Barceló threatens to quit UK if rent cut not met

22 November 2011 by
Barceló threatens to quit UK if rent cut not met

Spanish hotel company Barceló Hotels & Resorts could withdraw from the UK if its demands for a reduction in its rent it pays for the 21 regional hotels it operates here are not met.

Owned by Puma Hotels, the group of four-star properties includes the Lygon Arms in Broadway, Worcestershire, and the Imperial in Torquay. Like many other provincial hotels, the properties suffered a fall in business during the recession.

The Hotel Corporation, an AIM-listed investment company which owns 49.9% of Puma Hotels, confirmed that Puma had received a letter from Barceló asking for the rent to be revised and unless a revision is agreed the Spanish group intends to withdraw financial support from its UK hotel business.

Barceló signed a 45-year lease to run the 21 hotels in 2007. Puma now intends to enforce all its rights under the leases, including the guarantees provided by Barceló, "to the fullest extent possible."

With the Spanish economy in difficulty, Barceló may be considering divesting its overseas interests to concentrate on its core business at home. The company currently manages more than 185 hotels across 17 countries.

Hotel consultant Melvin Gold said that the terms of the lease were likely to be proving onerous for Barceló in the current economic climate, with regional UK hotels under trading pressure from both limited revenue growth and cost increases.

"This is yet another example of a UK portfolio which has run into problems over a protracted period of low revenue growth," he said.

Recent months have seen the administration of Professional Ventures Corporation, the holding company for 42 hotels operated by Marriott Hotels International, and Jarvis Hotels, whose 24 hotels have been transferred to the ownership of new company Jupiter Hotels.

Barcelo Hotels property owner continue to make progress >>

Administrators take charge of 42 Marriott hotels >>

Jarvis hotels to be rebranded Mercure after Jarvis Hotels re-pack administration >>

By Janet Harmer

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