In advance of the forthcoming EU Referendum we have reviewed our current holdings and will continue to hold existing investments whilst adding to our hotel/catering interests. Why now? This is an opportune time to do so for a number of reasons
1. Digital technology is transforming use of hotels for both business and leisure activities and it has opened up new markets worldwide. Mobile devices and the internet have changed people's concept of how to engage and what to expect from hotels. Now guests anywhere with the latest technology can book their travel in greater comfort and immediacy, with many guests now making travel arrangements within 24hours of arrival. Also. technological developments within hotels have enabled owners to reinvent management and marketing structures to increase occupancy,food and beverage revenue and REVPAR.
2. Technology is enabling tour and travel operators to increase their business substantially and develop richer insights into guests needs,enabling more personalised services and consumer tailored offers.
3. Tech has developed a new market for alternative lodging providers which existing hotel groups are now embracing as part of their long term expansion into an increasingly diverse marketplace,where they can develop quickly and securely backed by an experienced management with a sound financial base.
4. Our current holdings are being increased in:
IHG. (Intercontinental), with its base in England and its international interests mainly in the US , Europe and China
NH Hotels with its base in Spain,Latin America and Europe, and set to benefit strongly from tourism in Spain,Portugal, France and Italy as Turkey,Greece and Egypt suffer politically.
Accor with its French base and international interests in former French territories and China and with a growing involvement in the branded residences business through digital platforms of Squarebreak and the Oasis Collection. The recent additions of the Fairmont, Raffles and Swisshotel chains will give Accor new top brand names to develop in the Luxury Market particularly in North America where there is a latent demand for new properties.
The Building Industry.
Analysts and self styled experts continue to criticise the nations house builders which in turn has hit share prices by 10% this year.In our view there is no logic in this as all the major house builders are working to near capacity subject to Planning Approvals.
The past month has seen updated figures from Taylor Wimpey with its order book up 16% in the first. 15 weeks of 2016 and another good dividend increase anticipated from the very strong cash flow now being generated.
June will see figures from Berkeley Homes and a record dividend is expected on the back of profits ahead of expectations.
Contract Catering Services
This week has seen a very satisfactory increase in both profits and dividends from Compass, the worlds largest company in this service industry, based here in Chertsey in Surrey.
Soon to report is Sodexo based in France and like Compass operating in most major countries internationally,with further profit and dividend increases expected.
Summary
Our portfolio continues to do well and should continue to improve from a sound base regardless of the forthcoming Referendum
Tip for the summer -non financial for all friends and clients !
If you are lucky enough this summer to be visiting the Chichester Festival Theatre,the Brasserie restaurant there serves one of the best pre theatre dinners,(from a local caterer-----Caper & Berry,) that I have enjoyed.Only equalled by the Opera Theatre on the LAKE at BREGENZ in Austria.