APRIL 2011 |www.opp.org.uk


HEAD OFFICE 17 Heath Road, Twickenham TW1 4AW, UK ✆ +44 (0)20 8734 3960 www.opp.org.uk


EDITORIAL Group editor Geoff Hadwick ✆ +44 (0)208 734 3970 geoff .hadwick@richmondgreengroup.com


INTERNATIONAL PROPERTY REPORTER Amit Katwala ✆ +44 (0)208 734 3973 amit.katwala@richmondgreengroup.com


ADVERTISING David Le Lacheur ✆ +44 (0)208 734 3963 david.lelacheur@richmondgreengroup.com


MARKETING & OPERATIONS MANAGER Naomi Zammit ✆ +44 (0)208 734 3968 naomi.zammit@richmondgreengroup.com


DESIGN & PRODUCTION Martin Lane ✆ +44 (0)208 734 3971 martin.lane@richmondgreengroup.com


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Chief Executive Xavier Wiggins ✆ +44 (0)208 734 3967 xavier.wiggins@richmondgreengroup.com


IN THIS MONTH’S OPP...


Choice leaders OPP Interview (p64) The three men behind Choice Hotels are looking to expand their property portfolio on a massive scale across the UK, France and Germany in the next few years. What sort of property partners are they looking for and what does it mean to run a large hotel development on a franchised basis?


David Regan News analysis (p23) The employment law on retirement in the UK is about to change. Are you sure that your company has all of the right rules in place? Do you want to avoid getting into an HR wrangle?


Margaret Wylde The 55+ market (p30) We all want to avoid costly mistakes and optimise our return on investment in such tough times. So, how do you start, replicate or successfully re- engineer a stalled community?


John Howell Legal column (p32) To take advantage of the recovery, have tight contracts and systems in place to handle complaints. Or would you prefer to spend your hard-earned cash on compensation?


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Please note that the cost of a yearly subscription to OPP is £71.50 (UK), £110.50 (Europe) and £123.50 (rest of the world).


Daniel Kiernan Alternatives (p39) One of the most successful alternative investments in recent years has been fi ne wine. Is wine really an opportunity for you to recommend or is it just the preserve of a few connoisseurs?


Hotels need your help, but be careful


Group editor Geoff Hadwick


nce upon a time, and not that long ago, big hotel groups like JW Marriott liked to build and own the hotels they operated. Hospitality groups around the world thought that it was a good thing to have property assets on the books. It gave them security. Today, it seems, the opposite is the case and physical assets are a risk they don’t want. What they want instead is people like you, the international property industry, to do it all for them. The organisers of last month’s


O


International Hotel Investment Forum in Berlin summed up the mood of their 1,600 industry-leading delegates by saying “the consensus from large hotel companies such as Starwood, Hilton and Accor is that they will be going ‘asset light’ in coming years.” In other words, the global hospitality


wants you, the overseas property industry, to build, run and maintain its physical infrastructure. The hotel bosses of tomorrow are going to be much more about leveraging the brand, franchising, intellectual property rights, service level agreements and overseeing a pre- determined level of experience. And they


want to do it all in properties and resorts funded, built, maintained, managed and refurbished (when necessary) by someone else. So ... the key challenge is how to get inolved and come out with a healthy profit. Our IHIF feaures on pages 46 and 64 both tell the same tale ... it can be done, but be careful.


The thing to avoid is getting carried


away, it seems. Omer Isvan of Servotel Corporation told one of the conference sessions that “too many developers fall in love with an idea. They will often have a vision for something in what they believe is a beautiful setting. But is the concept right? Is the location right? Will people travel there?”


By all means have the vision, but


test your ideas to death. Research every aspect of your plan and stay cool, calm and detached. Hotel development feels like a glamorous thing to get into, but there are many hidden pitfalls. And everyone in the business agrees


that you should not do anything until you have the right brand operator. A good hotel operating brand will persuade the bank to give you the funding, deliver a good occupancy rate and push up yields.


Editor’s letter • Geoff Hadwick ✆ +44 (0)208 734 3970 geoff .hadwick@richmondgreengroup.com | 5


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