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Latest article from Construction News and cosmetic repair specialist Plastic Surgeon. Budget sector bucks trend. Big growth in value hotels as travellers desert the mid-market.
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34 | 3 November 2011 www.cnplus.co.uk
Inside Knowledge: Client Briefi ng
3 November 2011 | 35www.cnplus.co.uk
been recommended by a developer that wants to build a hotel to lease to Premier Inn.
Getting in with the developers Premier Inn works with – outfi ts such as Opus Land, Reef Estates, funds Aviva and Pripim, retail
Talk of the squeezed middle rings particularly true in the hotel sector. While the wealthy still have cash to spend on luxury hotels, business and leisure travellers have moved away from the mid-market (three to four-star) and into the budget sector.
Consequently, budget operators have major expansion plans. Travelodge announced in July that it had exchanged on 22 new hotels, while Premier Inn is growing strongly.
At the top end, a number of prestigious hotels have had a makeover, such as the Corinthia London, which was converted back into a hotel after being used as o� ces. Another is the fi ve-star Mandarin Oriental Hyde Park, which is getting a new swimming pool, gym and mocked-up rooms on which to base designs for the rest of the hotel.
Budget sector bucks trendBig growth in value hotels as travellers desert the mid-market
� Alex Flach, construction and repairs and maintenance director, WhitbreadWhitbread, the UK’s largest hotel and restaurant group, owns hotel chain Premier Inn, Costa Coffee and Beefeater Grill. It plans to grow Premier Inn from 46,000 bedrooms to 65,000 across the UK by 2015 and has 11,000 bedrooms in its committed development pipeline.
� Alan Rushbrook, director of technical services, Mandarin Oriental Hyde ParkMandarin Oriental has hotels in Europe, the Americas and Asia and is expanding into the Middle East. Schemes under development include hotels in Beijing, Costa Rica, Abu Dhabi, the Maldives, Grand Cayman, Marbella, Milan, Taipei and Moscow.
� John Donaldson, executive director, Arora HotelsArora Hotels has 14 hotels, including Sofitels at Heathrow and Gatwick airports under franchise from Accor Hospitality. It is building a 190-bed hotel at Surrey Country Cricket Club’s ground at the Oval and is the preferred partner for a new 212-bedroom hotel opposite Ascot racecourse. It is designing and constructing four hotels at Heathrow, Gatwick and Stansted airports in conjunction with Premier Inn, which will open in summer 2012, subject to planning.
� Paul Harvey, managing director, international and development, TravelodgeThe company aims to expand to 1,100 hotels and 100,000 rooms by 2025, the equivalent of opening a new hotel every 10 working days.
� Steve Smith, director of procurement, Accor Hotels UK & IrelandAccor has 4,274 hotels with 513,772 rooms in 90 countries. Its 15 brands include Sofitel, Novotel, Mercure and Ibis. Worldwide, it classifies about half its hotels as economy, nearly a third mid-scale and the rest up-scale.
ROLL CALL: WHO YOU NEED TO KNOW
Whitbread choosy about contractorsINTERVIEW: ALEX FLACHPremier Inn has big plans. The budget chain plans to build 19,000 more bedrooms by 2015 and has a committed pipeline of 11,000 bedrooms. Many contractors want a piece of that pie, but Premier Inn is choosy about who it puts on its tender list.
“We have a select list of contractors, most of which we have worked with for donkeys’ years and some more recent ones,” says Alex Flach, director of construction, repairs and maintenance at Premier Inn’s parent company, Whitbread.
He says the fi rm adds two or three new contractors to its list each year, many of which have
specialist Westfi eld and supermarket Tesco – is a good way to win work with the hotel chain.
“It is a good way of discovering how they [new contractors] operate,” says Mr Flach. “If they work well with us, then we put them on the list for the next one we go out to tender on.”
Contractors that own a site suitable for Premier Inn could get asked to build it.
The fi rm would be interested in talking to contractors with a solid track record in sustainable development – even if not in the hotel sector – and London and the Midlands are areas where it is more di� cult to fi nd good contractors, says Mr Flach.
HOTELSCHLOE STOTHART
TOP 10 HOTEL CLIENTS BY VALUE IN 2011 TO DATE
Company No of projects Value (£m)
Bayscape 1 60
Cardiff Marine Group 1 60
Whitbread 17 45.3
Central Regeneration Limited Partnership 1 44.7
Grosvenor Group 2 43.5
Sellar Property Group 1 40
Shangri-La International 1 40
East End Foods 1 35
Renaissance London Chancery Court Hotel 1 20
Chris Stewart Group 1 20SOURCE: GLENIGAN
“We have a select list of contractors, most of
which we have worked with for donkeys’ years”ALEX FLACH, WHITBREAD
Travelodge set to growPlans for 37 new hotels together worth £135 million have been announced by Travelodge. The company wants to expand in and around the country’s national parks in response to continuing high demand for domestic holidays. Travelodge is seeking 37 suitable sites near the UK’s 15 national parks.
Retail plan approvedCommunities secretary Eric Pickles has given the go-ahead for a £24m expansion of a retail park in Durham, including a hotel.The scheme, owned by ING, will include a supermarket, cinema, restaurants and petrol station at Dalton Park, Murton. The plans were approved by Durham County Council in June but were called in.
Man casino go-aheadThe Isle of Man could be set to welcome its first five-star luxury hotel and casino complex. The island’s government is seeking expressions of interest from contractors interested in the scheme, after a casino licence was granted. Firms with experience of building, owning and managing such developments will be sought.
HOTELS SECTOR NEWS IN BRIEF
London has dominated new hotel starts in 2011 to date, according to fi gures from construction intelligence unit Glenigan.
The capital’s starts, totalling £259m, are worth nearly twice as much as the second-placed North-east. But the North-east has been growing much faster, with the value of its starts in 2011 so far up 490 per cent on a year earlier, having risen a staggering 1,217 per cent in 2010 on the year before.
All the regions saw start values grow in the fi rst nine months of 2011 compared with the same period of 2010, with the exception of Northern Ireland, where there have been no new hotel starts this year worth more than £250,000.
Nationally, things do not look so rosy for the next nine months. Glenigan forecasts the value of hotel starts from Q4 2011 to Q2 2012 to fall compared with the values for the equivalent quarter a year earlier.
But start values are expected to rally strongly in the third quarter of 2012, when they are forecast to be 78 per cent up on the same period in 2011. They are set to continue to strongly outpace values for the equivalent quarters the previous year until March to May 2013, when they are forecast to be just 2 per cent up on the same months of 2012.
The biggest clients this year so far include major hotel names such as the Renaissance Chancery Court Hotel, Whitbread and the Shangri La International.
Top clients also include developers of larger mixed-use schemes such as East End Foods’ project to build a hotel alongside a cash-and-carry.
“Confi dence will hopefully return this year or early in 2012”JOHN DONALDSON, ARORA
Partnership Publishing
Keeping the asset on stream
From new-build hotels to restoration projects and refitting work, specialist fine finishers Plastic Surgeon can help projects complete on time, on budget and to the high level of finish the sector requires.
“It is all about keeping the asset open, as, in a hotel, every room is a revenue stream,” says Plastic Surgeon managing director Rob Mouser. “Using specialist skills, Plastic Surgeon can repair most surfaces to minimise disruption of any work and shorten the time hotels have to be closed for repairs.”
The company recently worked with Ardmore Construction to repair some stonework at the Ramada Jarvis hotel in Hounslow. The stone was damaged and in some areas large chunks were missing. Plastic Surgeon was able to repair the damage and match the colour and texture of the original stonework, with minimal disruption on site and eliminating the need for the entire façade to be replaced.
Timing and quality of finish are not the only areas where Plastic Surgeon’s expertise can help; repairing instead of replacing also lessens waste on projects. “By taking on the damage inevitably caused by occupants, our team works to avoid the need to replace damaged items, thereby reducing the huge volume of material sent to landfill every week,” says Mr Mouser.
Other projects the company has worked on in this sector include the repair of a mural wall in a swimming pool at a the Derwent Hotel in Torquay, repairs to the dining room at Gleneagles Hotel in Scotland and repairs to the masonry for a hotel chain when it rebranded and changed all its signage.
For more information visit www.plastic-surgeon.co.uk or email [email protected]
Produced in collaboration with Plastic Surgeon
Alan Rushbrook, technical services director at the Mandarin, says: “On this job stonework is very important, so is good carpentry and knowledge of IT.”
He says the work must not only look good but be easy to maintain, so when choosing a contractor his team talk to engineers maintaining the contractor’s past developments. Contractors must also be able to work in an operating hotel without upsetting the guests.
There is still some mid-market activity. Arora Hotels is building a four-star hotel at Surrey County Cricket Club’s ground at the Oval and is the preferred partner for one at Ascot racecourse. It also uses its development skills to benefi t from the growth of budget brands, building four hotels on behalf of Premier Inn.
Arora executive director John Donaldson acknowledges the pressures on the mid-market, but thinks there are economic factors which should increase demand in the hospitality sector as a whole, such as softening exchange rates, a growth in ‘staycationing’ and the focus on London in the run-up to the Olympics next year.
“Barring major catastrophes, confi dence will hopefully return this year or early in 2012,” he says.
Some commentators expect current trends in hotels to continue. Mark Farmer, hotel lead at EC Harris, says the luxury end will remain strong. Several luxury hotels have changed hands, including the Sanderson and St Martin’s Lane hotels, bought by Capital Hill Hotels, while the Berkeley brothers have bought the debt of the Maybourne Hotel Group, owners of Claridges.
“The new owners will have spending plans on the horizon,” Mr Farmer says. He expects few new mid-range hotel projects, as they continue to compete on price with budget brands. It appears the middle will remain squeezed for some time yet.
FORECAST HOTEL STARTS ON SITE (£M)
Excludes individual projects of more than £100m and frameworks SOURCE: GLENIGAN
0
50
100
150
200
250
300
350
Q1 13Q4 12Q3 12Q2 12Q1 12Q4 11Q3 11
VALUE OF HOTEL STARTS BY REGION IN 2011 TO DATE
All starts with a construction value of £250,000 or more SOURCE: GLENIGAN
%Yorks & HumberWest MidlandsWales (0.1)South-westSouth-eastScotlandNorthern Ireland (0)North-westNorth-eastLondonEast of EnglandEast Midlands3.7 4.7
30.7
15.78.8
8.4
12.3
3.47.0
5.1
34 | 3 November 2011 www.cnplus.co.uk
Inside Knowledge: Client Briefi ng
3 November 2011 | 35www.cnplus.co.uk
been recommended by a developer that wants to build a hotel to lease to Premier Inn.
Getting in with the developers Premier Inn works with – outfi ts such as Opus Land, Reef Estates, funds Aviva and Pripim, retail
Talk of the squeezed middle rings particularly true in the hotel sector. While the wealthy still have cash to spend on luxury hotels, business and leisure travellers have moved away from the mid-market (three to four-star) and into the budget sector.
Consequently, budget operators have major expansion plans. Travelodge announced in July that it had exchanged on 22 new hotels, while Premier Inn is growing strongly.
At the top end, a number of prestigious hotels have had a makeover, such as the Corinthia London, which was converted back into a hotel after being used as o� ces. Another is the fi ve-star Mandarin Oriental Hyde Park, which is getting a new swimming pool, gym and mocked-up rooms on which to base designs for the rest of the hotel.
Budget sector bucks trendBig growth in value hotels as travellers desert the mid-market
� Alex Flach, construction and repairs and maintenance director, WhitbreadWhitbread, the UK’s largest hotel and restaurant group, owns hotel chain Premier Inn, Costa Coffee and Beefeater Grill. It plans to grow Premier Inn from 46,000 bedrooms to 65,000 across the UK by 2015 and has 11,000 bedrooms in its committed development pipeline.
� Alan Rushbrook, director of technical services, Mandarin Oriental Hyde ParkMandarin Oriental has hotels in Europe, the Americas and Asia and is expanding into the Middle East. Schemes under development include hotels in Beijing, Costa Rica, Abu Dhabi, the Maldives, Grand Cayman, Marbella, Milan, Taipei and Moscow.
� John Donaldson, executive director, Arora HotelsArora Hotels has 14 hotels, including Sofitels at Heathrow and Gatwick airports under franchise from Accor Hospitality. It is building a 190-bed hotel at Surrey Country Cricket Club’s ground at the Oval and is the preferred partner for a new 212-bedroom hotel opposite Ascot racecourse. It is designing and constructing four hotels at Heathrow, Gatwick and Stansted airports in conjunction with Premier Inn, which will open in summer 2012, subject to planning.
� Paul Harvey, managing director, international and development, TravelodgeThe company aims to expand to 1,100 hotels and 100,000 rooms by 2025, the equivalent of opening a new hotel every 10 working days.
� Steve Smith, director of procurement, Accor Hotels UK & IrelandAccor has 4,274 hotels with 513,772 rooms in 90 countries. Its 15 brands include Sofitel, Novotel, Mercure and Ibis. Worldwide, it classifies about half its hotels as economy, nearly a third mid-scale and the rest up-scale.
ROLL CALL: WHO YOU NEED TO KNOW
Whitbread choosy about contractorsINTERVIEW: ALEX FLACHPremier Inn has big plans. The budget chain plans to build 19,000 more bedrooms by 2015 and has a committed pipeline of 11,000 bedrooms. Many contractors want a piece of that pie, but Premier Inn is choosy about who it puts on its tender list.
“We have a select list of contractors, most of which we have worked with for donkeys’ years and some more recent ones,” says Alex Flach, director of construction, repairs and maintenance at Premier Inn’s parent company, Whitbread.
He says the fi rm adds two or three new contractors to its list each year, many of which have
specialist Westfi eld and supermarket Tesco – is a good way to win work with the hotel chain.
“It is a good way of discovering how they [new contractors] operate,” says Mr Flach. “If they work well with us, then we put them on the list for the next one we go out to tender on.”
Contractors that own a site suitable for Premier Inn could get asked to build it.
The fi rm would be interested in talking to contractors with a solid track record in sustainable development – even if not in the hotel sector – and London and the Midlands are areas where it is more di� cult to fi nd good contractors, says Mr Flach.
HOTELSCHLOE STOTHART
TOP 10 HOTEL CLIENTS BY VALUE IN 2011 TO DATE
Company No of projects Value (£m)
Bayscape 1 60
Cardiff Marine Group 1 60
Whitbread 17 45.3
Central Regeneration Limited Partnership 1 44.7
Grosvenor Group 2 43.5
Sellar Property Group 1 40
Shangri-La International 1 40
East End Foods 1 35
Renaissance London Chancery Court Hotel 1 20
Chris Stewart Group 1 20SOURCE: GLENIGAN
“We have a select list of contractors, most of
which we have worked with for donkeys’ years”ALEX FLACH, WHITBREAD
Travelodge set to growPlans for 37 new hotels together worth £135 million have been announced by Travelodge. The company wants to expand in and around the country’s national parks in response to continuing high demand for domestic holidays. Travelodge is seeking 37 suitable sites near the UK’s 15 national parks.
Retail plan approvedCommunities secretary Eric Pickles has given the go-ahead for a £24m expansion of a retail park in Durham, including a hotel.The scheme, owned by ING, will include a supermarket, cinema, restaurants and petrol station at Dalton Park, Murton. The plans were approved by Durham County Council in June but were called in.
Man casino go-aheadThe Isle of Man could be set to welcome its first five-star luxury hotel and casino complex. The island’s government is seeking expressions of interest from contractors interested in the scheme, after a casino licence was granted. Firms with experience of building, owning and managing such developments will be sought.
HOTELS SECTOR NEWS IN BRIEF
London has dominated new hotel starts in 2011 to date, according to fi gures from construction intelligence unit Glenigan.
The capital’s starts, totalling £259m, are worth nearly twice as much as the second-placed North-east. But the North-east has been growing much faster, with the value of its starts in 2011 so far up 490 per cent on a year earlier, having risen a staggering 1,217 per cent in 2010 on the year before.
All the regions saw start values grow in the fi rst nine months of 2011 compared with the same period of 2010, with the exception of Northern Ireland, where there have been no new hotel starts this year worth more than £250,000.
Nationally, things do not look so rosy for the next nine months. Glenigan forecasts the value of hotel starts from Q4 2011 to Q2 2012 to fall compared with the values for the equivalent quarter a year earlier.
But start values are expected to rally strongly in the third quarter of 2012, when they are forecast to be 78 per cent up on the same period in 2011. They are set to continue to strongly outpace values for the equivalent quarters the previous year until March to May 2013, when they are forecast to be just 2 per cent up on the same months of 2012.
The biggest clients this year so far include major hotel names such as the Renaissance Chancery Court Hotel, Whitbread and the Shangri La International.
Top clients also include developers of larger mixed-use schemes such as East End Foods’ project to build a hotel alongside a cash-and-carry.
“Confi dence will hopefully return this year or early in 2012”JOHN DONALDSON, ARORA
Partnership Publishing
Keeping the asset on stream
From new-build hotels to restoration projects and refitting work, specialist fine finishers Plastic Surgeon can help projects complete on time, on budget and to the high level of finish the sector requires.
“It is all about keeping the asset open, as, in a hotel, every room is a revenue stream,” says Plastic Surgeon managing director Rob Mouser. “Using specialist skills, Plastic Surgeon can repair most surfaces to minimise disruption of any work and shorten the time hotels have to be closed for repairs.”
The company recently worked with Ardmore Construction to repair some stonework at the Ramada Jarvis hotel in Hounslow. The stone was damaged and in some areas large chunks were missing. Plastic Surgeon was able to repair the damage and match the colour and texture of the original stonework, with minimal disruption on site and eliminating the need for the entire façade to be replaced.
Timing and quality of finish are not the only areas where Plastic Surgeon’s expertise can help; repairing instead of replacing also lessens waste on projects. “By taking on the damage inevitably caused by occupants, our team works to avoid the need to replace damaged items, thereby reducing the huge volume of material sent to landfill every week,” says Mr Mouser.
Other projects the company has worked on in this sector include the repair of a mural wall in a swimming pool at a the Derwent Hotel in Torquay, repairs to the dining room at Gleneagles Hotel in Scotland and repairs to the masonry for a hotel chain when it rebranded and changed all its signage.
For more information visit www.plastic-surgeon.co.uk or email [email protected]
Produced in collaboration with Plastic Surgeon
Alan Rushbrook, technical services director at the Mandarin, says: “On this job stonework is very important, so is good carpentry and knowledge of IT.”
He says the work must not only look good but be easy to maintain, so when choosing a contractor his team talk to engineers maintaining the contractor’s past developments. Contractors must also be able to work in an operating hotel without upsetting the guests.
There is still some mid-market activity. Arora Hotels is building a four-star hotel at Surrey County Cricket Club’s ground at the Oval and is the preferred partner for one at Ascot racecourse. It also uses its development skills to benefi t from the growth of budget brands, building four hotels on behalf of Premier Inn.
Arora executive director John Donaldson acknowledges the pressures on the mid-market, but thinks there are economic factors which should increase demand in the hospitality sector as a whole, such as softening exchange rates, a growth in ‘staycationing’ and the focus on London in the run-up to the Olympics next year.
“Barring major catastrophes, confi dence will hopefully return this year or early in 2012,” he says.
Some commentators expect current trends in hotels to continue. Mark Farmer, hotel lead at EC Harris, says the luxury end will remain strong. Several luxury hotels have changed hands, including the Sanderson and St Martin’s Lane hotels, bought by Capital Hill Hotels, while the Berkeley brothers have bought the debt of the Maybourne Hotel Group, owners of Claridges.
“The new owners will have spending plans on the horizon,” Mr Farmer says. He expects few new mid-range hotel projects, as they continue to compete on price with budget brands. It appears the middle will remain squeezed for some time yet.
FORECAST HOTEL STARTS ON SITE (£M)
Excludes individual projects of more than £100m and frameworks SOURCE: GLENIGAN
0
50
100
150
200
250
300
350
Q1 13Q4 12Q3 12Q2 12Q1 12Q4 11Q3 11
VALUE OF HOTEL STARTS BY REGION IN 2011 TO DATE
All starts with a construction value of £250,000 or more SOURCE: GLENIGAN
%Yorks & HumberWest MidlandsWales (0.1)South-westSouth-eastScotlandNorthern Ireland (0)North-westNorth-eastLondonEast of EnglandEast Midlands3.7 4.7
30.7
15.78.8
8.4
12.3
3.47.0
5.1
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