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Fri 18th Oct 2019 - Update: Luke Johnson and Elegant, Tortilla, The Alchemist and Easyhotel
Luke Johnson to net circa £12.5m in Elegant Hotels sale: Sector investor Luke Johnson is set to receive around £12.5m after the board of Elegant Hotels, the operator of seven freehold hotels sites in Barbados, accepted a takeover offer from Marriott of 110p a share, a 56.8% premium on the closing price over a recent three-month period. The offer values the company at £100.8m plus net debt of $68.9m. Johnson owns 12.5% of the company’s shares (11.1m shares) – and is one of three directors to give irrevocable undertakings to sell. He is the largest individual shareholder and joined as a non-executive director in 2017. Elegant owns and operates seven luxury freehold hotels and a beachfront restaurant, Daphne’s, on the island of Barbados. Elegant’s portfolio currently comprises 588 rooms, making it twice as large (by room number) as the closest competitor in the Barbados luxury hotel room market. Six of the seven properties are situated along the prestigious west coast of Barbados commonly known as the “Platinum Coast”. The properties are all freehold, with a total aggregate plot size of approximately 23 acres and an aggregate beachfront of approximately 2,600 feet. Commenting on the acquisition, Simon Sherwood, non-executive chairman of Elegant, said: “The board of Elegant Hotels is confident in the group’s long term prospects but believes that this offer represents compelling value for our shareholders and a great opportunity for our employees to be part of one of the world’s leading hotel companies. The fact that Elegant Hotels has attracted the interest of a company of Marriott’s calibre is a resounding endorsement of the outstanding quality of our properties, operations and people, and indeed of Barbados as a highly desirable destination. We are therefore unanimously recommending the offer to our shareholders.” Arne M Sorenson, president and chief executive of Marriott, said: “There is a strong and growing consumer demand for premium and luxury properties in the all-inclusive category. The addition of the Elegant Hotels portfolio will help us further jumpstart our expansion in the all-inclusive space, while providing more choices on the breathtaking island of Barbados for our 133 million Marriott Bonvoy members.”

Tortilla to make transport hub debut after signing SSP agreement: Tortilla, the Quilvest-backed, fast-casual Mexican concept, is to make its transport debut, after signing a development agreement with food travel experts SSP, Propel has learned. The agreement will see the Richard Morris-led Tortilla open its 43rd UK restaurant in London’s Euston Station, with a further four openings planned in key travel hubs next year. Propel understands Tortilla will replace SSP’s own Mi Casa Burritos brand in some locations, including Euston. SSP also operates Mi Casa sites in stations including Waterloo, Victoria and Birmingham New Street. The agreement follows recent openings for Tortilla on Wardour Street in Soho London, Cabot Circus in Bristol, Market Square in Cambridge and Cornmarket Street in Oxford; bringing the group’s total estate to 50 restaurants, including Euston and its sites in the Middle East. In addition, the brand is set to re-open its location in Westfield London as part of the shopping centre’s new food court. The newly refurbished site opens next Monday (21 October) and will feature a new evening menu. On the SSP link up, Morris, managing director of Tortilla, said: “This creates fantastic growth opportunities for Tortilla in some outstanding travel locations around the UK and hopefully further afield. We’re looking forward to seeing Tortilla Euston in action.” Business development director of SSP UK and Ireland, Andy Webb, said: “We’re delighted to have added high-street favourite Tortilla to our list of brand partners. This new unit will be an exciting addition to the food and beverage offer at Euston, and we’re confident they will be well-received by travellers passing through the station as well as those who live and work in the area.”

The Alchemist to make Scottish debut with Edinburgh opening: The Alchemist, the 17-strong Simon Potts-led bar and restaurant concept, is set to make its debut in Scotland next year, after securing a site in Edinburgh, Propel has learned. The company is to take space in Edinburgh St James, the new mixed used scheme in the heart of the Scottish capital, which will feature 850sq ft of retail space, 152 apartments, an Everyman cinema, a W Hotel, restaurants and bars and anchored tenant John Lewis. The Palatine backed firm, which will open a flagship site in Canary Wharf next month, has taken an upper unit flanking the entrance to the development from Princess Street and Waverley train station. The new c6,000 sq ft site will feature a c600 sq ft terrace and have space for c210 covers. It is expect to be open by October 2020. Potts told Propel: “Edinburgh is one of the world’s great cities and a destination we’ve long admired – we wanted to wait for the right opportunity to present itself and the St James’ development fits the bill brilliantly, a vibrant and varied scheme that will appeal to tourists, office workers, residents and shoppers – the same audience that love our established venues in London and Manchester. We’re delighted to have agreed a deal and look forward to getting to work on the design and delivery of the project in the new year.” In July, the company, which recently opened in Gunwharf Quay, Portsmouth, secured a site in Cheltenham’s Brewery Quarter to add to its 2020 pipeline, which will also include an opening in Embassy Gardens, London. It is also understood to be in talks on a site in Bristol. DCL and P-Three are letting agents on Edinburgh St James.

Easyhotel – ‘market challenging, franchise trading subdued’: Super-budget hotel operator and franchisor Easyhotel has reported total system sales rose 28% to £47.8m for the financial year ended 30 September 2019. Owned hotels saw revpar like-for-like up 7.7% whilst franchise like-for-like was down 1.6%. The company stated: “The UK Mid-scale and economy segment of the hotel market has continued to be impacted by the ongoing political and economic uncertainty with revpar down 0.7% for the period, according to STR Global. Although the London market has continued to perform strongly, with revpar growing by 4.5%, the regional UK market’s revpar has remained weak, down some 2.8%, with a number of regions experiencing double digit revpar declines during the calendar year. Whilst the European markets have on the whole continued to outperform the UK, performance has been mixed on a country-by-country basis with revpar growth slowing during the second half of the financial year. Performance across the group’s franchised hotels has marginally improved during the second half of the financial year, despite market weakness in the Netherlands and Germany. Delivering continued market outperformance in challenging trading conditions has required an investment in both price and an increased use of online travel agents (OTAs). The group has maintained a tight control of central costs, in support of delivering its year end targets, but against this more challenging trading environment the board anticipates that group adjusted Ebitda will closer to £4.6m for the year ended 30 September 2019. During the second half of the period the group has successfully refurbished and reopened Easyhotel Old Street (89 rooms) and let the self-contained 15,500 sq ft offices. Easyhotel Milton Keynes (124 rooms) opened earlier than planned and both hotels are trading strongly. On 1 October 2019 the group completed the acquisition of the 87-room Ibis Palais de Congres in Nice, with the hotel opening for trading immediately on completion. Although, the group has experienced planning delays for some of its hotels currently under development, it still expects to open 385 rooms (which includes the 87 rooms for Nice) across four hotels in the next financial year ending 30 September 2020. A further 701 rooms are expected to open in the following financial year. During the period the group opened two franchised hotels, at Zurich (39 rooms) and Amsterdam Schiphol Airport (154 rooms). Malaga (146 rooms) will open in the next financial year. Although the pipeline for franchised hotels is strong, it is unlikely that the hotels in Bur Dubai, Istanbul, Iran or Sri Lanka will open.” Guy Parsons, chief executive of Easyhotel, said: “The hotel markets have remained challenging in the second half of the financial year, particularly in the UK where we are seeing dampened consumer confidence. Whilst our owned hotels have continued to outperform the market, we have not been immune to the weaker regional hotel market and trading across our franchised portfolio has continued to be subdued. Whilst we don’t foresee any improvement to the trading environment in the medium term, we are focused on our strategic priorities and believe the current economic uncertainties will present attractive investment opportunities to continue to expand our development pipeline in our target destinations, underpinning the long-term growth of the brand.”

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