Whitbread flies marriott flag
By Dominic Walsh
Whitbread is to add over 3,000 bedrooms to the Marriott flag in the UK during the next 10 years, following its £180m acquisition of the 16-strong Scott's Hotels chain.
The deal with Canadian group Scott's Hospitality, announced on Monday after weeks of speculation, takes Whitbread from 5th to 3rd place in the league table of the UK's biggest hotel operators, behind Forte and Mount Charlotte/Thistle.
Once the deal is completed at the end of this month, Whitbread will set about adding 1,000 bedrooms to the brand by converting some of its own hotels to the Marriott brand, for which Scott's holds the UK master franchise and development rights. A fresh 20-year agreement with Marriott has been agreed.
Of its 12 Country Club Resorts, 10 are likely to undergo conversion, the exceptions being Redwood Lodge near Bristol, which has no golf facilities, and Tewkesbury Park, Gloucestershire, where the capital expenditure required would make it uneconomic.
Also likely to become Marriott resorts are the proposed development at Worsley Old Hall, near Manchester, and Hollings Hall at Shipley, West Yorkshire, where there are plans for a major redevelopment, including a golf course.
Of Whitbread's Lansbury Collection, about five or six are deemed capable of conversion to the three-star Courtyard by Marriott brand, including Suffolk Grange in Ipswich, and Padworth Court, Reading.
Some £10m of the £180m being paid will enable Whitbread to take over two Scott's-owned sites in Yeovil and Maidstone, which carry planning permission for Courtyard by Marriott properties.
Elsewhere, Whitbread intends to pursue talks held by Scott's over possible city centre sites in Edinburgh, Manchester and Birmingham. It also sees scope for further Marriotts in London, where Scott's has two hotels, at Regents Park and Marble Arch. Some 2,000 new bedrooms will be added over 10 years.
The combined company, to be relaunched as the Whitbread Hotel Company next spring, will have 152 hotels - including 28 Travel Inns under construction - and a total of 10,000 bedrooms with total turnover of about £150m. The 16 Marriotts, whose latest net asset value is put at £184m, have a total of 3,088 bedrooms.
Although acquiring the Marriott brand was clearly a big factor in the decision to buy Scott's, Alan Parker, managing director of Whitbread's hotel interests, said he had no intention of using it on the budget Travel Inn chain.
He said it made no sense to pay royalty fees when the chain had already established itself as a widely recognised brand, with occupancy currently running at 85%.
Nor, he added, was Whitbread planning to sub-franchise, though joint ventures and management contracts were a possibility.
"We would rather keep the opportunities to ourselves than share them," he said. "We believe Whitbread has the resources to fully exploit the Marriott brand in the UK."
Mr Parker said no decisions had yet been made on the enlarged group's management, though he was shortly to begin discussions with Scott's executives on an individual basis. "My first priority will be to retain the good people there," he said.
