The Smart Money is Checking into Hotels

Cheryl Taylor, Sunday Business

There were 60 deals at sale prices of more than Pounds 2m. Many more hotels and guesthouses were sold below Pounds 2m. The most notable UK deal of 2004 was Blackstone's sale of the Savoy Group's four London hotels for Pounds 750m. Later, the new owner of the Savoy Group, Quinlan Private, confirmed the sale of the Savoy Hotel itself to Prince Alwaleed Bin Talal, for Pounds 230m.

There was a 10.9% rise in hotel values last year, according to [Christie]. It predicts that the market will remain strong in 2005, given the larger number of hotels being sold - notably the 75 hotels owned by InterContinental Hotels Group in the UK, worth Pounds 1.1bn, plus a further Pounds 1.1bn of assets it is also selling, primarily in Europe. In November, Hilton Group instructed Christie to market 11 of its UK hotels.

In the leisure and development sector, the biggest areas of demand for development sites in 2004 were the still fast-growing limited service hotel sector and quality health and leisure clubs, primarily family facilities, says Christie. Although, there are "hot- spots" in the south where the concentration of budget hotels is highest, there are still plenty of opportunities for growth. The company also points out that even though Travelodge and Premier Travel Inn dominate the market, there are plenty of smaller operators seeking sites, as well as fast-growing franchised branches, such as Express by Holiday Inn, Days Inn and Ramada Encore.

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