Last month I cautioned investors/hotel buyers to think twice before investing in small hotels in the same market as Travelodge/ Premier Inns/Holiday inn Express as I do not believe you can compete on price or facilities as these three chains develop. Some of our clients took this to be against all small hotel investment which is not the case. You only have to look at the latest figures from Small Luxury Hotels (SLH) which, just last week, reported that revenue and reservations are at a record level.
SLH has hotels of primarily 4star standards with a wide range of facilities , leisure activities and interests, excellent restaurants and personal service associated with traditional hotel keeping – the things the budget chains can never emulate – -and guests will pay for quality and service.
Successful hotel operations particularly in small hotels need a unique style and ambiance with
personal management and a sound financial base to ensure the long term growth of a repeat customer business and guests who will tell their friends about your great hotel and all it has to offer.
It will never be an instant profit maker but as the business develops the rewards can be very attractive both financially and personally.
Here at CALPE we have the knowledge and experience to help you enter the hotel business or develop and expand your existing operations with Small Hotels of Quality.
However if you want to invest in budget hotels then a shareholding in the big chains like Whitbread for Premier Inns, or IHG with its Holiday Inns Express brand should appeal.
All our clients now appear to be having a successful summer season and we look forward to the autumn and their plans for the forthcoming year.