Paul Hardwick - Director

Data produced by the Office
for National Statistics shows that the UK's gross domestic product increased by 0.1% in the fourth quarter of 2009, technically ending the recession. Agreed, it’s a little unimpressive, but, it is growth. Unfortunately, many commentators are predicting that it will be closely followed by a double dip.

However, the performance of hotels is looking up. HotStats briefing data produced by TRI Hospitality Consulting (www.trihospitality.com), provides key performance statistics for a sample of chain hotels, primarily operating within the three and four star sectors. A summary of the figures published in December 2009 is set out right.

2009 clearly shows a negative picture compared with 2008, with Room Revpar across the UK some 8.6% behind the previous year, indeed occupancy and room rates were down across the board. The rate of decline is however slowing, potentially showing signs of levelling off, as demonstrated by the figures for December, which were far more positive. London hotels showed growth in both room and occupancy rates and provincial hotels showed signs of stabilising with only a 2.2% decline in Revpar compared with the same period in 2008, producing a positive shift in Revpar across the UK. The predictions for 2010 are also positive.

Perhaps a reflection of London’s resilience, the last six months have seen some impressive levels of market activity, with the completion of several major single asset transactions. The Stafford Hotel, St James sold for around £77.5m. Ham Yard, a site in Soho, sold for around £27m, with plans to create a £90m hotel that will be operated by Firmdale. Crimson Hotels acquired the Park Inn (former Bonnington Hotel) in Bloomsbury for around £45m. The part completed Silken Hotel was bought by a subsidiary of the bank that had provided the debt for the development, it was previously being marketed seeking offers in excess of £110m. The former Midland Bank headquarters in the City of London reportedly sold for around £40m. Interestingly, only the Stafford was a non-distressed sale. No doubt in part due to the success of these sales, a number of other high profile opportunities are gradually emerging.

                                                                                                                                                                                         The Stafford Hotel, St James

During the last six months Fleurets has received significantly increased numbers of enquiries from prospective purchasers, with fresh interest having been registered in many of the properties on offer. As demand continues to improve, we are likely to see a shortage of market opportunities and, therefore, this could prove an opportune time to market a business and achieve maximum exposure.