Featured in this EMEA Hospitality Newsletter - Week Ending 11 March 2005
Colony Capital To Invest €1 Billion In Accor
Accor Reports Its Full-Year Results
LRG To Take 73 Hotels From IHG
A Strong Year For IHG
Southampton Hopes To Celebrate Millennium In 2007
Chelsea For Dubai Two
Peermont Global Buys Two Hotels In Botswana
Might Whitbread Decide To Sell All Of Its Marriotts?
Clarion Collection Calls Twice In Norway
Dawnay Shore Hotels Plans Imperial Measures
Arabian Hotel Investment Conference – Coming Soon

Colony Capital To Invest €1 Billion In Accor
Accor and Colony Capital have been together now for seven years, and it does not seem a day too much for the French hotel chain when it has such a thoughtful partner. Colony Investors VI and Colyzéo are to lead the investment of €1 billion in Accor in two tranches each worth €500 million: one tranche in the form of redeemable bonds and the other in the form of convertible bonds. Accor can use some of the money to shop for new hotels in places such as Russia and the Middle East, and while having €1 billion in your pocket is comforting, what is a hotel company to do if it wants a bit more money for those little extras? The answer is to sign an agreement worth €140 million with investment consortium Foncière des Murs to allow your fixed leases on 128 of your midscale hotels in France to be converted into variable leases. To raise additional funds, Accor is looking to strike a 'sale and manageback' deal on ten of its Sofitel hotels. The company hopes that these two projects together can raise a total of some €400 million over the next 18 months.

Accor Reports Its Full-Year Results Return to Headlines
It was also finals week this week at Accor, and heading for first class honours was pre-tax profit for the full year 2004, which came in at the top end of Accor's expectations by finishing on €592 million, an increase on 2003 of 13.2%. Revenues had been crowned with its laurel wreath back in January for finishing 4.6% ahead (like-for-like) on 2003, at €7.1 billion. The class of 2005 has shown early signs of promise. As at the end of February, RevPAR among European economy hotels owned by Accor was 4.0% ahead. RevPAR was 1.1% ahead across the portfolio of owned upscale and midscale hotels in Europe.

LRG To Take 73 Hotels From IHG Return to Headlines
InterContinental Hotels Group (IHG) announced last September that it had put up for sale a batch of 76 hotels with a net book value of some £1.3 billion. Six months on and IHG has agreed a £1 billion 'sale and manageback' deal on 73 of the hotels – all of them in the UK – with LRG Acquisition. LRG is a consortium of Lehman Brothers Real Estate Partners, Realstar Asset Management and GIC Real Estate, and if the deal overcomes such hurdles as EU merger clearance, then the consortium will receive for its money 68 Holiday Inn hotels, four Crowne Plaza hotels and one Express by Holiday Inn sharing between them a total of 12,841 rooms. IHG's shareholders can expect to reap the rewards of this disposal later in the year. IHG considers 63 of the hotels to be core properties and it is in these that LRG will invest an additional £21 million. LRG will be obliged to make a similar investment in the remaining ten properties after 2007 but only if it chooses to retain an IHG brand.

A Strong Year For IHG Return to Headlines
InterContinental Hotels Group saw its pre-tax profit for the year to 31 December 2004 leap 26.6% to £309 million. Group turnover was 2.0% higher, at £2.2 billion. The hotel division returned an operating profit of £251 million, up 25.5% on the previous year. The UK market received a mention in dispatches for its RevPAR performance – for example, the Holiday Inn portfolio in London saw RevPAR 16.0% ahead – as did InterContinental and Crowne Plaza hotels in the Americas region; they posted RevPAR rises of 8.1% and 7.9%, respectively.

Southampton Hopes To Celebrate Millennium In 2007 Return to Headlines
Marina Developments Ltd (MDL) is Europe's largest marina group. One of the 18 marinas and boatyards it owns and operates in the UK is Ocean Village in the city of Southampton. As part of the £50 million redevelopment of the facility, a ten-storey hotel will be built and MDL has signalled to Millennium & Copthorne (M&C) to come and operate it. M&C expects that building work on the 200-room Millennium Hotel Southampton Ocean Village will start later this year and finish in 2007. A Millennium Conference Centre, with room for 500 delegates, will also be dropping anchor at the marina.

Chelsea For Dubai Two Return to Headlines
Reports from the Middle East region suggest that UK hotel operator the Chelsea Group is to open two properties in the emirate of Dubai. The company has spent a total of a reported US$27 million on the 99-room, four-star Chelsea Hotel and the 281 apartments of the Chelsea Tower, and both properties make their debut next month. For more hot hotel action one should cross the Gulf and head for the western Iranian city of Bakhtaran, where the Mostazafan and Janbazan Foundation is said to be ready to devote the next 30 months to the construction of a 100-room hotel complex costing a reported US$11 million.

Peermont Global Buys Two Hotels In Botswana Return to Headlines
South African resort development company Peermont Global is reported to have completed the acquisition of two hotels in Botswana for a total of US$10.8 million. Peermont Global (Botswana) reached an agreement last December with the owners of the 67-suite, three-star Syringa Hotel in the capital Gaborone and the 53-room Syringa Lodge in Francistown.

Might Whitbread Decide To Sell All Of Its Marriotts? Return to Headlines
Whitbread announced last October that it had plans for a 'sale and manageback' involving its Marriott portfolio. However, the excitement currently being generated by the likes of InterContinental Hotels Group with its asset disposals led newspapers such as The Times to suggest this week that Whitbread too might prefer an outright sale instead. Whitbread responded to the claims made by the press with a tantalising statement in which it said that it was currently in discussions that might or might not lead to the disposal of some or all of the hotels in its Marriott portfolio.

Clarion Collection Calls Twice In Norway Return to Headlines
Choice Hotels Scandinavia has tempted two hotels in Norway into entering the warm embrace of the Clarion Collection. The privately owned 99-room Hotel Bastion in the capital Oslo will join at the start of next month, whereas the Hotel Havnekontoret in the southwestern port of Bergen must wait for its hug, as it will not actually be open until May 2006. Choice Hotels Scandinavia will take a long-term lease on the 116-room property from Norwegian real estate firm FAV Gruppen. Meanwhile, further up the coast, in Trondheim, the results of Rica Hotels' extension work at the Rica Hell Hotel will be unveiled in March 2006. The Norwegian hotelier is to spend some €12 million on the addition of 132 new rooms.

Dawnay Shore Hotels Plans Imperial Measures Return to Headlines
The resort of Torquay down in the county of Devon in southwest England might like to brace itself for the arrival of a world class resort hotel. Dawnay Shore Hotels (DSH) has plans, which are necessarily vague at present, to extensively redevelop the Imperial Hotel into said resort hotel. The 169-room, five-star Imperial Hotel is one of 13 properties in the Paramount Hotel Group, which DSH purchased last summer for £215 million.

Arabian Hotel Investment Conference – Coming Soon Return to Headlines
HVS International is pleased to be among the gold sponsors of the Arabian Hotel Investment Conference. The three-day event, which opens on 30 April, will take as two of its core themes the trends and future developments in hotel financing in the Middle East region. Bernard Mouchbahani, the Managing Partner of ProFinance, and David Jackson, Chief Investment Officer at Istithmar, join Russell Kett, Managing Director, and Director Bernard Forster from HVS International's London office on the list of distinguished speakers. Further details are available from the website www.arabianconference.com click here.

Absolute Share Price Performance Over the Past Week 03/03/05-10/03/05

Accor - Deutsche Bank raised its rating to 'Buy' and lifted its target price from €35 to €42 on full year results that were in line with expectations and on news of Colony Capital's investment.

InterContinental Hotels Group - Results were in line with the expectations of UBS. The analyst, though, expressed concern about IHG's long-term growth potential; UBS retains its 'Neutral 2' rating.

NH Hoteles - Analysts were reported to be concerned about NH Hoteles' investment in tourist projects in the Dominican Republic in that it might signal a change in strategy; that is, away from investment in urban hotels.