HVS Hospitality Enews - W/e 22 March 2002

Robert Breare, the Chairman of the Scotsman Hotel Group, is reportedly considering making a bid for Malmaison, the hotel chain which he founded nine years ago in partnership with Ken McCulloch. The chain is currently owned by property group Marylebone Warwick Balfour (MWB), which acquired the five hotels in September 2000 from Wyndham International for £77 million in a joint venture with the then SAS International Hotels. MWB is currently undergoing a financial restructuring and is saddled with debts of a reported £360 million. The Malmaison chain, which has the potential to increase to nine UK hotels, may fetch a reported £100 million. Meanwhile, another up-market hotel, the 90-room Morrison Hotel in Dublin, could soon have a new owner after present owner, the Irish leisure company Thomas Read Holdings, put itself up for sale for £25 million.

Queens Moat Houses (QMH) has rejected an offer made last week by Trefick, the investment vehicle of property developer Jack Petchey, after it considered it to be 'wholly inadequate and opportunistic'. Trefick made a bid to raise its present 0.27% holding by offering to buy a further 25.6% stake in QMH. The offer stood at a premium of 1.2% to QMH's average share price of the previous 12 months, but QMH considered the offer to be less than half of its net asset value per share. Mr Petchey reportedly claimed to have no desire for a controlling stake and had made his offer to encourage and inspire QMH's management. Some analysts take the view that his intentions are to bring QMH into play.

Best Western International is planning to add to its portfolio of four Romanian hotels by franchising a fifth to be built at the Dracula Land theme park in the city of Sighisoara in Transylvania. The company has also launched a new strategy designed to identify those of its European hotels which offer higher standards. Hotels will need to apply for consideration and will be subject to a design and quality review before they can have the right to carry the Best Western Premier name. The Premier designation will be a name rather than a new brand, and the company hopes that between 125 and 150 hotels will have been renamed by 2003.

Hilton International will make its debut in Poland after signing an agreement to manage the 320-room Hilton Warsaw & Convention Centre. The property, which is part of a mixed-use development owned by a group of investors headed by Dirom Building Investments & Development, is set to open at the end of 2004. Meanwhile, the 355-room Hilton London Paddington has reopened, 23 months behind schedule, after a three-year, £60 million renovation courtesy of its owner Muirgold.

Raffles International has signed an agreement with the Pension Fund of the Republic of Turkey to manage two five-star hotels. The Celik Palas in Bursa and the Grand Hotel Efes in Izmir will each undergo a two-year refurbishment and will reopen as the Swissôtel Bursa - The Celik Palas and Swissôtel Izmir - The Grand Hotel Efes, together enriching Raffles' portfolio by 527 rooms. Meanwhile, Raffles has also announced that it has renamed four of its hotels, two in Asia and two in Europe, in keeping with the company's strategy of consolidating the brand identity of its landmark and premium hotels. The two European properties, the Hotel Vier Jahreszeiten in Hamburg and Brown's Hotel in London will each add the Raffles prefix to its existing name. In addition to a new name, the Raffles Brown's Hotel has a new General Manager: Yvette Thuering, formerly GM of Swissôtel Amsterdam, who assumes her new role following the resignation of Peter Richards.

Cendant Europe has followed up last month's opening of the 68-apartment Howard Johnson Serviced Apartments in Bristol by this month unveiling the concept in Nottingham, Manchester and Liverpool. The serviced apartments in Bristol are the first in the world to carry the Howard Johnson brand, and, according to the company, are presently enjoying steady occupancy of 90%. These latest openings bring the number of UK serviced apartments under the brand to 184. Meanwhile, Ramada International is reportedly looking to open a 104-room Ramada Encore hotel in York. The property, which will be operated under franchise by Stannifer Hotels, is set to open in June this year.

Six Continents has sold another of the nine Posthouse hotels it put up for sale following its acquisition of the 79-strong Posthouse chain in April 2001. John Power, the Chairman of the Westmead Business Group, has paid an undisclosed sum for the 83-room Croydon Posthouse Hotel, which had an asking price of £5.25 million. The hotel will now undergo refurbishment and will assume its original name of the Aerodrome Hotel. Elsewhere in the UK, Tussauds Group, in partnership with Charterhouse Development Capital, is to spend £40 million on a new hotel and theme park at its Alton Towers amusement park in Staffordshire. The 216-room Calypso Springs hotel will complement the existing 175-room hotel at the site and is set to open in spring 2003.

Implementation of a cost-savings plan and a comparatively lower dependence on the US market shielded Mövenpick Hotels & Resorts from the worst effects of the impact of the 11 September terrorist attacks. The Swiss hotel and restaurant group saw full year 2001 EBIT fall by 4% to euro 9.6 million and total sales down 10% to euro 279.7 million. Occupancy across its 42 hotels for the year was 62%, with marketwide RevPAR down 0.8 percentage points. Chief Executive Bruno Schöpfer regarded the group's performance as satisfactory.

An additional charge of US$7.3 million resulting from the aborted sale of its subsidiary Choice Hotels Europe (CHE Group) has obliged Choice Hotels International to revise its recently published financial results for 2001. A net loss in the fourth quarter of US$11.9 million now becomes a loss of US$19.1 million, with full year net income being revised downwards from US$21.6 million to US$14.3 million. CHE Group, which was put up for sale in June last year, terminated talks with potential bidders late last month as it could find no acceptable buyer.

German luxury hotel operator Kempinski Hotels & Resorts is to embark on its first cruise ship venture, having signed a contract to manage the liner Kempinski Ganna, which will be the largest ship on the Nile. The vessel, which has 70 de luxe rooms and four suites, will be plying between the Egyptian cities of Luxor and Aswan from 1 August. Elsewhere in Africa, Accor Maroc, in partnership with the private Akwa Group, has opened the 104-room Ibis Moussafir Tangier, bringing Accor's portfolio of Ibis-branded hotels in the country to eight, a total of some 826 rooms.

Sol Meliá and Cuba's state-owned tourist company Cubanacán, which have previously worked together in Cuba and elsewhere, are to team up again to allow Cubanacán to make its debut in Spain. The two will operate a 400-room hotel in Lanzarote on the Canary Islands, which will have the provisional name of Volcan and which is set to open next month.

Guy Hands has struck his final deal for Nomura before he leaves for his new company Terra Firma. The Newco private equity consortium, led by Cinven and including, among others, Enterprise Inns and Legal & General Ventures, paid Nomura a reported £2 billion for a portfolio of 4,159 pubs. Enterprise Inns itself, which saw off a rival bid from Punch, put in £75 million for a 16.8% stake. However, it has an option to buy out its partners in two years, which, if the option is exercised, would make Enterprise the UK's largest pub owner.

More than 30 five-star hotels from across the Middle East region will be battling for honours in an 'Oscars'-style ceremony at the second annual Depa Middle East Hotel Awards. The original list of more than 110 entrants was whittled down in mid February by an international panel of hoteliers, designers, consultants and restaurateurs. Up for grabs on the evening of 18 April at the Semiramis Inter-Continental Hotel, Cairo, will be awards in categories including best new hotel and best design project. Further information may be obtained from Paul Rouse of Mirage Global Events (Cyprus) [email protected].

The share price continues to soar following last week's offer by Trefick to buy a 25.6% stake. The company's statement to shareholders argued that the offer did not recognise QMH's recovery prospects or its progress in reducing its debt.

Deutsche Bank has been impressed by the company's optimistic outlook and places a 'Buy' rating on the stock. Meanwhile, Goldman Sachs has raised its 2002 earnings per share forecast on the company by 65%.

The press view is that Hanover offers good value in the hotel sector, especially in light of the potential acquisitive power of the company's Tweed Investments joint venture.