HVS EMEA Hospitality Enews - Week Ending 22 February 2008

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

HVS HWE To Advise On Fletcher's Bounty

The London office of HVS Hodges Ward Elliott (HVS HWE) is to act as the exclusive advisor to Fletcher Hotel Group in the sale and leaseback of the Dutch company’s 23 hotels in the Netherlands. The collection of three-star and four-star hotels has a total of 879 rooms. Rudy Reudelhuber, a managing director of HVS HWE, said: “This portfolio is an excellent opportunity for an investor to acquire a significant Dutch real estate portfolio at an attractive yield with a tenant that has healthy rent coverage.”

Hodges Ward Elliott Tops The North American Charts

Hodges Ward Elliott (HWE), the joint venture partner of HVS in the European brokerage HVS Hodges Ward Elliott, was the most active hotel broker in 2007 in the North American market. HWE brokered sales worth US$4.4 billion, an increase of 9% on the previous year. Charles Human, a managing director at HVS Hodges Ward Elliott, said: “We are proud of our parent company’s achievement and were pleased to have completed transactions for 20 hotels here in Europe. Our recipe for success of honesty, hard work and intelligent, value-added business plans unlocks value for clients. We are convinced this will lead to a similar position here in Europe.”

Park Plaza Hotels On Westminster Bridge

The view from Westminster Bridge, on the south side of the Thames, in London, is of Park Plaza Hotels taking full ownership of Park Plaza Westminster Bridge. It has done so by raising its holding in Marlbray, the developer of the upcoming aparthotel, from 33% to 100%. Park Plaza Hotels’ wholly-owned subsidiary Euro Sea Hotels made a cash payment of £10.27 million and issued 735,000 new ordinary shares in Park Plaza Hotels to acquire the two-thirds held by the trio of Galliard Homes and the private investors Paul White and Alex Cope. Park Plaza Westminster Bridge, which is to be operated by Park Plaza Hotels, will have a total of 1,037 apartments when it opens in 2010.

W Is For Morocco

Morocco is the country in which W Hotels will begin its North African campaign. The 150-room W Marrakech and an accompanying set of 68 villa residences taking the name The Residences at W Marrakech are set to open in mid 2010 as part of the mixed-use Al Maaden Resort development in the southwestern city of Marrakech. The hotel and residences are owned by Dilam Hotel Development. The campaign in southeastern Africa that Dubai World Africa is to involve itself with will see the African arm of Dubai World Group invest US$200 million in Bilene Hotel, a resort stretching for four kilometres along the coast of Mozambique to the immediate north of the capital Maputo. Dubai World Africa is to build a five-star hotel, a golf course and 500 villas.

Lonrho To Help Restore The Karavia Hotel

The conglomerate Lonrho has a fondness for all things African. Recently, though, it has shown it has a particular soft spot for the city of Lubumbashi in the far south of the Democratic Republic of the Congo. Last autumn Lonrho announced that it was to manage a 256-room hotel at the mixed-use development Luano Grand. Now it has teamed up with the country’s government and the Belgian De Moerloose Group to revive the fortunes of the Karavia Hotel. The trio have formed Karavia 2008 to take a 25-year lease on the 250-room hotel and to invest up to US$20 million in the refurbishment of a property that once knew what it was like to have the Sheraton flag slapping at its pole. When the hotel reopens in around a year's time it will be managed by Lonrho as Karavia: A Lonrho Luxury Hotel.

Sungwon Squares Up To The Cube

BMG Middle East Development, a subsidiary of Germany’s BMG Group, has awarded construction firm Sungwon Corporation, of South Korea, a contract worth Dh300 million (US$81.7 million) to build a 26-storey aparthotel at Dubai Sports City, in the emirate of Dubai. The Cube, a five-star property, is BMG’s first project in the Middle East and the aparthotel will offer investors and individual buyers a range of bedrooms and studios when it is finished at the end of 2010.

Scandic In Good Health In Sweden And Norway

Scandic Hotels is suffering from a touch of blank spot. But worry not, for the company is to heal itself by undertaking a course of franchising that will soon have those minor blemishes on its map of the Nordic region erased. Step one in the healing process will see Scandic Hotels apply its franchise in Sweden for the first time. On 1 April, the Quality Hotel Östersund, which is owned by Joakim Wiklund, will become the 126-room Scandic Östersund City. Scandic Hotels has had a bit of a rash recently too: a rash of hotel projects in Norway. Scandic Hotels is itching to build at Oslo airport. Construction work will begin in August on the 250-room Scandic Oslo Airport, on which Scandic Hotels has signed a lease with Gardermoen Parkering og Eiendom. The NKr300 million (€38 million) hotel is set to open at the end of 2009.

Hotels By Number. In Berlin, Leonardo Colours In Number Four

Leonardo Hotels has sketched the outline of its plans for a hotel under the Leonardo Royal brand in the centre of Berlin. The company, the European arm of Israel’s Fattal Hotels, will on 5 March proceed in an orderly manner to a former police headquarters on Otto-Braun-Strasse, close to Alexanderplatz, to lay the foundation stone. Leonardo Hotels’ fourth hotel in the German capital is set to open in May 2009.

Liverpool Draws Ramada Plaza And Jurys Inn

It was noted in the local press last autumn that Liverpudlian firm Vermont Developments was in talks with Wyndham Hotel Group about the hotel that was to be the centrepiece of The Quarter: Vermont’s mixed-use development in the city of Liverpool, in northwest England. The result of those talks is that Wyndham’s joint venture partner Corinthia Hotels International is to operate that 173-room hotel as the Ramada Plaza Liverpool. The hotel is set to open in June 2010, by which time hotel company Jurys Inns Group will have been enjoying lobscouse for precisely 26 months. The 310-room Jurys Inn Liverpool opens at the Kings Waterfront development on 18 April. Jurys Inns is drawn to the southwest of England as well as the northwest; it has secured permission to build a 170-room hotel in the city of Exeter, in Devon.

IHG Reports Its Full-Year Figures

In 2007 InterContinental Hotels Group (IHG) posted a record rise of 5% in the number of rooms signed; the company now has roughly 585,000 rooms. Shareholders found that their joy was not confined solely to the bedrooms; in the year to 31 December 2007 their company recorded a 12% increase in revenue from continuing operations, to £883 million, and marketwide RevPAR growth of 7%. Chief executive Andrew Cosslett said: “We are positioned well for future growth in what is now a less predictable economic environment.” As if to bear out his words, IHG saw marketwide RevPAR for the month of January 2008 grow by 5.4%.

Millennium & Copthorne Meets Market Expectations

The results posted by Millennium & Copthorne (M&C) for the year to 31 December 2007 were, in the words of M&C's chairman Kwek Leng Beng, “in line with market expectations”. Pre-tax profit rose by 20.9%, to £157.4 million, and revenue increased by 7.7%, to £669.6 million. M&C named London and New York as being among its best-performing gateway cities. But which city is better? There's only one way to find out – RevPAR! New York took the honours in terms of percentage growth; its 14.1% increase was the highest in any of the six geographic regions in which M&C operates. RevPAR in New York was £130.07 compared to £82.23 (an increase of 10.4%) in London. M&C is “cautiously optimistic that [it] will continue to deliver positive results”; in the first four weeks of 2008 the company has seen marketwide RevPAR growth of 11%.

A Record Profit For Rezidor In 2007

Rezidor Hotel Group may be finding it “difficult to predict the market outlook for 2008” but the company found no problem in breaking its record not only for post-tax profit, which at €45.7 million was up 57.6% on the previous year’s comparable, but also for the number of new hotels signed up in a calendar year; Rezidor’s ballpoint rolled across 53 contracts in the 12 months to 31 December 2007. Full-year revenue rose by 11.0%, to €785.2 million, and total RevPAR at Rezidor’s leased and managed hotels rose by 6.7%, to €76.50.

Absolute Share Price Performance Over the Past Week 14-21 February 2008

Sol Meliá - Reports from Spain suggest that the resignation of Cuban leader Fidel Castro was an underlying reason for the sharp rise in Sol Meliá's share price. Sol Meliá has 24 hotels in Cuba.

InterContinental Hotels Group - SG Securities placed a 'Buy' rating and raised its target price from 875p to 890p.

Millennium & Copthorne - Evolution placed a 'Buy' rating and gave a target price of 495p.

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 Directorrkett@hvs.com
Charles Human, Managing Director – HVS HWEchuman@hvshwe.com
Dominique Bourdais, Directordbourdais@hvs.com
Karen Smith, Directorksmith@hvs.com
Marc Finney, Directormfinney@hvs.com
Hadrien Pujol, Directorhpujol@hvs.com
Demetris Spanos, Managing Director – HVS Athensdspanos@hvs.com
Christopher Mumford, Managing Director – Executive Searchcmumford@hvs.com
Philip Bacon, Managing Director – HVS Madrid and Managing Director, EMEA & Asia – HVS Shared Ownership Servicespbacon@hvs.com
Adrian Jones, EMEA Hospitality Enews Authorajones@hvs.com