HVS EMEA Hospitality Newsletter – Week Ending 13 July 2012

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

New Boutique Hotel For London

Qatar-based Souq Waqif Boutique Hotels recently opened the Adria Hotel in west London. The 24-room property, operated by Al Rayyan Hospitality, is housed in a converted Victorian townhouse, dating from 1870, that underwent a five-year renovation to transform it into a boutique hotel. This is the group’s first hotel outside of Qatar; it currently has four hotels in Doha (also operated by Al Rayyan Hospitality) around the city’s famous market, the Souq Waqif, and another two are due to open before the end of the year. The group isn’t just out to make its mark on the hotel world, however, as it is also opening 12 restaurants in Doha over the course of 2012.

Interstate Makes It Three In The Netherlands

Interstate Hotels & Resorts has opened the Holiday Inn Express Amsterdam-South, its third hotel in the Netherlands and hotel number three out of a nine-property portfolio (1,800 rooms) it is developing across the country with TVHG Budget Group Beheer BV. Jointly owned by Interstate and TVHG, the hotel is located in Amsterdam’s financial district. Interstate also announced this week that it has promoted its chief operating officer, Ted Knighton, to president and chief operating officer. Mr Knighton has been with the group since 1990 and held various positions. He took up the post of chief operating officer in December 2011. “This promotion reflects his accomplishments and the tremendous value and exceptional operations experience that he brings to our international growth strategy,” said Jim Abrahamson, Interstate’s chief executive officer.

A Second Scandic For Trondheim

Stockholm-based Scandic has signed a deal with Norwegian investor and building contractor Arthur Buchardt and Rosenborg Football Club for a new conference hotel in the city of Trondheim in central Norway. The 400-room hotel will be located in the city’s Lerkendal area and is expected to open in 2014. Construction is due to start this month on the 75-metre-high, 20-storey property, which is slated to become an important meeting destination for the region, with room for more than 2,800 conference guests. This will be Scandic’s second hotel in Trondheim, alongside the 155-room Scandic Solsiden.

A Milestone For Foremost

Berlin-based Foremost Hospitality teamed up with STRABAG Real Estate this week in Heidelberg, southwest Germany, to lay the foundation stone for its new hotel in the city, and its eighth hotel in the country overall. The Holiday Inn Express Heidelberg City Centre is expected to be completed in spring 2014. The 152-room hotel will be part of a mixed-use development which will also include 5,000 m² of retail and office space and 200 parking spaces.

Hilton’s Big Venture In Birmingham

Hilton Worldwide has opened its tenth hotel in the UK in the city of Birmingham, in England’s Midlands region. The 285-room Hampton by Hilton Birmingham is the largest Hampton-branded hotel to open outside of the Americas. The hotel, which is operated by Sanguine Hospitality, is housed in a former derelict office building which cost a reported £30 million to renovate. This is Hilton’s second property in Birmingham, alongside the 90-room Hampton by Hilton Birmingham/Star City. Hilton expanded its Hampton brand by opening a total of 31 new properties (3,469 rooms) worldwide in the first half of 2012, four of which are in Europe.

Three Little Pigs To Set Up Home In England

After opening its first hotel, the 26-room Pig, in England’s New Forest National Park last year, Home Grown Hotels is to expand the brand with a hotel in Studland Bay in the county of Dorset and a 12-room bed and breakfast in the city of Southampton, both on England’s south coast. The group has exchanged contracts with Andrew and Karen Pukis for the leasehold of the 23-room Manor House in Dorset, a National Trust property that was built in the early 19th century, for around £3 million. The deal is expected to be completed this November, after which the hotel is to undergo a major refurbishment and will open in June 2013 as the Pig on the Beach. Opening in September 2012, the bed and breakfast property will be known as the Pig in the Wall, and the first hotel in the portfolio is to be renamed as the Pig in the Forest.

Four Seasons Thrice For Tanzania

Four Seasons Hotels & Resorts has signed a long-term management agreement with the owners of the Bilila Lodge resort in the Serengeti National Park in Tanzania, East Africa. Four Seasons is already operating the property, which has 62 rooms, 12 suites and four villas; after an upgrade, the resort will be renamed the Four Seasons Safari Lodge Serengeti in autumn this year. The resort was previously operated by Kempinski Hotels. Four Seasons also has two more properties for Tanzania already planned: a tented safari camp in the Ngorongoro Conservation Area, a UNESCO World Heritage Site, and a beach resort on the island of Zanzibar. “We have long wanted to expand into Sub-Saharan Africa and offer new outdoor adventure experiences to our guests,” said Kathleen Taylor, the group’s president and chief executive officer. “We’re thrilled to have an outstanding location and partners who share our vision to create a world class lodge like no other in the heart of Africa’s finest Safari region,” she added.

Tsogo Sun Moves Into The High-End Boutique Market

Tsogo Sun has opened a de luxe boutique hotel in the suburb of Rosebank in Johannesburg, South Africa. The 72-room 54 on Bath, which has been named after its address on Bath Street, was developed on the site of the former Grace Hotel and office buildings. Tsogo Sun purchased the site from Hyprop Investment last year for a reported ZAR85 million (US$10 million).

Sarovar’s Second Hotel In Nairobi

Indian chain Sarovar Hotels & Resorts is to manage its second hotel in Nairobi in Kenya, East Africa. Sarovar is to take over the 108-room Heron Portico on 1 September 2012. This will be the group’s third hotel outside of India and its third in Africa, alongside the 134-room New Africa Hotel in Dar Es Salaam, Tanzania, and the 134-room Ole Sereni in Nairobi.

A Second-Quarter Rise In Revenue And Profit For Marriott

Marriott International reported a second-quarter net income for 2012 of US$143 million, a 13% rise on the same period in 2011. EBITDA also increased by 13% for the quarter, reaching US$289 million. Total revenue for the second quarter of the year was nearly US$2.8 billion, compared to US$2.6 billion for the second quarter of 2011. RevPAR for international comparable systemwide properties rose by 6.7% and the group’s base management and franchise fees increased by 6%. At the end of the second quarter, total debt was US$2,560 million compared to US$2,171 million at year-end 2011. “In the second quarter, our business performed well in most markets around the world,” said Arne Sorenson, Marriott’s president and chief executive officer. “In Europe, more travellers from the United States, Russia and China helped move RevPAR higher,” he added.

Good Second-Quarter Results For Rezidor

Rezidor Hotel Group achieved a profit after tax of €6.2 million for the second quarter of 2012. Like-for-like RevPAR for leased and managed hotels grew by 5.9% on the same period in 2011, owing mainly to higher occupancies. The strongest RevPAR growth was seen in the Middle East and Africa market, with an increase of 17.1%. Total second-quarter revenue increased by 5.4% to €238.9 million, on account of the healthy rises in RevPAR. EBITDA reached €22.7 million, an increase of approximately 54% on 2011. Commenting on the results, Kurt Ritter, Rezidor’s chief executive officer, said, “I am pleased to report an improved result for the second quarter, despite a continued fragile global macroeconomic climate…We have continued with our asset-light growth strategy, and opened 1,300 rooms in the quarter and our pipeline remains strong and steady at 22,000 rooms.”

Gladen’s Tidings

The news from Spain by Esther Gladen, Business & Market Intelligence Analyst, HVS Madrid. Hotel Albayzín in Granada will be part of the Vincci portfolio: the new Vincci Albayzín is in the centre of Granada and will be a four-star hotel. The reopening is scheduled for the end of this year. The property will be run under a lease contract. Reopening of the emblematic Maria Cristina in San Sebastián: Starwood has invested more than €16 million in the refurbishment of the property, which is part of the Luxury Collection. The total investment, including a subvention of the local government, is approximately €20 million. The property has 107 rooms and 29 suites.

Absolute Share Price Performance Over the Past Week – 5-12 July 2012

PPHE Hotel Group – PPHE dropped 3.7% on high volatility during the past week.

InterContinental Hotels Group (IHG) – Numis lowered its rating for IHG from "buy" to "add"; the share price target remained the same.

Meliá Hotels International – Although share prices fell by the end of the week, Meliá rose 0.1% on low volume during the last seven days.

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)rkett@hvs.com
Charles Human, CEO – HVS Londonchuman@hvshwe.com
Tim Smith, Director – HVS Londontsmith@hvs.com
Chris Martin, Director – HVS Hodges Ward Elliottcmartin@hvshwe.com
Demetris Spanos, Managing Director – HVS Athensdspanos@hvs.com
Hala Matar Choufany, Managing Director – HVS Dubaihchoufany@hvs.com
Christopher Mumford, President, EMEA – HVS Executive Search (@ChrisMumford)cmumford@hvs.com
Philip Bacon, Managing Director – HVS Madrid and Managing Director, EMEA & Asia – HVS Shared Ownership Servicespbacon@hvs.com
Louise Fury, Senior Editor and EMEA Hospitality Newsletter Author – HVS Londonlfury@hvs.com