City Centre 200 Bedroom Hotel Major Refurbishment & Repositioning
Focus Hotels Management was
approached by an institutional investor to take over a 200 bedroom branded 4
star city centre hotel subject to a CVA.
The Issue and Solution
- The CVA provided for the owner to either
take the hotel back or accept a much reduced rent.
- The rent reduction was not acceptable to
the investors and did not reflect the hotels potential to generate rental
- The hotel was in need of capital
investment but was trading reasonably well.
- Revenues and profits had been on a downward cycle for a number
- Focus agreed to buy the existing lease
with a new arrangement on rent and with terms similar to a management contract.
- Focus acquired the hotel lease and
took over the management in October 2011.
- Implemented a full review to understand how existing performance could be improved without significant capital.
- Reviewed the long term development of the
- Reviewed the following areas:
of the property
• The branding
• The management team
and sales management
• Operational review
- Experienced management team in place who understood their market.
- Were losing room rate and some market
- Revenue decisions were made off site at
group central office
local management involvement.
- Significant level of complaints about the
quality of the beds.
- Hotel was tired but clean and well
- Existing brand did not deliver and there
was a difficult relationship with the owning company.
- Hotel had a loyal following which was
declining, or rate was being discounted to retain it.
- A key issue was identified with regards
to the quality of the beds. All beds and associated bedding were replaced
- Installed revenue management and reservations teams based at the
hotel, supported by Focus’ central revenue teams.
- Provided them with the necessary yield
tools to enable them to compete in the local market.
- Developed a revenue and yield culture
enabling the hotel to compete effectively.
- Set up short and long term revenue and
profit related targets.
Long Term Business
- A full review of the existing branding
and the capital required to maintain the brand took place
- Reviewed all other brands to establish if
an alternative would better protect the business.
- Research indicated that the DoubleTree by Hilton brand was best.
- Conversion to this brand involved a full
- Projections justified this investment and
was fully supported by the investor and funding provided.
- Negotiated the brand with Hilton
including all PIP requirements.
- Project commenced in October 2012, managed
by the Focus property team.
- Live under
the DoubleTree brand on 1st May 2013.
- In 2012, Focus improved the occupancy by
10% on the prior year (pre Focus Management) while maintaining average room
- Achieved whilst the hotel bedrooms were
being refurbished during the last 3 months of the year.
- In the first 4 months of 2013, hotel trading was, as
expected, significantly reduced at the peak of the refurbishment programme
while all areas were under refurbishment, although the hotel continued
to trade with little
negative guest feedback.
- Opened as the DoubleTree brand
on 1st May
- Redevelopment project delivered on time,
on budget (significantly below the budget plan produced by the brand and the
previous owner) and above brand expectation and requirements. Focus and
its investor believe the hotel will compete at the top end of the city market
and generate the profits justifying the investment made.
- The hotel had an outstanding trading year
in 2014, performing both above budget and significantly above the expectations
of the owner. The hotel is now one of the top performing hotels in the Bristol
market in both occupancy and RevPAR. The profit performance of the hotel was
at year 4 of the 5 year plan given to our investors for conversion from Ramada
- 2016 exceeded budget and 2017 is on target to be a very successful year, ahead
of all budget plans and the hotel continues to trade as one of the top
performing hotels in the city.
- The STR RGI (Revenue Generation Index) of the hotel continues to perform at
100%+ of its