10 Hotels Project - Institutional Investor
- In January 2009, Focus Hotels Management was approached by
an Institutional Investor to discuss the management of 10 properties prior to
the incumbent tenant going into administration.
- Investor was not allowed to be involved
in operating companies other than as a shareholder.
- Focus Hotels Management identified a
solution to buy the existing leases with new agreements on rent.
- The solution was a profit share lease
with terms similar to a management contract.
- Tenant went into administration in
- Focus Hotels Management bought the leases
from the administrators and finalised and implemented the new lease structures.
- Focus Hotels Management took over the
hotels within two weeks of the administration.
- Before taking over, Focus Hotels
Management carried out a full review of operating efficiencies, identified the
primary issues and put in place plans to address these immediately once in control.
- These plans
- Removal of existing branding, taking the
hotels back to their original names.
- An external and internal clean-up to
enhance the sense of arrival.
- Implementation of management and staff
training to improve morale.
- Significant national sales and marketing
campaign supported by a number of key agencies.
- Purchasing reviews with many new
- Quick fix limited capital programme.
- Implementation of identified operational
- Review of available brands and branded
all the hotels with the best brands available within their competitors set.
- Focus Hotel Management agreed future
brand requirements with Accor and branded the hotels under Mercure.
- A property improvement plan was agreed
with the institutional investor.
- The property improvement plan was implemented within
the capital budget.
Hotel Development and Capital Projects
some quick fix capital projects for immediate returns.
budget and timeframe with the institutional investor and implemented within 3
forward a capital plan with supporting capital returns to upgrade all the
to top 3 star quality,
plan supported by the institutional investor.
capital plan was fully delivered during latter half of 2009 and throughout 2010, on
time and within
- During financial year 2009, the portfolio traded profitably net of all costs.
- In February 2011, 9
became the first significant franchisee of the brand. Revenues have continued to grow across the estate
- In 2011,
revenues were up from
2009 base position by 36% and profits up by 72%.
- The initial agreement for leases on 5
year renewable terms was subsequently extended to 10 year terms.
- By the
end of 2013, and even after the disposal of a
hotel, revenues had continued to
grow by a further 12%+ and net EBITDA profits by 50%+.
- For the year ending 2014 like for like
revenues improved by a further 9.3% and profits improved by a further 20.4%.
- In 2016, the investor decided to sell the
portfolio as it had achieved all their expectations. Subsequently, the final
hotel in the portfolio was disposed of in October 2017.