will consist of two Suitehotels, one Mercure hotel, 12 Ibis hotels and 14 Etap properties.

Accor's Asset Sale

Rumours abound this week that Accor plans to sell 450 properties out of the 1,600 hotels it currently owns or operates under fixed leases. This sale of the company’s assets is reported to be part of Accor’s “asset right” strategy and is to take place between now and 2013.

13 New Properties For Travelodge

UK-based budget hotel brand Travelodge is to invest £62.4 million in the development of 13 new hotels. Four of these properties will be in London and the rest will be developed in other cities and towns across the England. Once open, these hotels will add another 1,224 rooms to Travelodge’s portfolio.

Absolute Share Price Performance Over the Past Week 13-20 May 2010

Rezidor Hotel Group - The company strengthened 0.3% on high volume, ending a three-day streak of losses.

Accor - CM-CIC Securities reiterated its "buy" recommendation and kept the share price target at €51.

Sol Meliá - The company declined 2.5% on high volume, falling for three consecutive days.

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For the latest in the hospitality industry, please visit: http://www.hvs.com. You are also welcome to contact the following personnel.

Russell Kett, Managing Director	rkett@hvs.com
Charles Human, Managing Director – HVS HWE	chuman@hvshwe.com
Tim Smith, Director	tsmith@hvs.com
Demetris Spanos, Managing Director – HVS Athens	dspanos@hvs.com
Hala Matar Choufany, Managing Director – HVS Dubai	hchoufany@hvs.com
Christopher Mumford, Managing Director – Executive Search	cmumford@hvs.com
Philip Bacon, Managing Director – HVS Madrid and Managing Director, EMEA & Asia – HVS Shared Ownership Services	pbacon@hvs.com
Louise Fury, EMEA Hospitality Enews Author	lfury@hvs.com