Funding is still available to back the right hospitality business despite the ongoing economic slowdown, financial experts have insisted.
Fears had been raised that the credit crunch was going to stifle innovation in hospitality, as new entrants were discouraged from entering the market due to the difficulty in sourcing finance.
But Ed Fazakerley, founding partner of Zeus Private Equity, which recently provided £50m backing for hoteliers Arnold Schnegg and James Hawksworth to build a collection of four-star hotels as the Hallmark Hotel Group, said operators with the right team can still get finance. "At the right price and with a robust team the doors are not closed," he said.
Craig Armour, senior director of LDC, which backed a team headed by James Horler to buy restaurant chain Ego from its founders for £9.1m at the end of March, agreed. "Some private equity firms aren't investing now, but there are pockets where there is a niche that's doing well, such as Ego," he said.
Although Armour admitted that hospitality is at present a "fragile market", he insisted the downturn will also present "opportunities for growing businesses, as other operators will be more amenable to sell up or offload specific sites at lower valuations".
By Daniel Thomas
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