New Puma Hotels chief executive plans to accentuate hotels' individuality and local appeal

06 November 2012
New Puma Hotels chief executive plans to accentuate hotels' individuality and local appeal

The new chief executive of Puma Hotels Collection, Fredrik Korallus, is to reposition the group's 21 sites to accentuate their individuality and local appeal, with a view to drawing in more leisure customers.

Korallus, former global executive vice-president of Carlson based in the USA, has been at the helm of the business for three weeks.

With debts of more than £330m, he has a tough job on his hands as head of the group of four-star provincial hotels including the Lygon Arms in Broadway, Imperial in Torquay and the Majestic in Harrogate.

In the company's last set of financial results, Puma posted losses of £175m following a year of upheaval for the company with Spanish hotel operator, the Barceló Group, pulling out of an agreement early to operate the 21 hotels.

Since the end of April, Puma has resumed the direct management of the hotels, which it previously operated prior to the signing of a 45-year lease with Barceló in 2007. The Spanish group agreed to pay a penalty fee of £20.25m for breaking its contract. However, Puma has lost the £30m annual rent from Barcelo.

But Korallus, who has used his first few weeks in charge to tour Puma's hotel collection, said he was confident about the future. "What has impressed me over the past couple of weeks looking at the properties and also the people is that we have a phenomenal portfolio of great destinations and very good assets and I would say that they are all, to a one, underleveraged," he told Caterer and Hotelkeeper.

"These are landmark hotels that are deeply rooted in history and culture, that perhaps for whatever reason have lost their way and really need to be brought back to life. So the strategy for Puma is to drive awareness of the individual hotels and to put them back into their standing within their local community and within the markets that they serve."

Korallus blamed the loss of status among some of the hotels on a lack of localised strategy but that the group had already outperformed the market in terms of market share in October. Speaking of the period before October he said: "It is fair to say that the collection has on average performed worse than market. I think that has been because there has been a one size fits all with the past branding and they were lost."

And he said he was unfazed by the collection's £330m debt burden, along with the fact that its auditors Deloitte warned in the firm's last set of annual accounts that was a "material uncertainty that may cast significant doubt about the company's and group's ability to continue as going concerns".

Korallus said: "I have absolutley no concerns at this stage. I think that there is uncertainty across the board, around the world in any industry right now due to turmoils that various businesses have been through. We have a very supportive board, we have a very supportive major shareholder, we have a very supportive relationship with our bank. I cannot say more than that at the moment. We are investing in people and assets right now. We are just about the announce the appointment of three new general managers. Put it this way, we are attracting good talents and I certainly wouldn't move my family across from North America if I didn't believe that we had a very strong future."

When asked if Puma might sell some of its hotels to shore up its financial position, he said: "There are no immediate plans for anything other than stabilising and enhancing and growing the business. That said, over time we will assess assets to evaluate fit and future potential and manage accordingly."

He also predicted that a feel-good factor in Britain following the Olympics and success in other sporting events, presented an opportunity for the business. "The way this nation handled the Olympics, the way you are performing in sports - I think we are going to see a winning streak going forward and my plan is to optimise on that. In any given climate there can be winners and there can be losers and our strategy is to be on the winning side," he said.

Fredrik Korallus appointed chief executive of Puma Hotels >>

Puma Hotels stays positive despite bank debt of more than £330m >>

Puma Hotels' Collection launches with 20 Barceló properties >>

By Neil Gerrard

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