Main Photo: The Mercure Manchester Piccadilly, the flagship Jupiter hotel changed over to management by Interstate
Date: December 2020
Names: RBH, Valor, Aimbridge, Interstate, Kew Green
No. of Keys: TBA
Who Are They: Third party management groups are beefing up their teams, in expectation of a busy 2021. Emerging opportunities are expected from sector consolidation, as lenders take on distressed properties, and as landlords determine a new way forward out of the pandemic for their assets.
Established UK player RBH has promoted from within, as founder and CEO Helder Pereira steps down from his CEO role, although he will remain on the company’s board. He is replaced by Dave Hart, previously chief financial officer and a part of the RBH team since 2005. Also moving up is Susan Bland, who has been promoted to managing director. Bland was previously chief operations support officer.
“My time as CEO of RBH has been an outstanding chapter in a wonderful and long career in the hospitality industry,” commented Pereira. ”It is the right time to move on for personal reasons. I am more than confident that I leave the business in the most capable hands with Dave at the helm.”
RBH has continued to sign up new hotels to its management portfolio, during the pandemic. Over the summer, the company signed its second property from the Fragrance Group, taking over management of the Crown in Harrogate. In October, RBH opened the new build Hilton Garden Inn Stoke-on-Trent, owned by Genr8 Developments. Pipeline additions have included a Holiday Inn in Blackpool, being developed by Blackpool Council and Muse Developments; and an AC by Marriott in Glasgow, which Edinburgh developer Chris Stewart Group aim to have ready to open in 2022.
Valor Hospitality, which occupies the unique position of managing hotels across the US, UK and South Africa, is also looking forward to a busy 2021. Brian McCarthy, managing director of Valor in Europe, told Hotel Analyst he is looking forward after a tough year.
“The only positive is, we are all now believing there is an end in sight. I think it’s important that we don’t all get carried away, but we’re going to see a lot of change.” With its business largely spread across the US, UK and South Africa, McCarthy said the main difference has been the different political handling of the pandemic.
“It will undoubtedly lead to better performance margins going forward – there’ll be costs we’ve taken out of the business that will never come back.” However, McCarthy said he did not expect major changes in guest services, such as changes to room service that others have predicted. “I think very quickly customer expectations will realign – from an operational perspective, there’s not going to be too much change.”
McCarthy sees three areas of change, across consolidation, short-term need, and opportunistic. “I would expect some consolidation of smaller third-party operators. We would love to be the leaders of that – from the outset, we put a management platform in place to handle a portfolio of double our current size.”
Valor has more than 75 hotels under management across the US, Europe and Africa; it has yet to sign a property in the Middle East, but set up a Dubai office last year. It has a pipeline of 4,300 keys in development or negotiation.
As distress builds during the middle of 2021, McCarthy said he foresees the need to take hold of hotel assets. “There will be opportunities from lenders – so long as you can be flexible.”
He also expects to see continued signings for third party management, from the construction pipeline. “The development pipeline hasn’t ceased,” and he expressed confidence that poorer stock will leave the market during the 2021 shakeout of the sector.
Valor has also been signing new talent, and recently appointed former HVS consultant Tim Smith. Smith has been appointed to head business development across EMEA, and McCarthy is keen to get him into action: “Tim’s remit will be first and foremost in the UK – we see plenty of opportunity here.”
While Valor operates its current portfolio to the satisfaction of owner DGTO, which bought the hotels from Marathon, McCarthy sees two routes to expansion in the UK. First, he would like another portfolio, “and we’re keen to work with individual owners.”
Recent Valor group signings include Fancourt, near George in South Africa, a luxury 133 room resort with three golf courses. Family-owned, the property has been named South Africa’s leading resort in the World Travel Awards, and lists under Leading Hotels of the World. The group is also about to open a Kimpton in Washington DC, after spending the last few months refurbishing the property with partner Kemmons Wilson Hospitality Partners.
Also making a move is Aimbridge Hospitality, which continues to expand both in the USA and via its international arm, Interstate. In early November, the group revealed it had added 128 properties to its management portfolio, so far this year, and promised to add a further 120 in the next four months.
As well as US, Canadian and Caribbean properties, the additions are spread across western and eastern Europe, and into Russia. At Interstate, the company has recently appointed Jean-Charles Denis as chief operating officer, joining from IHG where he was part of the senior executive team. Interstate has also drawn in Sabina Wyss di Corrado to the new post of vice president of development, Europe; and Nicole Turnhout-Ammerlaan takes the role of vice president operations for Western Europe.
Aimbridge has also expanded its Receiver Services arm, to help manage distressed assets. “We learned from previous financial downturns that working with lenders and special servicers is not a part-time effort,” said Aimbridge CEO Dave Johnson, promising the team had “dedicated, seasoned veterans who have the experience of over 200 previous distressed assignments”.
The announcement by Aimbridge Hospitality that it’s Interstate Hotels division is to manage the 31-strong Jupiter Hotels portfolio in the UK is one such move. This 3,206 room group includes Holiday Inn and Mercure brands. Jupiter’s owners, FICO Holding and SHotels, had been attempting to unload a number of the properties with some openly marketed. Now it appears Aimbridge has been brought in to consolidate the situation at the chain.
At Kew Green, the company has just taken on Sam Barrell, formerly development manager UK and Ireland at IHG, as it’s director of business development. The move to beef up the growth of the business comes at the end of a year that has seen Kew Green strike a deal with Thai partner Siamese Asset, which will see it take on four Wyndham hotels in the country from early 2021, along with a further three properties in development. It has also signed up to be management partner of new hotel group Light Human, which will launch the first of its millennial-focused properties towards the end of 2021. Sites in Paris, Miami, Toulon, Corsica, São Paulo, Vila Real, Rio de Janeiro and Porto have been lined up for expansion.
HA said: Banks appear to be acting early in this downturn and don’t appear willing to “extend and pretend” as they did after the Global Financial Crisis of 2008. But they don’t appear ready just yet to send in the receivers either.
THPT Comment: Hotel chains losing key staff, in this perilous period, appears to be the third party management companies gain….2021 will still be troublesome, but with a global vaccine within sight, hopefully this will get business travellers back travelling and some sense of recovery for the four and five star hotel market….we hope! Looking like 2023/24 before life returns to normal?
First Seen: Hotel Analyst
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