Itchy trigger finger

Every results season is gripping in its own way if you are so inclined. The tasty acronyms. The euphemisms for pay rises. The 7am pint of London Pride for those covering Fuller’s. But those results in a pandemic are more gripping than most, as they bring solid(dish) numbers to the delirium of trying to work out what the hell is happening.

This week we kicked off with Pandox, Whitbread, Scandic, PPHE and some light voting at Accor and good solid stuff it was too. As one would expect from two of the sector’s sturdiest owners, Pandox and Whitbread weren’t going to let the early rise spook them. Pandox led on patience being a virtue, with CEO Anders Nissen looking to a summer where there were no rooms left in Brighton, followed by hopes of picking up a few hotels, preferably some of the few anticipated new projects.

Nissen noted what is edging higher up the rankings of industry Things To Notice: what’s getting built now is getting built, but don’t count on anything after that. Limited supply is good for performance and fun to watch the brands flash their ankles at owners over. 

Pandox also included a special guest in the form of STR‘s Robin Rossmann, who forecast that the leisure market this summer would be very much as if “you take a bottle of champagne out of the fridge and leave it out for a whole year in the sun, when you undo the metal wiring the cork is going to fly out and champagne is going to go everywhere”. And happy we were to hear it.

At Whitbread, which has so much cash under the mattress the princess couldn’t find her pea even if MI5 waded in, there was some enthusiasm to be had over the leisure segment, which accounts for 50% of its guests. It was also reassured to be housing many of those building the new hotels, with 50% of its business guests hailing from trade rather than corporate. As to the latter, come back in September, said CEO Alison Brittain. 

Also enjoying a niche this week was Scandic Hotels, which reported the usual this season – yay leisure, yay domestic travel – but threw in its “leading position as a supplier of accommodations for sports groups”. Further detail is being sought. 

While at PPHE it was all hail the return of domestic and international travel, but also a focus on training and reminding staff what hotels were. It won’t be alone.

But it wasn’t just about waiting until September at Whitbread. The company was going to deploy some of its oodles. As it talked about a target of 100,000 rooms in the UK – which it hopes to pillage from the independents – it said that it was planning to be the number one budget hotel brand in Germany, claiming a ‘line of sight’ to a total of 60,000 rooms. 

According to Horwath HTL, the leading domestic brand is Motel One Group, with 50 hotels, while Mercure Hotels is the leading international brand, with 108 hotels (the other Accor brand, Ibis, is third with 85, Ibis Budget next with 84). Whitbread has, including pipeline, 72. Does that ‘line of sight’ include buying Motel One? 

Not so much. And yes, as we recall from last year, Motel One is more complicated than you’d imagine. So what is Whitbread going to do? Spend £350m investment on marketing, refurb and “the enhanced structural opportunities in the UK and Germany”. 

About that trigger finger. The German market is now back, with Union Investment this week has announcing that it had acquired a hotel tower under development in Stuttgart’s Europa district via a forward funding deal. The purchase price was around €137m.

Andreas Löcher, head of Investment Management Hospitality at Union Investment, said: “The hotel investment markets are slowly re-emerging. The pandemic has passed its peak, so now is the perfect time for us to re-enter the market, enabling us to secure a strong position. We are planning to expand our high-quality portfolio of some 80 hotels and are focusing on core products with resilient concepts and operators. In this context, we consider the premium budget segment and apartment hotels to be particularly interesting.”

Premium budget you say? Whitbread has competition. It may need more than £350m, perhaps.

Also suspecting that the trigger finger was itching for some was Accor, which sought to defend itself from unpleasant scenarios by voting in a poison pill at its shareholder meeting. The shareholders passed a resolution to authorise the board to issue free share warrants to shareholders in the event of a public offer, with a maximum issue of 25% of the share capital, with 67.5% voting in favour. Will this be enough to defend the castle?

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