HVS EMEA Hospitality Newsletter – Week Ending 13 May 2016 (May 14, 2016)

SBE to Acquire Morgans Hotel Group

American hospitality, real estate and entertainment group SBE has entered into a definitive agreement to acquire Morgans Hotel Group. Morgans’ portfolio comprises 13 owned, operated or licensed hotel properties in London, UK; Los Angeles, New York, Miami, San Francisco and Las Vegas, USA; and Istanbul, Turkey. The transaction, which is expected to close later this year, in the third or fourth quarter, will see SBE acquire all of the outstanding shares of Morgans common stock for US$2.25 per share in cash, which, together with the exchange of Morgans Series A preferred securities, the assumption of debt and transfer of capitalised leases, represents a total enterprise value of approximately US$794 million. Following the deal, SBE’s hotel arm will grow to 20 properties.

Frasers Purchases the Dresden Maritim and Deka Buys a Cologne Holiday Inn Express Development

Frasers Hospitality Trust has acquired the Maritim Hotel & Internationales Congress Center Dresden, in eastern Germany, for €58.4 million from Internos Global Investors. The lease with Maritim for the 328-room hotel was recently extended. Other recent hotel sales in Germany include Deka Immobilien’s purchase of a 323-room Holiday Inn Express hotel currently under construction in Cologne city centre from developer GBI for an undisclosed sum. The hotel is expected to be completed in late 2017 and will be operated by Foremost Hospitality.

Summit about Boutique Hotels

HVS is again delighted to be a Platinum Sponsor of the Boutique and Lifestyle Hotel Summit 2016. The two-day event consists of a tour around local boutique hotels, a cocktail reception and speed business card swap on Monday 23 May, followed by the main conference on Tuesday 24 May at the Montcalm Marble Arch, London. HVS London’s chairman, Russell Kett is moderating the “What motivates boutique and lifestyle hotel owners and investors?” panel session, where hotel owners and investors will discuss what they look for in a boutique property, especially in today’s changing market dynamics. Places are available at http://www.boutiquehotelsummit.com/buy-tickets/, and Russell and colleagues look forward to seeing you there.

Marriott Makes its Move into Macedonia

Marriott International has opened its first hotel in Macedonia in the country’s capital, Skopje: the 164-room Skopje Marriott Hotel, which is on the city’s Macedonia Square, overlooking the Vardar River. With more than 1,500 m² of meeting and event space, the hotel also has a fitness centre and swimming pool.

Leonardo Adds Prague to its List of Destinations

Leonardo Hotels (Fattal Hotels Group’s European division) is adding a new destination to its portfolio this month. In mid-may the group will take over the Fusion Hotel Prague, in the Czech Republic. The 91-room hotel, near to the city’s famous Wenceslas Square, will continue to operate under its current name until it undergoes a renovation at the end of the year, after which it will be rebranded.

Dalata Picks Up A Half-Finished Hotel in Cork

Dalata Hotel Group has finalised a deal to purchase a hotel development in Cork, Ireland, for €10.2 million. The site, on Beasley Street in the city centre, has planning permission for a 121-room hotel. The property is partly constructed and work is due to recommence by the end of the year. The hotel is expected to open in the first half of 2018. Dalata plans to invest €22 million in the project overall, including the site acquisition price.

NH Collection Arrives in Germany

NH Hotel Group has launched its NH Collection chain in Germany by opening not one but four new hotels under the upper-upscale brand: the 268-room NH Collection Berlin Friedrichstrasse, the 256-room NH Collection Frankfurt City, the 129-room NH Collection Hamburg City and the 240-room NH Collection Dresden Altmarkt. However, this quartet will soon be a quintet when the NH Collection Köln Media Park opens its doors on 1 June 2016. The expansion of the brand is part of the Spanish group’s strategic five-year business plan. NH aims to have 68 NH Collection properties in operation by the end of the year.

More Mercure in the UK...

AccorHotels has signed a franchise agreement with DC Hotels (Bridgwater) Ltd for a new Mercure property in the UK. The Mercure Bridgwater is scheduled to open in August 2017 in the historic market town of Bridgwater in Somerset, southwest England. The hotel is expected to have more than 100 guest rooms and will join AccorHotel’s existing portfolio of 86 Mercure properties across the UK.

...A New Novotel for Cairo...

AccorHotels has signed a management agreement with International Trade Co. (a subsidiary of Al-Yassin Holding for Financial Investments) for its sixth hotel in Cairo, Egypt. The Novotel Cairo East is expected to open in 2019 in the city’s Nasr City district. The 350-room hotel will be part of a 100,000 m² mixed-use development that will also include a three-storey shopping centre, a medical centre and a residential tower. Accor currently operates five Novotel-branded hotels in Egypt and 14 hotels overall (almost 4,000 rooms across nine cities). "AccorHotels is strongly committed to the country and this new development illustrates the confidence of local investors in our brands and powerful distribution platform. AccorHotels have been operating in Egypt for more than 35 years and we are pleased with our continuous expansion in the country, “ commented Olivier Granet, managing director and chief operating officer for AccorHotels Middle East & Egypt.

...And MGallery By Sofitel Sails into Israel

AccorHotel’s MGallery by Sofitel brand is to make its debut in Israel this spring. The David Tower Hotel Netanya MGallery by Sofitel will open before the end of May in the resort of Netanya, on Israel’s Mediterranean coast. The hotel, close to Netanya’s promenade, has 70 guest rooms and five suites. There are now 82 MGallery by Sofitel hotels worldwide.

Lemon Tree to Grow in the Middle East

India’s third-largest hotel brand, Lemon Tree Hotels, is to expand into the Middle East. The New Delhi-based group has formed a partnership with Australian real estate franchise Raine & Horne Dubai to develop at least eight properties across the region over three years. The focus will initially be on Dubai and Abu Dhabi, followed by Saudi Arabia, Oman, Kuwait and Qatar. Lemon Tree Hotels’ deputy managing director, Rattan Keswani, said, “Lemon Tree Hotels is delighted to be expanding into a region that Indian travellers are so keen to visit, and to fill the gap in the market for non-five-star hotel brands ahead of Expo 2020.” Lemon Tree’s current portfolio comprises 29 hotels (more than 3,200 rooms) across 18 cities in India, with a further 11 properties in the pipeline.

Mövenpick’s Latest Development a Breeze

Mövenpick Hotels & Resorts has formed a strategic partnership with Al Marjan Island Company to open its first resort in the emirate of Ras Al Khaimah, UAE. Construction is due to start on the project next year on Breeze Island, which is one of four man-made islands off the coast of Ras Al Khaimah that make up the Al Marjan Island destination. The resort is expected to be ready by 2020 and will have 450 guest rooms, 120 branded residences and 70 branded apartments and villas, alongside, food and beverage, entertainment and leisure facilities.

Absolute Share Price Performance Over the Past Week – 5-12 May 2016


Whitbread – Fitch Ratings has affirmed Whitbread's long-term issuer default rating at "BBB" with a stable outlook.

NH Hotel Group
– First-quarter consolidated revenue grew by 8.5% to €301.8 million.

InterContinental Hotels Group – Announced its intention to return US$1.5 billion to shareholders via a special dividend.

For the latest in the hospitality industry, please visit: http://www.hvs.com/. You are also welcome to contact the following personnel.
Russell Kett, Chairman – HVS London (@russellkett) [email protected]
Charles Human, CEO – HVS London/HVS Hodges Ward Elliott [email protected]
Simon Tucker Brown, Managing Director – HVS Executive Search Europe & Middle East [email protected]
Chris Martin, Senior Director – HVS Hodges Ward Elliott [email protected]
Puneet Kanuga, Director – HVS Hodges Ward Elliott [email protected]
Arlett Hoff, Director – HVS London [email protected]
Sophie Perret, Director – HVS London [email protected]
Tim Smith, Managing Partner – HVS Cape Town [email protected]
Demetris Spanos, Managing Director – HVS Athens [email protected]
Hala Matar Choufany, Managing Director – HVS Dubai [email protected]
Ezio Poinelli, Director – HVS Milan [email protected]
Louise Fury, Senior Editor and EMEA Hospitality Newsletter Author – HVS London [email protected]

Disclaimer: Information provided above has been gathered from various market sources. HVS has not independently verified the accuracy of the information provided. Interested parties should not rely on the information as statement of facts and are advised to make their own independent checks to verify the information provided. For further information, please feel free to contact HVS London.

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