common areas, including the Arne Jacobsen egg chair, and Castiglioni’s Arco lamp, reminding guests that budget does not have to lack style. Motel One was established
in 2000 in Munich, within the Astron Hotels group. The Astron brand and portfolio of 54 hotels was sold to Spanish hotelier NH in 2002, allowing management to focus on growing and developing the Motel One brand. In 2007, a Morgan Stanley
investment fund took a minority stake in the business. The following year, it grew to 3,000 rooms open and received the first of three annual “Most Wanted Investment Partner” awards from hospitality consultancy Treugast. In 2011, the company reported
turnover up 48% to EUR134.8m, as it grew its portfolio from 31 to 38 hotels. The group achieved an average occupancy of 70%, and declared pre-tax profits of EUR23.4m. With openings in Salzburg and Vienna, the company also took its first steps outside Germany. Last month, the company announced plans to build its largest hotel yet, an 18 floor, 530 room block adjacent to Vienna’s central station, that will be the fourth Motel One to open in the city.
This year, there will be four
more hotels opened, as the company presses towards a target of 60 hotels and 14,000 rooms by 2014. The 208 room Edinburgh hotel, scheduled for a December opening, will be in a converted historic building in Market Street in the city centre, previously occupied by the council. Rooms in Edinburgh will start from GBP69 a night, while in some European locations Motel One rack rates start at EUR49. The UK confirmed pipeline extends
to 1,500 rooms with a second Edinburgh site at Princes Street; central London hotels at the Minories and Commercial Road; at Piccadilly in Manchester and High Bridge in Newcastle. A London office has been established to focus on growing the portfolio fast.
Dieter Muller, CEO of Motel
One, recently commented: “We see as much if not more potential in London for our brand as in Berlin, where we have eight hotels, with over 2,000 rooms. Our product is young and stylish and focuses on three qualities, namely excellent location, affordable prices and high quality design and service. We are convinced Motel One will be popular with guests in the UK.” Similar to the flexibility in
design is Motel One’s approach to new sites. The company mixes leases with owned and forward funded developments; and works with both new sites and conversions of older buildings, in a bid to get what it wants, where it wants it, fast. “For us, it’s all about getting the
best sites and delivering quality,” explained Motel One’s Deputy Head of Legal Stefan Lenze. By being flexible, “you find it easier to get the sites you want. We put a strong emphasis on design and quality – leasing or owning gives us a much better control over our mix. There remains strong competition for city centre sites, so we do whatever works – and it must look good.” Asked to compare Motel One
with rivals, Lenze struggles. Price “That’s not how we look at things. We have a product that works really well in Germany – we’re convinced it will work here. The UK is an obvious choice, as it’s a very strong market. And people are design conscious, so it will
play into our favour.” Motel One is well funded, with
bank lending in place to support the expansion. Gearing is creeping up, from 36.5% in 2007 to 41.2% in 2011, but for now there are no plans to change the mixed portfolio strategy. Property could be sold in the long term, “and if it’s helpful to our development, we could look at sale and leaseback.” Motel One now has a dedicated
team in the UK scouring the country for suitable locations in a property market the company insists is still highly competitive. “We’re very quick in reacting,” Lenze promises, “and able to agree a deal in just a few weeks, on the right opportunity.” But asked whether any
Travelodge disposals will provide a quick route into the UK market, Lenze suggested these are unlikely to be in Motel One’s preferred central locations. The company seems unfazed by potential competition. “Yes, there are competitors out there in the budget sector,” said Lenze. “I’m not saying the others are doing a bad job, it’s just that Motel One believes it has created a niche all to itself – and it’s coloured turquoise.”
HA Perspective: Given what has happened to Travelodge it is a brave company to come to the UK with a leased model. But even though they will be warier about covenant, landlords are still likely to be seduced by the superficial security of signing a fixed lease. This will no doubt give Motel
One a significant advantage as it seeks out sites given that just about all other hotel players are ruling out leases. Leases also have a superficial
appeal to the operator – Motel One in this case – as they facilitate expansion without huge capital
commitments. The problem, as Travelodge discovered, is that you end up renting out the entire business to your landlords. Given where we are in the
business cycle, it perhaps makes sense to sign up leases in the next few years on favourable terms. But when Motel One’s backers seek an exit, a leased estate is going to hamper the options.
Slotting
concerns Changes in the way property lending is regulated threaten to have major negative impacts on the ability of investors and developers to obtain bank lending.
A new practice called slotting, which will require lenders based out of the UK to set funds aside to cover potential lending losses, could actually work against the efficient understanding of risk, and make banks even less interested in lending against real estate. The concerns are raised by the respected Investment Property Databank, which has researched the likely impact of new rules, in a bid to encourage further debate ahead of implementation. “Based on our findings,
slotting could cause serious harm if the impact on the property market and its relationship to the wider economy are not fully understood,” warned Phil Tily, managing director of IPD in the UK.
IPD tracks real world property
performance, and in 2010 expanded its database to include the hotel sector. It currently records the performance of more than 475 hotels across Europe,
WWW.SLEEPERMAGAZINE.COM NOVEMBER / DECEMBER 2012 133
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 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156 |
Page 157 |
Page 158 |
Page 159 |
Page 160 |
Page 161 |
Page 162 |
Page 163 |
Page 164 |
Page 165 |
Page 166 |
Page 167 |
Page 168 |
Page 169 |
Page 170 |
Page 171 |
Page 172 |
Page 173 |
Page 174 |
Page 175 |
Page 176 |
Page 177 |
Page 178 |
Page 179 |
Page 180 |
Page 181 |
Page 182 |
Page 183 |
Page 184 |
Page 185 |
Page 186 |
Page 187 |
Page 188 |
Page 189 |
Page 190 |
Page 191 |
Page 192 |
Page 193 |
Page 194 |
Page 195 |
Page 196 |
Page 197 |
Page 198 |
Page 199 |
Page 200 |
Page 201 |
Page 202 |
Page 203 |
Page 204