Rooms with a view: Why are so many sports venues ... · are so many sports venues developing hotels? Iconic venues such as Twickenham, the Brit Oval, Lord’s, Cheltenham and Doncaster

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Rooms with a view: Whyare so many sports venuesdeveloping hotels?

Iconic venues such as Twickenham, the Brit Oval, Lord’s, Cheltenham andDoncaster racecourses and Silverstonehave announced plans to develop orare already building hotels and state ofthe art business and conferencefacilities to match their first class sportsfacilities. PricewaterhouseCoopersexamines the scale, rationale andopportunities behind this trend.

Hospitality DirectionsEurope Edition*

Issue 16 September 2007

Issue 16 September 2007 Hospitality Directions – Europe Edition

Hotels are a hot topic at sports venues. As top sportsvenues seek to leverage their assets more effectively, theyare exploring new business opportunities and investing inextensive modernisation and ambitious redevelopmentschemes, many of which include hotels. This could beconsidered a natural development of the business theyoperate. By adding purpose-built state-of-the-artconference and banqueting (“C&B”) and leisure facilities,including integrated hotels on site, venues can developand leverage corporate hospitality sales and conferencebusiness. In addition hotels can enable them to tap intothe growing short breaks leisure market.

PricewaterhouseCoopers’ research shows that hotels atsports venues are a relatively new phenomenon andremain fairly uncommon with around 1,300 rooms open at11 hotels at major sports venues by the end of 2007.However rooms could more than treble in the future withplans for a further 3,500 rooms at 28 hotels across arange of sports venues. If all the planned rooms aredeveloped, then hotel rooms at venues (existing andpipeline) could account for 2 per cent of chain affiliatedrooms in the UK. If we then compare the penetration ofexisting and pipeline hotel development at the main UKsports grounds we see hotel penetration could range from 4 per cent of rugby grounds to 16 per cent ofracecourses.

As sports venues are becoming bigger, better and morediversified so the opportunities to develop hotels in thefuture are likely to increase. This could result in hotels thatare integrated with spectator facilities and the introductionof new lodging products such as extended stay hotelsand new brands such as Hilton Garden Inn. Fordevelopers competing for a scarcity of good sites, sportsvenues could represent an interesting opportunity. Takingracecourses as an example, 16 per cent have stated thatthey are planning or opening hotels. However, this stillleaves 84 per cent of the UK's major racecourses withouthotel plans.

If this niche sector continues to grow there is potential tobring benefits to the hotel market, sports venue and localeconomy, providing the market remains benign and thebusiness model works for both the sports venue and hoteloperator.

In this article we consider the drivers for recentdevelopment, examining why development has been theexception rather than the rule in the past and what hasled to the current spate of development. We then presentthe results of PricewaterhouseCoopers research into thesports venue hotels currently in operation and future plansfor development. We next examine the key

characteristics of the sports venue hotel product and thetypical operating models. We also assess the benefitsand risks to the sports venue and the hotel operator, andthe potential synergies between the two business models.Finally we consider the outlook for this niche sector.

What are sports venue hotels?Sport venue hotels are either integrated into thespectating facilities (e.g. part of the stadium bowl orgrandstand) or on site but separate from the main stadiumor grandstand. • Hotels which are integrated into the spectating facilities

include those at West Ham United Football Club’s (“FC”)Upton Park stadium or the Ricoh Arena, home ofCoventry City FC, where executive boxes convert intobedrooms. These products offer the ultimate ‘room witha view’ and provide a dual use for the executive boxeswhich could otherwise remain unused for most of the year.

• Sports venue hotels on site but not part of thespectating facilities include the Millennium hotel atChelsea FC’s Stamford Bridge stadium. These hotelsare separate facilities but can be integrated into theoperation, for instance they can be used for premiumseat dining on matchdays.

A final category is hotels which are outside the sportsvenue complex, such as the Golden Tulip (Old Trafford)which is situated opposite the Manchester United FC’sstadium. These may benefit from proximity to thestadium but there is no formal arrangement between thevenue and hotel – these are not included in our analysis.Despite being part of the venue itself, most hotels are notoperated by the venue company (usually the sports club);typical operating models are explored later.

Why are venues developinghotels? Key developmentdrivers Chart 1 shows the growth of hotels at key sports venueswith 11 hotels and 1,314 rooms open by the end of 2007.The number of hotels and rooms has grown at an averagerate of 13 per cent per year from the first hotel at BrandsHatch motor racing circuit in 1998 to the 147 roomHoliday Inn Express, which opened at Norwich City'sCarrow Road in summer 2007.

In the early 1990s hotels at sports venues were almostnon-existent and are still comparatively rare. Therefore itis worth considering why development has been limited todate, and what has led to these new openings.

Introduction

Hospitality Directions – Europe Edition Issue 16 September 2007

The most important driver of hotel development has beenthe redevelopment of the sporting venues themselves.Many venues operators have invested in their facilities,partly in response to growing demand and partly to tapinto new revenue streams. The majority of sport venuehotel developments undertaken since the early 1990shave been part of wider venue development, for instanceat Bolton Wanderers FC, Reading FC, Chelsea FC, OxfordUnited FC and Wolverhampton Racecourse.

Table 1 summarises the evolution of sporting venues, fromlimited quality, “sports-only” facilities used for a smallnumber of days a year, to multi-purpose leisure facilities

which are in use even when there is no sporting eventheld. This evolution has made sports venues moresuitable locations for hotels, as they are now saferenvironments, with a wider customer base which attractconsiderable non-matchday activity.

At the same time, the hotel market has seen significantdevelopment in the past decade: • Whilst the market is cyclical, trading performance has

remained resilient in key cities with many performancerecords broken recently.

• Hotel operators have sought to extend their portfolios,particularly in key locations.

5,000

40

35

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25

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5

4,000

3,000

2,000

1,000

6,000Rooms Hotels

1993

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2001

2002

2003

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Rooms Hotels

Existing: 1,314 rooms in 11 hotels

Existing and planned: 4,846 rooms in 39 hotels

Forecast

Source: PwC research, based on estimates of opening dates and hotel sizes. A number of plans do not provide an opening date, these have been included in 2016

Chart 1: UK sports venue hotels - current and future plans

Source: PwC Research 2007

Business model

Customer

Location

Funding

Corporate market

Past

Venues run primarily for sport with little incentive/opportunity toearn revenues from other sources or on non-matchday

Sporting venues primarily the preserve of traditional male fansSome perceived safety/hooligan problems, particularly forfootball

Many venues were land locked with little or no available spacefor development of ancillary facilities

Team performance has been the focus of investment and themain source of revenues

Limited corproate facilities due to constraints of venue, qualityof facilities/food limited in many cases and customers come forthe sport only

Current

Diversification of business model, to reduce reliance on sportingsuccess, sweat the venue asset and attract new customers

Sports venues are now safer environments and attract abroader customer base: families, women, wealthier customersand more corporate customers (see below)

Venue redevelopment (on existing sites or new sites) hasunlocked space for development of additional facilities

Additional facilities needed to cross fund venue development inmany cases, e.g. higher proportion of corporate facilities, orrental from ancillary facilities as a secure revenue stream

Corporate facilities are a key part of all sports venuedevelopment - for both matchday entertaining and nonmatchday activities (conference and banqueting)Improved facilities enable venues to compete on a level footingwith top local venues, rather than relying purely on sport

Table 1: The evolution of sports venues


• A lack of available sites and competition for secondarysites has caused developers and operators to seek outnew locations, including sports venues.

• Interest has grown in non-standard hotel products, suchas boutique hotels, and sporting venues offer anunusual angle to an overnight stay. We note that thehotel named ‘71 Rooms’ at the Ricoh Arena in Coventryis marketed as a ‘boutique’ hotel, although it isunbranded. However most sports venue hotels arebranded, which suggests that a brand is beneficial, asdiscussed later.

• The conference and banqueting market is an importantcomponent of any hotel’s operating model, this hasparticular synergies with the sports venue market as weexplore later.

Future development plans couldresult in a trebling of hotelrooms at sports venues by 2016Our research suggests that clubs and venues plan to addat least 28 further hotels with approximately 3,500 roomsin the pipeline. These are to be developed at a widevariety of venues including at racecourses, cricket clubs,and rugby grounds as well as at more football stadium. Ifachieved this would represent almost a trebling of the

existing rooms’ total, equating to around 15 per centgrowth p.a. in both hotels and rooms (see Chart 1).1

Despite this growth, sports venue hotels remain theexception at most sports venues. This is illustrated byour analysis of the proportion of venues with hotels.

If all the planned rooms are developed, hotel rooms(existing and planned) at venues could account for 2 percent of chain affiliated rooms in the UK.

If we compare the penetration levels of existing andpipeline hotel development at key sports grounds we seehotel penetration could reach 4 per cent of rugbygrounds, 7 per cent of major motor racing circuits, 8 percent of key football stadia, 10 per cent of cricket grounds,and 16 per cent of UK racecourses (see Chart 2).Although penetration levels vary, there remains a clearmajority of clubs and courses without hotel developmentsand this may represent an opportunity for futuredevelopment.

Research analysis by sportHotel development differs according to the four sportsanalysed, as we discuss below.

Football: • Football has seen the most activity to date, with eight

hotels in seven venues (two at Chelsea FC’s StamfordBridge) and 990 rooms already open.

• There are plans for a further 12 hotels and 1,412 roomsin the pipeline.

• Some interesting development is planned in the future asclubs evaluate future options for funding new stadiumand leisure developments. Schemes include a widerange of facilities such as student housing, retail, indoorfitness facilities, spas, restaurants and bars, and even asnowdome as is the case in the plans for DarlingtonFC’s stadium (named ‘96.6 TFM Darlington Arena’).

Racecourses: • Wolverhampton Racecourse was one of the first major

sports venue in the UK to develop a hotel in 1993 andthis 116 room property remains the only majorracecourse hotel open in 2007.

• However racecourses continue to see a high level ofactivity as operators such as Arena Leisure and JockeyClub Racecourses pursue new revenue streams such as24 hour conferences and external events. Northern

16% 10% 4%7%

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VenuesWith hotels Without hotels

Football Racecourses Cricket Rugby Motor racing

8%

Estimate of current and planned hotels at sports venues, based on PwCresearch and interviews with operators. The total major UK sportsvenues include the key venues for each sport, as detailed in thefootnotes i.e. league club stadia for football and rugby, test and countygrounds for cricket, major flat and jump racecourses in the UK andmajor motor racing circuits2.

Chart 2: Key sports venues with hotels by 2016

1 Our research was undertaken in June 2007 and provides a snapshot of the main developments at that time based on the best of our knowledge but is not a census of all such developments.Some hotels may not open at all or may open more or fewer rooms. We have included only hotels that are integrated within the stand or at least inside the venue grounds. Some developmentplan announcements in the press have limited detail and we have made a number of assumptions to allow an analysis of future pipeline developments (e.g. we have assumed 100 rooms forhotels where the size is not specified; we have also assumed an opening date of 2016 where there is no timescale indicated). This analysis excludes plans for golf courses; for instance weunderstand that there are plans to add a hotel at Wentworth Golf Club – this is not included in the 28 planned hotels above

2 Major venues totals sourced from sports bodies and reference sources, such as ECB, www.BritishHorseracing.com, www.worldstadiums.com etc., July 2007NB Penetration rates vary depending on total used e.g. for football we use the total of 230 clubs including English non-league teams (i.e. the Conference); the implied penetration would behigher if we used the smaller sample of English League Club

Racing is considered likely to pursue a similar strategyfollowing its recent takeover.

• A number of courses have seen investment in allweather tracks and evening racing is likely to extend thenumber of fixtures.

• A 120 room hotel is due to open at DoncasterRacecourse in 2008. Pipeline plans exist for 9 hotelsand approximately 1,089 rooms, including an extensionto the Holiday Inn Garden Court Hotel at Wolverhampton.

Cricket:• The only key cricket venue with a hotel currently open is

the Old Trafford Lodge, an unbranded hotel located atLancashire County Cricket Club’s Old Trafford home.

• There are two firm pipeline developments with plans fora total of 345 rooms. These are both for four starintegrated hotels with spectator facilities, at the RoseBowl, Southampton (home to Hampshire Cricket) andthe Brit Oval in London (home to Surrey Cricket Club).

• In addition Kent County Cricket Club has been grantedplanning permission for the redevelopment of the StLawrence Ground in Canterbury. The plans comprise anupgrade for spectating facilities, together with thedevelopment of a hotel, housing, health and fitness andconferencing facilities. The 130 bedroom hotel will beoperated by Rezidor/Radisson, under the Park Inn brand.

• Lord’s (home to Marylebone Cricket Club, MiddlesexCounty Cricket Club, and the England and WalesCricket Board) has also announced its intention topursue redevelopment plans which include theconstruction of an ice rink and hotel.

• If we assume the hotel at Lord’s will have around 100rooms this would bring the planned total to 575 roomsin 4 hotels.

At the Rose Bowl in Southampton (home of HampshireCounty Cricket), Glen Delve Managing Director has saidthat:

“The resort hotel will be a tri-purpose hotel that willaccommodate not only the hotel business but amedia centre and spectator facilities, built in itsentirety overlooking the playing surface”. Glen Delve MD Rose Bowl

• As large and smaller grounds continue to bid for theright to stage international cricket this is likely to forcemore grounds to develop bigger and better facilities inthe future, including hotels and associated leisuredevelopments.

Rugby: • The only major rugby venue with a hotel on site is the

Madejski Stadium which is shared by Reading FC andLondon Irish Rugby Union club.

• Two hotels and approximately 356 rooms are planned:the 156 room Marriott Hotel at the Twickenham, homeof England Rugby (scheduled to open in October 2008)and an integrated 200 bedroom hotel at Salford CityReds proposed new stadium.

Motor racing: • Brands Hatch was the first major motor racing circuit to

open a hotel, developing a 140 room property locatedon the parkland of the Grand Prix circuit in 1988. Thehotel was developed by the Brands Hatch LeisureCompany, but was acquired by Thistle Hotels in 1988.

• The owner of Silverstone, the British Racing DriversClub, has announced plans to develop the track andsurrounds. A hotel is mentioned but no details haveemerged yet.

Soon more sports venues will have their own hotels



Sports venue hotel operatingmodels: Management contractsprove most popular Hotels at sports venues tend to be either four star orlimited service products including Millennium & Copthorne,Holiday Inn Express, De Vere, Marriott and Quality.

Most hotels are branded giving the venue the opportunityto leverage the power of the hotel brand and access to awell established distribution system. In most cases thesporting venue brand appears to be of less important thanthe hotel brand, for instance the hotels at Chelsea FC’sStamford Bridge are marketed for their proximity to theChelsea shopping district and convenience for taking in thesights of London. This suggests that the sporting event isof secondary importance to the location and that operatorshave minimal reliance on match or race days alone tosustain healthy year round occupancies and room rates.

Most hotels are not operated by the venue company (usuallythe sports club), suggesting that venue operators prefer tostick to their core business. However there are a numberof operating models - typical operating models include:3

• In-house – the stadium company develops andoperates the hotel in house e.g. Old Trafford Lodge(cricket ground). We note that the hotels at Chelsea FC

were formerly managed in house prior to being operatedby Millennium & Copthorne.

• Franchise – the stadium company owns and operatesthe hotel making a payment to the hotel company forthe brand name under a franchise arrangement e.g.West Ham United's Upton Park (Choice Hotels); OxfordUnited's Kassam Stadium (Express by Holiday Inn).

• Management contract – the stadium company owns thehotel which is operated by a hotel company, whichtypically receives a percentage of revenue and operatingprofit e.g. Coventry City's Ricoh Arena (All Leisure);Madejski Stadium; Reading (Millennium & Copthorne);Chelsea FC's Stamford Bridge (Millennium & Copthorne);Bolton Wanderers' Reebok Stadium (De Vere).

• Leasehold - Stadium/property company owns theproperty but leases it to a hotel operating company e.g.Jury's Croke Park Hotel (Gaelic Athletic Association).

Risks and rewards ofdeveloping hotels at sportsvenuesThere are clear synergies between sports venue and hotelbusinesses which can be exploited to the benefit of bothparties. These potential benefits and risks are summarisedin Table 2 and the key themes are explored in more detailbelow.

Source: PwC Research 2007

Corporatebusiness

Demand

Operationaladvantages

Revenues

Brand

Regeneration

Matchdays

Operational

Stadium Hotel

Extension of corporate hospitality business at sports venues,enabling venue to compete for residential conferences

Hotel can draw on the venue's existing corporate hospitality andconference and banqueting market

Additional footfall in and around stadium site Opportunities to drive hotel brand exposure to large audiences andaccess to existing customer base of the stadium/sports club

In many cases the hotel operator takes on the operation of all hospitality, allowing each party to focus on what they do best

Source of additional revenues through rent, profit share orcontribution to capital development

Revenue benefits (e.g. management contract fees). Also if hotel isdeveloped by the sports venue, this can be an inexpensive way toenter a market (if the sports venue invests in the facility, obtainsplanning permission etc)

Affiliation with a strong hotel brand can enhance venue's position,especially in the corporate market

Hotels can benefit from renown of the sporting venue, although thelocation appears to be a more significant benefit for operators

Many hotel at sports venues are part of wider regeneration schemes, which can attract external funding and create a critical mass of activityaround the site, with complementary facilities (e.g. health club, retail, residential, commercial units)

If the venue is designed with the needs of the hotel before theneeds of fans/box holders there is a risk that the atmosphere andsporting feel will be diminished

Potential or perceived congestion on matchdays may causeoperational difficulties and deter hotel guests (e.g. car parking,evening matches, crowd management)

If operating arrangements and risk allocation are not thought through there is a risk that the hotel and venue can compete (e.g. for c&b business), or that the venue will bear the responsibility (and costs) of operating the hotel and generating demand

Table 2: The potential risks and rewards for venues and hotel operators

3 Examples of operating models sourced from websites, news searches and press releases

Rew

ard

sR

isks


RewardsThe potential rewards can be gained from exploiting thesynergies between the hotel and venue operation, themost significant of which centre on sweating the venueasset, developing corporate revenues and tapping intonew markets, such as leisure breaks.

Making assets work harder Sports venue operators have had to raise their gamesignificantly in recent years. Competition is keen andattracting and participating in world class events andkeeping ahead of the competitive global game meansinvesting in world class facilities, such as the DubaiSports City currently under development.

Many sport venues seek to finance ambitiousmodernisation schemes which often include largerstadium and grandstands. Once complete, many of thesenew facilities are a step change away from their oldfacilities allowing them to compete with the top venues inthe local market • Rugby’s historic venue at Twickenham in south-west

London is currently undergoing a major redevelopment.When complete the South Stand will house a four starMarriott Hotel, a Virgin health club, new conferencefacilities and a performing arts centre for local residents.

“Twickenham will become a destination in its ownright with something going on all year round. We arenot short of car parking, we are only six miles fromHeathrow and fairly close to the centre of London.There will be a surge of economic activity for thelocal area”Paul Vaughan, Rugby Football Union Business Operations Director

• Sheffield United FC’s Bramall Lane is planned to betransformed into a sport, property and leisure servicesorganisations and their plans include a 149 bedroomhotel.

Sheffield United …. The Venue that offers more“Over the last 6 years ……the football clubhas….transformed Sheffield United Plc into a fullyintegrated football, property and leisure servicesgroup, which is maximising the commercialdevelopment of its property assets”4

The corporate marketThe key benefits to be gained from the corporate marketare based on developing the sports venue’s competitiveposition as a key provider of corporate facilities andservices in the local market, and tapping into thecorporate customer base of the sports venue, such assponsors, premium seat holders and C&B customers.

Many sports venues are already major players in theirlocal conference and banqueting market and some havebecome serious contenders in the local market, replacingthe ‘pie and a pint’ perception with a quality offer, usingsignature chefs. Sports venues have the benefit of carparking, large, flexible spaces and staff capable ofcatering for high volumes of customers. Venues also seekto gain C&B business from matchday customers who areimpressed by the quality of entertainment on matchday.The addition of hotel bedrooms can enhance the venue’sC&B offer through:• Drawing on the operating expertise/efficiencies of the

hotel operation.• Allowing the venue to move into the residential events

market.• Capturing the benefits of the hotel brand.

Andrew Coppel, Chief Executive of Jockey ClubRacecourses, stresses that developing hotels is not aboutdiversifying their current business, but rather embarkingon a new activity. A key strategic aim of Jockey ClubRacecourses to service the lucrative 24-hour conferencemarket means that a hotel on site is essential. JockeyClub Racecourses have already announced plans forhotels at Cheltenham, Sandown Park, Epsom, Huntingdonand Warwick.

Case study: The shape of things to come? Dubai Sports City Dubai Sports City is an example of an integratedsports, commercial and leisure development and aimsto set the ‘gold standard’ for sporting facilities Its firstelement, the Dunes golf course opens this year; theentire development is set for completion in 2010. It willthen span 50 million square feet and incorporateworld-class sporting venues for hockey, cricket, rugby,and sports academies such as the Manchester UnitedSoccer School as well as residential and commercialproperty development, a boutique and a 33 floor1,000 room hotel.

4 Extract from website, 2007


“For all venues developing the right product isessential. Customer focus and a competitive offeringis key” Andrew Coppel Chief Executive Jockey Club Racecourses,

May 2007

As a business destination the venue has the potential todeliver all-year revenues, not just in the ‘season’ or onmatch/race days and may allow higher packaged sales,such as experience days, banqueting, exhibitions,meetings and conferences. The ability to offer full serviceconference and business options allow a venue tomaximise asset use between corporate and leisuremarkets.

At Jockey Club Racecourses racing only takes place foraround 10 per cent of the year. Accordingly Jockey Clubracecourses have developed a new agency, Pegasus, asa one stop booking service to maximise revenue from theconference and events sector for the rest of the year (seebox out).

Short breaks Successfully attracting guests in a competitivemarketplace is a key objective for attractions, venues andthe hotels themselves. Sea changes in consumerbehaviour continue to drive new leisure and entertainmenttrends, with more emphasis on individualism andexperiential based leisure activities, such as short breaks.By developing meetings and conference rooms, hotelsand health clubs, a venue can create an end-destination,for leisure visitors and also the events and meetingsmarket.

In addition, the top ten niche travel markets tipped forgrowth over the next five years include sports tourism,both following teams and playing sport. For sports fansthere is the attraction of staying at a famous sportinglocation. Surinder Arora, Chairman of Arora International,the company developing a 4-star hotel at the Brit Oval,speaks for many cricket fans below:

“Can you imagine anything better than a room with a view at the Brit Oval?” Surinder Arora, Chairman

Arora International5

RisksNevertheless, the economics of operating a hotel do notchange just because it happens to be located at a famousvenue:

• Location is paramount to growing and maintainingdemand and there is no substitute for strong corporatedemand throughout the week.

• There can be design and operating challengesassociated with these products, particularly for hotelsthat use matchday boxes as hotel bedrooms includingthe need for a quick conversion necessary on matchdays. There can be conflicts between the requirementsof the box holder and the hotel business. For instancemany box holders expect to be able to personalise thebox or have access on non-matchdays for meetings etc.This would cause problems with the operation of thebox as a hotel room.

• In addition a stadium hotel needs to be manageddifferently from a non-stadium/venue hotel:– Millennium & Copthorne Hotels stress the need to

manage hotels at venues carefully. One way of doingthis is to keep a sport free area for corporate andconference guests; for example guests at theMillennium Madejski Hotel Reading can use the topfloor club lounge as a ‘haven of peace’ on match days(see box out overpage).

– Fixture changes, for example for television or replayscould impact on availability of hotel or conference

5 Caterer, 18 January 2007

Jockey Club Racecourses

A racing brand developing the commercial potentialof its racecourses

• Re-branded January 2007.

• 14 famous racecourses such as Cheltenham andAintree.

• Recognised the opportunity to expand the brand forthe 90 per cent of the year when there is no racing.

• Hotels for Cheltenham, Epsom, Sandown Park andlooking at other sites.

• Pegasus Venues set up in 2006 as a onestop- shopbooking service for all 14 courses.

“To establish our racecourses as venues of choicein the UK conference and events market”Andrew Coppel, Chief Executive

space which is used on a matchday, such ascorporate boxes that double up as hotel rooms, orlounge areas that are used for events. The venueeither has to keep any potential dates clear (denyingbusiness), or allow them to be booked and thencancel them, which could impact on customersatisfaction, particularly for big events such asweddings and conferences.

• Finally for investors and operators: the cyclical nature ofthe hotel sector means that some of the pipeline hotelsare likely to be opening when trading conditionsbecome more challenging and significant supply comeson line elsewhere in the UK.

The outlookLooking forward:

• Sports venues could soon see new brands andconcepts at such as extended stay hotels and HiltonGarden Inn, the developers of which are in talks withsome venues.

• The opportunity for hotel operators is to gain brandexposure and management fees and for venues todevelop their revenues from corporate customers.

• The main demand segment is likely to continue to becorporate and conference guests rather than sports fans.

• Location remains critical to operational success andsports-led regeneration schemes have potential to offerthe best fit for hotel development in terms of footfallaround the sports venue and complementary facilities todrive demand.

Developing hotels at sports venues is likely to remain aniche, but as sports venues become bigger, better andmore diversified there may be more opportunities todevelop hotels driven by the ever pressing need forsporting venues to up their game, to raise capital andeffectively utilise assets and modernise their businesses.

Conference organisers and consumers alike are looking forsomething different. If the venues can get their productright there is evidence that they can enhance their coreoffering with a successful conference and events business.Although it is clear that a small hotel is not going totransform a venue’s balance sheet, nevertheless it can forma key part of a wider strategy to capitalise on leveragingcorporate hospitality, conference and events income. Thisin turn can enhance the whole destination experience andcontribute to a critical mass of activity on the venue site.

Millennium & Copthorne Hotels

A hotel brand set to manage more hotels at venues

Advice from David Curtis-Brignell, Millennium &Copthorne Director of Branding and Marketing Europe:

• These are exciting times for hotels at stadium andracecourses but... the hotel must work as a businessproposition.

• Location is key – close to business demand and withgood accessibility.

• The operator must not be overawed by the famouslocation.

• Advice for venues: Don’t try and manage the hotelyourself - stick to what you do best.


New Club room at the Millennium Hotel at Chelsea Football Club


In developing the operating arrangement between thesports venue and hotel operator it is critical to allocateresponsibilities and risks to the parties best able tomanage these. Developing sustainable business modelswill enable both parties to focus on their areas ofexpertise, to minimise operating risks and maximise thepotential benefits of a hotel development.

Thanks to the following contributors: Andrew CoppelChief Executive Jockey Club Racecourseswww.jockeyclubracecourses.com

David Curtis-BrignellDirector of Franchising, Branding and Regional Marketing for Europe, Millennium & Copthornewww.millenniumhotels.co.uk

David BridgfordDirector of Corporate Finance Merlin Entertainments www.merlinentertainments.biz

6 For more analysis of this sector see ‘European theme park wars, PricewaterhouseCoopers Hospitality Directions Europe, March 2004’7 Merlin Entertainments own nine theme parks Alton Towers, Thorpe Park, four LEGOLAND parks, Chessington World of Adventure, Gardaland and Hiede Park as well as brands such as the

British Airways London Eye, six Madame Tussaud’s wax museums, 23 Sea Life centres, five Dungeons and the LEGOLAND Discovery Centre attraction

Lessons to learn from MerlinEntertainments?

The availability of extensive under-utilised assets in theguise of undeveloped land banks has led todevelopment of ancillary facilities in many sectors. Justas in the 1980’s when the large UK brewers developedbudget hotels on their estates, today many venues arekeen to use their sites effectively. The theme parkexperience holds some interesting parallels for thesports venues market in this regard.6

Theme park and attractions operator, MerlinEntertainments plan to have around 10 hotels and2,000 rooms (across Europe) by 2012.7 MerlinEntertainment’s Chief Executive Nick Varney providedsome insights into why he believes developing hotelsat destination theme parks is the way forward. “Merlin’s aim is to provide families with greatentertainment experiences. Destination resortsenhance the experience for existing guests and makeour attractions available to a wider catchment area.” David Bridgford, Director of Corporate Finance, Merlin EntertainmentsJune 2007

Merlin Entertainments believes that in developmentterms the risk profile of developing hotels may be lessthan some other schemes. “The risk profile ofdeveloping on land we own next to businesses weoperate is better than for green field development innew countries or opening up new businesses. Wehave significant land holdings at all our theme parks” David Bridgford, Director of Corporate Finance, Merlin EntertainmentsJune 2007


Julie ClarkHead of Leisure+44 (0) 207 213 [email protected]

Liz HallHead of Research – Hospitality & Leisureand Editor Hospitality Directions +44(0) 20 7213 [email protected]

Contacts:To discuss any of the issues in this article, please contact:

For further hospitality & leisure research and news visit www.pwc.com/hospitalitydirections

Important NoticeThis publication includes information obtained or derived from a variety of publicly available sources. PricewaterhouseCoopers LLP(“PricewaterhouseCoopers”) has not sought to establish the reliability of these sources or verified such information. PricewaterhouseCoopers doesnot give any representation or warranty of any kind (whether express or implied) as to the accuracy or completeness of this publication. Thepublication is for general guidance only and does not constitute investment or any other advice. Accordingly, it is not intended to form the basis ofany investment decisions and does not absolve any third party from conducting its own due diligence in order to verify its contents. Before makingany decision or taking any action you should consult a professional advisor.PricewaterhouseCoopers accepts no duty of care to any person for the preparation of this publication, nor will recipients of the publication betreated as clients of PricewaterhouseCoopers by virtue of their receiving the publication. Accordingly, regardless of the form of action, whether incontract, tort or otherwise, and to the extent permitted by applicable law, PricewaterhouseCoopers accepts no liability of any kind and declines allresponsibility for the consequences of any person acting or refraining to act in reliance on this publication or for any decisions made or not madewhich are based upon the publication.© 2007 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP (a limited liabilitypartnership in the United Kingdom) or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each ofwhich is a separate and independent legal entity. Ref 2003LDS20645/NW

Documents

Rooms with a view: Why are so many sports venues ... · are so many sports venues developing hotels? Iconic venues such as Twickenham, the Brit Oval, Lord’s, Cheltenham and Doncaster