Sleeper March/April 2009
Head Office
Hotel Analyst www.hotelanalyst.co.uk
UK hotel values outperform other property
Hotel property values in 2008 held up better than wider commercial property according to Christie & Co
Hotel property values dropped 18.4% The last major UK recession of the Leasehold businesses were currently The IPD figures, which include offices,
during 2008 according to figures from 1990s saw hotel values continue to fall for being bought for between one and two retail and industrial (but not hotels)
Christie & Co, an outperformance two years and, although circumstances times net profit. Day said buyers were showed that since the turn of the cycle in
compared to the wider commercial are different, “there is no reason to believe looking to acquire businesses as they July 2007, UK commercial property had
property sector which dropped 27.1% they won’t do the same”, said Day. offered higher returns than almost dropped in value by an average of 35.5%.
on figures from Investment Property Predicting how much more values anywhere else but he warned values While hotels held up better than
Databank. would fall was harder, admitted Day. would reflect the more cautious approach wider commercial property they were
Part of the explanation lay with the In the (very unlikely) event that trading of lower leveraged investors. harder hit than the four other segments
way commercial property yields had holds up then there may not be further In terms of deal flow, disaggregation on which Christie & Co compile figures.
dropped below 4% while hotels (with drops. A small crumb of comfort comes would be the name of the game, predicted Pubs were down 11.6%, restaurants down
the odd exception) had stayed above 5%, from the help being offered to small Day, with hotel portfolios broken up into 14.9%, care homes down 16.9% and retail
said Chris Day, International Managing businesses by the UK government. But smaller lots so that they could be more (which is largely convenience stores) was
Director of Christie & Co. there would be value opportunities. easily sold. down 6.5%.
Tourism still tail-end charlie
Tourism industry needs to do a better job of representing itself to governments, nationally and internationally
The £2.5bn handout for the UK car employed in distribution, hotels and UK when agriculture received substantial create wealth and jobs.
industry - there are similar and in many restaurants (a classification that includes government handouts but tourism, which The Tourism Alliance, a lobby group
cases more generous packages for auto retail). employs twice as many people in the rural which was established by the government
manufacturers around the world - shows Just over 80% of all jobs in the UK are locations impacted, received nothing. and represents about 200,000 tourism
once again that governments listen to the services related. And given that services The farmers were able to present a businesses, reckons tourism is the sixth
loudest voices rather than acting in the now account for 75% of the UK’s wealth strong case but the disparate tourism largest industry in Britain, generating
best interests of their countries. creation, a bias towards manufacturing industry failed to win over public £85bn a year and directly employing 2.2
And it shows that travel and tourism seems very odd indeed. sympathy. million people. Tourism generates £15bn
remains at the back of the queue when it The UK economy has shifted more Not that there should be a clamour for per year making it the third biggest
comes to influencing key policy decisions. towards services than any other European state subsidy from travel and tourism - it export earner.
For the UK there is the added insult economy. As Otus & Co have written in does not need it - but it should be given There is no doubt that one reason
of budgets being slashed for tourism the pages of the print version of Hotel a fair share of promotional budgets. And why tourism does not enjoy a fair share
promotion at the same time. Analyst (see Volume One, Issue 7), the this is particularly the case given the of government largesse is its fragmented
While the UK handout to car makers UK is the only “experience economy” in attraction of visiting the UK thanks to the nature. This is due to the owner-operator
is not as extensive as for many European Europe. Its government should be at the massive devaluation of the pound. nature of most of the businesses and the
countries, notably Germany and France, forefront of promoting services-friendly And it is here that there is a real kick in diverse nature of these businesses, the
it is all the more surprising as there are policies. the teeth for the UK hospitality industry. latter point is reflected in the fact that
no British-owned car makers of scale. Lord Mandelson, the Business On top of cutting the already meagre the Tourism Alliance itself has 50 trade
But it is astonishing that manufacturing Secretary, inadvertently highlighted the tourism budget by 18% it was revealed in bodies associated with it.
is once again taking precedence over the challenge facing tourism lobbyists with late January that there is to be no one-off In a statement issued 28 January,
more important - in both wealth creation the line during the announcement of boost to expenditure to exploit the 2012 Cotton said: “Other industries are being
and jobs terms - services sector. government aid to car makers: “We need Olympics being held in London. bailed-out with massive financial support
Using figures from government less financial engineering and more real Bob Cotton, Chief Executive of the yet tourism is being ignored.”
funded agency National Statistics makes engineering.” Somehow, “real services” British Hospitality Association and The tourism industry needs to do
this clear. At September 2008, there just does not have the same ring to it. Chairman of the Tourism Alliance, said a better job of representing itself to
were 3.1 million people employed in The current situation is a louder echo it highlighted the lack of understanding governments both nationally and
manufacturing industries but 7.0 million of the 2001 foot and mouth debacle in the by government of tourism’s potential to internationally.
102
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132  |  Page 133  |  Page 134  |  Page 135  |  Page 136  |  Page 137  |  Page 138  |  Page 139  |  Page 140