Change Management in 3 Star Hotels in UK
Management contracts are very much sought for in the hotel industry these days. When the real estate markets started collapsing, more companies sought management contracts rather than outright buy hotels. One such example of this is the Peel Hotel group in the United Kingdom. Peel Hotel is a well known hotel chain which own and operate 4-star hotels in various areas of the United Kingdom.
Peel Hotels owns and operates nine four-star hotels. It was set up in 1997 by Robert Peel, the son of a restaurateur, shortly after he quit his role as chief executive of Thistle Hotels, which was then the second-largest hotel group in Britain after Forte. Peel and his brother Charles hold more than 50% of the equity in the AIM-listed company.
Peel Hotels comprises of the following properties:
- Bull Hotel, Peterborough
- Caledonian Hotel, Newcastle Upon Tyne
- Cosmopolitan Hotel, Leeds
- Crown & Mitre Hotel, Carlisle
- George Hotel, Wallingford
- King Malcolm Hotel, Dunfermline
- Midland Hotel, Bradford
- Norfolk Royale Hotel, Bournemouth
- Strathdon Hotel, Nottingham
In September of 1998, Peel Hotels floats on the Alternative Investment Market. It also wins the management contract for 29 smaller, provincial, three-star Thistle Hotels bought by Grace Hotels, a subsidiary of investment bank Lehmann Brothers, for £62.7m. They are gradually sold off, with most of them changing hands after 2000.
Thistle Hotels is a UK-based hotel company with a portfolio of 33 hotels, operating in the three and four star sector. It is the sixth largest hotel chain in the UK by bedroom numbers (10,000), but the largest hotel chain in London. Thistle hotel locations are in many superb city centre locations, including eleven in central London. Thistle hotels are part of Guoman Hotel Management (UK) Limited operating a number of hotels throughout the UK.
Guoman Hotels Group Limited is the principal investment of Guocoleisure limited an investment holding company with its primary listing on the Singapore Stock Exchange, and secondary listings on the London and New Zealand exchanges. Guocoleisure became majority owned by the Guoco Group in October 2005. The Guoman Hotels Group owns leases or manages 38 hotels in the United Kingdom. All are full service hotels, catering for both business and leisure travelers, with industry leading EBITDA conversions. (Thistle hotels)
One interesting facet about this management deal between Peel Hotels and Thistle Hotels is that Robert Peel was associated with Thistle Hotels for a number of years. It was in 1997 that Robert Peel was forced to resign his position as Chief Executive as Thistle Hotels failed to maintain its profit growth. The company was also criticized for holding on to many of its lesser quality hotels while at the same time not joining in the technological innovations which hotels went through in the 1990’s. The company’s share price slipped and this led to Peel’s demise.
The management deal taken over by Peel hotels was the result of a decision by Thistle to rationalize its portfolio and concentrate on building up its chain of branded hotels instead. The properties being sold range from the Mercury Hotel in Fort William to the Astor in Plymouth. Peel’s new company, Peel Hotels, floated on the Alternative Investment Market in March, will run the hotels under an “incentivized management arrangement”, with the option to buy two of them, in Leeds and Newcastle- upon-Tyne. the former chief executive of Thistle Hotels, returned to familiar haunts with a deal that gives him management control of a third of his old firm’s portfolio. (Cope, Nigel) One can say that Peel came full circle.
References:
Cope, Nigel. Peel to run hotels in pounds 66m buyout. The Independent. 4 September, 1998. Retrieved 25 June, 2011 from http://www.independent.co.uk/news/business/peel-to-run-hotels-in-pounds-66m-buyout-1195879.html
Peel Hotels Company Profile. Caterer search.com Retrieved 25 June, 2011 from http://www.caterersearch.com/Companies/33811/peel-hotels.html
Peel Hotels. Retrieved on 25 June, 2011 from http://www.peelhotels.co.uk/
Thistle Hotels. Wikipedia. Retrieved 25 June, 2011 from http://en.wikipedia.org/wiki/Thistle_Hotels
Credit:ivythesis.typepad.com
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