Month: January 2020

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2020 set for record investment into London hotels

The volume of investment into London hotels could reach record levels in the first quarter of 2020, with approximately £1.5b expected to transact in the capital, according to international real estate advisor Savills.

Rob Stapleton, director at the Savills Hotels team, said: “Investor confidence in the UK hotel market remains high and while political uncertainty in 2019 had an impact on overall deal volumes, yields remained low highlighting that, for the right assets, the UK continues to be a key focus for emerging hotel brands and international capital.

“We have already noted a marked increase in investor enquiries since the General Election result and anticipate this to translate into increased investment activity across the UK hotel market in 2020, with several notable transactions expected to transact in the first half of the year.”

Savills has recorded that UK hotel transactions reached £4.64b in 2019, down 42% year-on-year but 11% above the 10-year average. The number of transactions across the country was also down 47% year-on-year and 6% below the average.

Overseas investors were accountable for 59% of market share, with the top three by country being, Hong Kong (c. £1b), Thailand (c.£450m), and Israel (c.£260m). Portfolio transactions accounted for 52% of investment activity in the UK, similar to 2018’s 53%.

Transactions into London totalled £2.31b, accounting for almost 50% of all UK hotel investment activity. Savills recorded the total volume for the rest of the UK was around £2.33b, representing a 16% (South East), 20% (North), 9% (Scotland) and 6% (South West) regional split.

Key single asset deals in 2019 included: Harrington Hall, sold to London Central Portfolio and ACP off a guide price of £130m; the freehold of the Sofitel London Gatwick which changed hands for a reported £150m; and the Crowne Plaza Kensington, sold to a Singapore consortium led by Heeton Holdings for £83m.

Key portfolio deals included: four Grange hotels sold to Queensgate Investments for £1b; ‘Project Mauve’ (17 InterContinental Hotels Group, Marriott and Hilton hotels were sold to DTP Infinities Corporation for a reported £450m); and Topland’s sale of the Hallmark portfolio for £250m.

Tim Stoyle, head of valuations at the Savills Hotels team, added: “Looking forward to this year we expect to see more stock coming to market across all grades of accommodation but primarily driven by demand for the budget and four-star segments.

“Demand for these assets in London and in core locations across the rest of the UK will be underpinned by the operational performance resulting from the growth of the staycation market, as well as the continued growth in international tourist numbers.”

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NH Hotel Group adds eight properties from Boscolo hotels to their collection

NH Hotel Group has reached an agreement with Covivio, one of the key European real estate players, to operate a portfolio of eight high-end hotels, with prime locations in Rome, Florence, Venice, Nice, Prague and Budapest.

The portfolio includes iconic hotels such as the Palazzo Naiadi in Rome, the Carlo IV in Prague, the Plaza in Nice and the NY Palace in Budapest.

These Boscolo hotels had previously been bought by Covivio. The agreement has an initial duration of 15 years and the transaction is expected to be fully complete by the end of the first half of 2020. However, the hotels in Florence and Nice which are currently being fully refurbished are expected by June 2020 and January 2021 respectively.

This agreement will add 1,115 rooms to NH Hotel Group’s luxury properties. The hotels are centrally located in Rome, Florence, Venice, Nice, Prague and Budapest, six are in the 5-star and two are 4-star categories. The hotels are flagship establishments and they will gradually be rebranded under the Anantara Hotels & Resorts and NH Collection brands.

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Good luck to the Meetings and Incentive Travel Awards finalists

The 2020 M&IT Awards finalists have been announced and we’re delighted to see many of our EDGE Venues licensees have made the shortlist.

Here’s a snapshot of our licensees who have made the cut…

Best UK Conference Centre
Best Overseas Conference Centre
Best Venue Group Meeting Product
  • De Vere Venues
  • Hilton Worldwide
  • Marriott International
  • QHotels
  • Radisson Hotel Group

Good luck to you all and to other finalists for what no doubt will be an exciting and rewarding awards ceremony at Evolution London on Friday 28 February.

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Corporate travel buyer budget forecasts at five year high

The number of corporate travel buyers forecasting bigger budgets for the year ahead is at a five-year high, according to annual research conducted by Business Travel Show. 41 per cent of buyers polled said they would have more money to spend on travel in 2020, compared to 33 per cent last year.

The volume of buyers predicting an increase in travel costs was also at a record high (49 per cent compared to 43 per cent in 2018) and there was significant uplift in those expecting to manage more trips (52 per cent compared to 33 per cent).

114 European buyers took part in this year’s Business Travel Show poll, 56 per cent from the UK, 35 per cent from continental Europe and 9 per cent from the rest of the world. 61 per cent of buyers responded control budgets in excess of £1m.

Other highlights from the survey:

  • 45 per cent of buyers polled will have more to spend on accommodation in 2020 – an increase of 16 per cent on 2019
  • 65 per cent are expecting to book more room nights, compared to 40 per cent a year ago
  • 41 per cent will have bigger airline budgets, rising 10 per cent over last year

Business Travel Show group event director David Chapple said: “Last year’s survey showed a downturn in numbers across the board – with fewer buyers predicting airline, accommodation and overall budget increases. This was unsurprising with Brexit on the horizon and businesses holding back on both decision-making and spending. These figures appear to show a return to form and are back on par (if not slightly above) 2018’s statistics, which is very encouraging news for the industry.”

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London hotel rates up 2.6 per cent in November, finds HotStats

London hotels saw a 2.6 per cent increase in average room rate in November, according to the latest data from HotStats.

Rates increased year-on-year in the capital to £186.53 during the month, with occupancy down by 1.5 percentage points to 82.3 per cent.

Across the United Kingdom as a whole, occupancy was 78.5 per cent and average room rate was £123.43 in November.

A spokesperson for HotStats said: “Revenue growth hasn’t been an issue for UK hoteliers this year. It’s driving profit that has them frustrated.

“In a tale that is becoming all too common for the region, RevPAR (revenue per available room) at UK hotels was up in November, but profit against the same time last year was negative. RevPAR grew slightly 0.3 per cent year-on-year, while GOPPAR (gross operating profit per available room) was down 1.8 per cent year-on-year, illustrating the sometimes incongruous relationship between revenue and profit.”

The divergent revenue and profit picture across the UK in November was also seen in Birmingham, where both RevPAR and TRevPAR (total revenue per available room) were up year-on-year, 3.6 per cent and 1.1 per cent, respectively, against a resulting year-on-year decrease in GOPPAR of 1.5 per cent.

Occupancy in the city was higher than in London, at 83.6 per cent, with average room rate sitting at £94.27, almost half that of the capital.

In mainland Europe, hotels are generating revenue and keeping more of it. November marked the third consecutive month of year-over-year GOPPAR gains for hotels in the region.

GOPPAR was up 4.8 per cent in the month over the same time last year, but is still down 1.3 per cent year-to date, indicative of a previously listless profit performance, despite RevPAR that is up 1.2 per cent.

In November, RevPAR was up 4.2 per cent year-on-year, buoyed by a 1.9 per cent increase in average rate and a 1.6-percentage-point uptick in occupancy to 72.5 per cent.

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Is CSR important to you and the venue you use?

It makes sense to use a venue that reflects your company’s CSR philosophy and policies, but do you check this with them before booking your event? It’s important that event organisers make the attendees feel welcome and the attitude and infrastructure of the venue is a part of this. Jacqui Kavanagh, CEO of EDGE Venues, share her thoughts on what to consider for meetings and events when looking at CSR.

Connecting with the community

Many venues undertake initiatives that support local projects. In America, some venues are creating co-working spaces which can be used by community-based groups. Businesses pay to hire the venue in the usual way, but outside these hours the space can be used by specific groups to encourage and develop their education or skills. There are opportunities for event organisers to contribute to these community projects, either through a team-based activity or meeting people in need of mentoring or training.

Charitable programmes

Venues often support local charitable programmes and an event organiser can partner with them to give back to the local area. This can be done through donations, not necessarily monetary, but giving unused food and drink, stationery and other items to refuges, schools and non-profit organisations.

Sustainability

Selecting a venue that is ‘green’ is good for the environment but can also be good for the delegates. Many venues are building ‘green’ features into their properties, solar power to water reduction, rooftop gardens and recycling points.

Using an accessible and inclusive venue

Everyone needs to move around the venue with ease and in most properties ramps and access to lifts is standard. However, some venues use braille text on signage, hearing loop systems, and have trained their staff specially to understand these needs.

Diversity

Many venues have diversity policies in place, but just don’t publish them. You can ask the venue about their diversity programme or check with independent organisations such as the Disability Equality Index.

A purpose-built conference centre will have different facilities to a hotel group or independent hotel or smaller, unusual venue and their CSR programmes with reflect this, so it’s worth asking them for details before booking your event to make sure that their philosophy works well with your company’s CSR code.