Briefing: Are alternatives now mainstream?

Osprey Equity Partners recently agreed to fund an £80m development of a GoNative aparthotel in East London. They are backed by LJ Partnership.

Alternative accommodation types like aparthotels and hostels are becoming increasingly attractive to investors. More in-depth data from historic transactions and long established properties in the sector, have given investors greater insight on which to base their decisions. This is slowly bringing more products into the mainstream, as our industry experts discuss in these videos:

A report by WATG released last year showed that one attractive element of aparthotels is the cost effectiveness to build. It states that on a site with an £17.5m acquisition cost, a 4 star hotel would take £28.2m to construct and a 4 star aparthotel only £27.2m. It also states that terminal value on the aparthotel would be £93.1m and only £82.3m on the hotel, where both have an exit yield of 5%.

Another difference between hotels and aparthotels highlighted by WATG is that, in an aparthotel, rooms division accounts for some 93% of revenues, whereas hotels take a large portion of revenue from F&B and other areas.

Finally, WATG’s report showed GOP margins of 63% and 49% for the respective aparthotel and hotel.

When completed the GoNative aparthotel will be a 21 storey property. GoNative will manage the property under a hotel management agreement.

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Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: The urban planning revolution

Modern developers and investors are thinking about urban space differently. Mixed-use builds are maximising space in cities, and some hospitality companies are doubling up assets in new projects.

In Manchester, proposals have been made for a new “community” on the site of the old ITV studios. This will have 2-3 new hotels, including an event hotel called Manchester Grande. Nearby, Cycas Hospitality is planning to open two IHG hotels, a Crowne Plaza hotel and a Staybridge Suites, in The University of Manchester‘s campus development.

Our experts give their perspectives on new developments:

The St John’s community development in Manchester is being planned by Allied London, who now have control of the former ITV/Granada studios site. They have also proposed plans for a ‘vertical village consisting of 1,200 homes within six interconnected towers.’ This would be built on a separate area of former ITV owned land.

The University of Manchester‘s campus development is a £1billion project. The Crowne Plaza business hotel and the Staybridge Suites extended stay accommodation will adjoin Manchester Business School’s new two-storey Executive Education Centre. The hotels will serve university visitors and business travellers.

These large scale projects reflect the developments in Stratford for the 2012 Olympics, where IHG also placed two asset classes together; Holiday Inn and Staybridge Suites.

Mixed-use projects and new “communities” are being developed across the globe, often in high rise buildings when space is tight. In Dubai a new ‘Cayan Cantara’ development by Cyan Group will have two towers and an adjoining bridge. The project includes branded residences, hotel apartments, shops, and a spa.

These clever developments will continue to offer hotels, serviced apartments, and other asset classes more and more different ways to fit into the changing urban landscape.

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Video clips produced by yBC for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: Major brands increase presence in Africa

The number of branded hotels in the African market is set to increase. According to a report from W Hospitality Group, Carlson Rezidor’s Radisson Blu brand has the most hotels in the pipeline (22 units), Hilton has 16 units, and Marriott has 11 units in the pipeline. Historically in Africa, financial and security constraints have often meant that projects in development are halted before they come to life. Despite this, there are clear intentions from major brands to enter new regions across Africa.

In this briefing hospitality industry executives discuss the hospitality market in Africa:

A special Market Report on Central Africa from Horwath HTL also states that, ‘more diversified global brands plan to enter the market’. According to the report 2,900 rooms are in the pipeline in Central Africa. This report also found that there has been an increase in business travel in this region.

Radisson Blu’s latest development is a hotel in N’Djamena, Chad. It will have 171 rooms, a health club, and conference facilities, and is due to open later this year.

Last month Hilton Worldwide announced an agreement to open its first hotel in Swaziland. The new hotel will be a Hilton Garden Inn and will be located in Mbabane. It will have 130 rooms and a dedicated event space.

Marriott International has plans to increase its presence in Africa. By 2020 it aims to have 150 properties with 19,000 rooms across 17 markets.

Current projections from the IMF’s World Economic Outlook say that GDP in Sub-Saharan Africa will be 4.4 this year, and in Nigeria will be 1.5. This indicates a slow-down in growth.

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Video clips produced by yBC for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: securing a resilient, lasting hospitality industry in Africa

There is exciting growth in Africa, but what does the industry need to remember in order to build a market that works? Deals need to be solid, finances need to be secure, and the existing culture and infrastructure needs to be considered.

There is little point in rushing through a development that cannot be sustained for the future. It is also vital that there is quality in the product on offer. In this briefing four experts give their views on the key elements for successful developments in Africa:

  • Peter Greenberg, Travel Editor, CBS News with three pieces of advice for the hospitality industry

  • Olaf Schmidt, Global Sector Head – Tourism, Retail & Property, IFC – World Bank Group shares three messages from the IFC

  • Philippe Doizelet, Managing Partner, Horwath HTL – France on what the African hospitality industry could improve on

  • Rohan Patel, Director, Sankara Hotel Group Kenya Ltd on why hotel development projects must be sustainable

 


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Video clips produced by ybc.hpgcms.wpengine.com for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: establishing hotel product for new markets

Hotel brands are expanding across new and exciting global markets in Africa, Asia and the Middle East. In order to fully exploit these vast opportunities, brands must first analyse the needs and expectations in their chosen location. A successful product will be established in a way that embraces the ideas emerging from these unique markets and will avoid using a “cookie-cutter” approach.

Brands are adapting their business strategies to incorporate a sense of place, while maintaining the standards and services which differentiate them from their competitors. This briefing includes case studies and comments from:

  • Patrick Fitzgibbon, SVP- Development, Europe and Africa at Hilton Worldwide on giving an African flavour to their services
  • Jean-Jacques Dessors, COO – Middle East, Africa, Indian Ocean & Caribbean Island, Accor SA on responding to market needs
  • Susan Harmsworth, founder of ESPA on marrying brand standards with a strong sense of place
  • Darroch Crawford, Managing Director of Premier Inn Hotels LLC on tweaking a product to fit the market


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Video clips produced by ybc.hpgcms.wpengine.com for the Hospitality Channel, including interviews from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: the future of Europe

An established market like Europe is one which comes with intrigue, pitfalls and opportunity. The harsh reality of the recession has allowed businesses to reassess and re-analyse growth strategies for their organisations.

There is no doubt that Europe is a complex environment with huge opportunities in certain markets, next to markets which you would struggle to understand any involvement at all. In this briefing we hear expert opinions on the European market and the optimism they see for the continent. Including comment from:

  • Majid Mangalji, President of Westmont Hospitality Group on the difficult times Europe has faced
  • Philippe Baretaud, SVP – Head of Development Europe, Middle East & Africa for Accor SA on exponential expansion for Eastern Europe
  • Patrick Sanville, Director – Hotels of BNP Paribas Real Estate on the silver lining the recession has bought
  • Nick Skea-Strachan, Partner – Hotels of Berwin Leighton Paisner LLP on Southern Europe continuing to struggle
 


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Video clips produced by ybc.hpgcms.wpengine.com for the Hospitality Channel, including interviews from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: Risk vs. Reward on the African continent

Africa has been an inherently risky market for the hospitality industry. The diversity of countries means that understanding one particular area in which to invest can be time-consuming and difficult. However, countries like Kenya and the Ivory Coast are making it much easier to open the door for international investors.

There is still a long way to go, but with compelling figures of ‘a billion middle-class citizens by 2050’ it is no wonder hotel companies are looking to secure assets for the long-term now. Videos in this briefing include clips from:

  • Chief Edem Duke, Minister for Tourism for Nigeria on investment becoming easier
  • Alex Kyriakidis, President – Middle East & Africa for Marriott International on one billion middle-class citizens
  • Roger Kacou, Minister for Tourism for Cote d’Ivoire on balancing the risk and reward of investment
  • Bani Haddad, Regional VP – Middle East & Africa, Wyndham Hotel Group, on the new rules for the African market
 


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Briefing: global development of hospitality brands

Economic recovery globally is in a much better position than it was 12 months ago. Some markets however are still struggling whilst others are thriving and it’s integral to understand the macro-economic fundamentals before getting into the detail.

Whether you are a hospitality developer or an investor, understanding what product is needed in each market is essential and many believe this has fundamentally changed in recent years.

Which markets are the developers investing time and money to get a hotel product into locations? Which hotel product will work well in specific locations? How do you go about putting together a successful deal? All discussed in this briefing, including comments from:

  • Gerald Lawless, CEO of Jumeirah Group on the global growth of the luxury brand
  • Richard Candey, Head of Hospitality at DTZ on what makes a great deal
  • Maria Zarraluqui, VP – Development of Melia Hotels International on the worldwide regions her group are investing in
  • Mark Wynne-Smith, Global CEO of Jones Lang LaSalle Hotels on transactions in the US & EMEA region.
 


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Video clips produced by ybc.hpgcms.wpengine.com for the Hospitality Channel, including interviews from industry conferences such as the most recent IHIF conference as well as specific Hospitality Channel shoots.

Briefing: financing future hospitality developments

The world of finance has seen huge change in the past couple of years, impacting on the majority of sectors across the globe. Trends seen in hospitality are no different. A new market for investment is now apparent as we move into 2013.

Understanding which developments, innovations and renovations will get funding is important. What are the banks looking for? And what are the trends seen in the hospitality funding market? Questions answered in this briefing by:

  • Timothy Lloyd-Hughes, of Deutsche Bank on lending trends seen in Europe.
  • Clive Hillier, CEO of Vision Hospitality Asset Management, on debt still being the major stumbling block in deal making.
  • Nick van Marken, of Deloitte about where he sees investment coming from.
  • And Andrew Sangster, Editor of the Hotel Analyst, on what he perceives banks’ attitude to lending is.

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Video clips produced by ybc.hpgcms.wpengine.com for the Hospitality Channel, including interviews from industry conferences such as the most recent IHIF conference as well as specific Hospitality Channel shoots.

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