In this roundup of news from Europe: Fattal/Pandox buy Jurys Inn; European RevPAR predictions shine; hoteliers worry about Irish border; and a wealth of deals and developments.
Hotel News Now each week features a news roundup from a different region of the world. This week’s compilation covers Europe.
Fattal/Pandox buy Jurys Inn for $800m
U.S. private equity firm Lone Star sold Dublin-based Jurys Inn to Swedish hotel owner Pandox AB and Israeli management and ownership company Fattal Hotels for £800 million ($ 1.08 billion). Pandox will have ownership of 20 of the 36-asset chain, with Fattal managing all. Pandox will own and manage the one non-Jurys Inn hotel in the overall package. On the operations side of the Jurys Inn portfolio, 15 hotels are leases with existing third-party landlords and 20 are leases with Pandox. One Jurys property, in Prague, will see Fattal work solely with a third party.
Tom Page, head of hotels and leisure at law firm CMS, which advised Fattal on the deal, said he believed what made the deal more attractive to Pandox and Fattal was the ability of the partnership to purchase the assets on a lease multiple with a lower yield. He said most other bidders probably would have different business models, which would have come with more uncertainty.
Hoteliers predict Europe still to shine in 2018
Forecasts from Whitebridge Hospitality and STR, the parent company of Hotel News Now, predict that Europe’s hotel markets would see mostly sunny skies in 2018, though the temperature would be a little less bright than 2017, reports HNN’s Terence Baker at the 13th New Year Hotel Investment Summit.
One noticeable deviation between the summit’s two speakers, Philip Camble, director at Whitebridge, and Robin Rossmann, managing director at STR, concerned predicted 2018 revenue per available room for London. Camble said it “will decline by no more than 2%,” while Rossmann said it would be flat.
Brexit arguments over Irish border worry hoteliers
Continuing Brexit negotiations between the United Kingdom and European Union continue to falter over questions regarding the “soft” or “hard” nature of the U.K.’s only border, that between the Irish Republic and Northern Ireland, and it is a thorn that is already worrying hoteliers with properties either side of the frontier.
Adam Coburn, GM of the 58-room Four Seasons Hotel, Spa & Leisure Club, in Carlingford, Ireland, six miles southeast of the border, said 2018 might be a difficult year for rural Irish hotels, with challenges including an increase in the price of food and beverage and other imported goods, guests’ reduced disposable income and market uncertainty.
Affordable luxury, extended stay gain Nordic attention
Hotel demand in the Nordic countries is shifting toward affordable luxury and extended-stay properties. According to HNN contributors Sarah Sonne Larsen and Demian Hodari, these two segments will gain more traction in the region “because many of these concepts are considered realistic, clear and smart. … It fits well with the cool, efficient style of Nordic hospitality, which due to high salaries, needs to be smart.”
Larsen and Hodari’s sources said the Nordic hotel scene is undergoing increased diversification, due to new market “disruptors.” Riikka Moreau, senior manager of real estate investment trust The Ascott Limited, said the exiting high demand for extended-stay products is likely to encourage more and new investors to the sector and region as currently guests are using regular hotels and corporate housing in an extended-stay manner due to a lack of supply.
Yotel moves into serviced apartments
Yotel, which has brands YotelCity and YotelAir, is moving into the serviced-apartment sector backed with investment capital from such sources as Starwood Capital Group and disparate hotel owners’ conviction, writes HNN’s Baker. There is no minimum length of stay.
YotelPad’s initial pipeline is five assets, but they cover a gamut of segments and locations, with a ski resort in Utah, sun seekers properties in Miami and Dubai, United Arab Emirates and two sites in Switzerland surrounded by the HQs of major firms and organizations, said Yotel’s CEO Hubert Viriot.
Deals and developments
- Abu Dhabi-based Twenty14 Holdings, the hospitality investment arm of Lulu Group International, purchased The Waldorf Astoria Edinburgh – The Caledonian for £85 million ($117 million), reputedly the largest single-asset transaction in the Regional U.K. market in the last 12 months;
- German real estate company Bayerische Hausbau has appointed Rosewood Hotels & Resorts to manage the 132-key Rosewood Munich, due to open in early 2023 in two 19th Century buildings that were the former headquarters of the State Bank of Bavaria;
- On 11 January, Hilton opened the 170-room Hilton Lake Como, Italy, which includes six meeting rooms for up to 300 persons;
- InterContinental Hotels Group is also expanding in Italy with the Hotel Indigo Venice –Sant’Elena, which is due to open in 2019.
Compiled by Terence Baker.