Finance available for unbranded hotels, conference told
Despite the ongoing trend for investment in branded hotels, there is still an appetite to support unbranded properties, HOSPACE 2013 was told yesterday.
Speaking on the Hotel Finance Panel at the annual conference for technology, finance and revenue management professionals in hospitality, Andy Lancaster, head of hotels, Royal Bank of Scotland, said that independent properties are products which can offer something different from their branded counterparts.
"It all comes down to whether a hotel can demonstrate a competitive advantage and show that it can be sustainable," he said. "There is nothing to say that a hotel has to be branded for us to support it."
Graeme Smith, partner of Zolfo Cooper Corporate Finance, said that while a brand provides "a comfort blanket" for the credit committee, many businesses work well as an independent.
"Seeking finance without a brand will shift the focus on to who is the management team, what is the business plan, how sophisticated is the operation, the relationship with the OTAs, the revenue management potential, location and pipeline for the area," he explained.
Navneet Bali, chief executive and head of development and finance, Meininger Hotel Group, said that the key advantage of the big brands is their distribution and marketing strategy. "But you don't have to be part of IHG or Starwood to be on the internet and have a proposition which differentiates yourself from other businesses. You can often achieve a higher revpar without a brand."
