Hotel Industry Business Outlook: Summer 2012

What does the summer have in store for the hotel industry? The recently published Christie + Co’s Business Outlook Summer 2012 report reveals all.

With the banks coming to terms with their positioning and exposure in the hotel sector, the year to date has been typified by some reasonable transactional activity, according to the publication.

“Particularly with the banks understanding their exposure better, we have seen some high quality assets coming to the market at a far more pragmatic price,” explained Christie + Co director, Jeremy Hill.

Christie + Co’s prediction earlier this year that cash buyers would dominate has been proven correct, as evidenced by Topland Group’s acquisition out of administration of Cliveden House — the jewel in the von Essen Hotels crown — in a cash deal in March. All but two of the von Essen Hotels on which Christie + Co was instructed by the Administrator have now been sold, with the remainder expected to enter new ownership shortly.

Christie + Co has also been involved in some of the year’s other major transactions, selling two Ramada Hotels in London (including Ramada Hyde Park) and two De Vere Hotels, including the Royal Bath Hotel in Bournemouth. A third De Vere disposal, the University Arms in Cambridge has a deal pending.

“The continuing fragile economic environment has meant that trading has been as timid as many predicted but we would still expect this to pick up in the latter half of 2012, particularly as further distressed assets and portfolios inevitably come to market,” added Hill.

Restaurant Sector

The UK’s restaurant operators entered 2012 in optimistic frame of mind despite a last quarter of 2011 which saw insolvencies in the sector jump by nearly a third.

The first quarter of the current year saw like-for-like sales fall, but there were many examples of that trend being bucked. The Restaurant Group was one that reported improved annual sales and increased turnover.

The life in the sector was confirmed by a number of sales made by Christie + Co in the regions where, as forecast, independent operators are encouraged by the availability of some funding to enter the sector. Regional operators also looked to expand their empires.

The letting of 48 former Little Chefs by Travelodge was attention grabbing news earlier this year. Christie + Co is in advanced negotiations with some major high street brands regarding some 40 per cent of the former Little Chefs, with over half of the remainder subject to interest from independent operators.

While eating out remains something of a treat for UK consumers as the economic uncertainty continues, it is clear that it is one pleasure that consumers are loathe to give up altogether — which offers hope for the remainder of what is likely to be an eventful year.


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