By Assured Hotels.
Our latest case study was particularly satisfying given the collective challenges we all face as an industry; it goes to demonstrate what can be achieved with consensus of thinking and strategy between all the stakeholders even in a near stagnant market. We have added this to our Projects Page alongside other recent project outcomes.
Assured Hotels (AH) were approached by an administrator to assist one of their banking clients in the disposal of an aparthotel asset. The business had good scale in number of keys but was in poor condition with compliance issues and had not traded for some months. As the business was in administration the stakeholders were a UK Bank and Insolvency Practitioner – they agreed to our recommendations including to refurbish and trade the asset to maximise value on exit.
The initial scope and our role changed in March 2020 and the onset of the pandemic when we were initially tasked to manage the business at breakeven from essential workers. It soon became apparent that the re-positioning of this asset would need a re-think and different strategy to clear the loan exposure.
After the first national lockdown we offered the apartments with their self-contained kitchen facilities, not only for business and leisure use, but also self-isolation and other uses as a direct consequence of the pandemic. This allowed us to trade continually through from July 2020 to the sale completion in April 2021.
Identifying that sales and distribution strategy early was critical, and we achieved a targeted and broader marketing reach to drive occupancy and protect the daily rate through various initiatives such as:
- Google Pay per click campaigns – focused on key phrases to broadcast the facilities for different uses driving direct conversion at a fraction of the cost of the on-line travel agents (OTA’s).
- Rate strategies set to avoid price discounting, when particularly the local limited-service operators were distributing loss leading room rates.
- SiteMinder booking engine successful in attracting direct booking loyalty, helped reduce over reliance OTA’s and the commissions cost.
- Regular reporting regime established to agreed KPI’s on revenue targets, payroll and operating costs.
Delivered by a strong on-site management team recruited to deliver great customer experience backed by robust Covid compliance to ensure a safe environment and loyalty through many returning customers.
On the capital investment the focus was on delivering a functional contemporary product that worked for the marketplace without incurring costs for design and procurement. A comfortable and stylish fit out from well-established suppliers utilising appropriate commercial products was achieved. This was done taking a floor at a time to assist managing the cash output and was delivered on budget with a high-end look, with the suppliers delivering the design under the stewardship of AH and stakeholders.
Sale completed spring 2021 prior to the end of lockdown, the purchaser is a successful property developer who has diversified for the first time into hotel ownership and operations. Whilst the timing looks challenging just coming out of the pandemic, they have acquired a stable trading asset that has traded well above break even over the last quarter, which will flourish once the marketplace fully reopens building on the base occupancy levels it has maintained through lockdown, with its excellent facilities, evidenced by performance and positive guest feedback.
The key outcome was the lender and previous operator cleared the loan exposure, something that at start of the project looked unlikely, particularly after March 2020 when the Covid impact started to take effect on the market.
For further options linked to asset value recovery and re-positioning strategies please see our dedicated webpage or get in touch to discuss support in any area of hotel & hospitality planning:
e. firstname.lastname@example.org t. 0203 205 7239
or book a no-obligation meeting @ https://meetings.hubspot.com/mgriffin6