Private equity funding is big business in the hotel world these days. And, book-ended by major deals from Colony Capital and Goldman Sachs's Whitehall Fund, investment in the European hotel sector from this arena is set to rise again this year.
Provisional year-to-date figures show acquisitions and investments already up on last year's figures, at €2.7b (£1.9b), from €2.5b (£1.75b).
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Private equity firms, together with new private equity-style cash vehicles, have emerged as the key players in the hotel property market in recent years. Figures from agent Jones Lang LaSalle show them being involved in 33% of all acquisitions between 2000 and 2003.
That ratcheted up at the end of last year, with Lehman Brothers' €1b (£700m) takeover of the Le Meridien chain, and continued into the early part of this year, with Colony buying into the extended Accor/Barrière hotels and casinos group in January, Quinlan Private buying the Savoy Group, and Apax Partners narrowly missing out on the Premier Lodge chain.
The trend was extended by Goldman's €700m (£490m) takeover of the Queens Moat House chain.
Interspersed among this have been deals which saw Westmont buy Belgium's Carestel chain, Alchemy Partners sell Paramount to Dawnay Shore Hotels, and Patriot Capital buying in Bratislava. And Blackstone and Whitehall have both tabled first-round offers for InterContinental's €2b (£1.4b) UK portfolio.
Robert Seabrook, vice-president at Jones Lang LaSalle Hotels, which has advised on a number of the bigger deals, says that US money has been forced abroad of late due to high prices at home. In contrast, he says that a lack of interest from institutional investors in Europe has meant that prices have stayed relatively low.
"The general consensus is that the US market has been extremely hot," he said. "It has been very, very difficult to acquire there. In Europe, US funds are seeing the opportunity to get in at the bottom of a growth cycle."
Seabrook believes that we have not seen the last of the big deals, either. "There is still some activity to be done in this arena," he said. "There are portfolios that need reorganising."
He points to Whitbread's Marriott franchise as another forthcoming deal likely to attract private equity interest. "There's a lot of product coming out on to the market," he said. "And when they're sold as portfolios, private equity houses really feel they have a chance of doing a deal. It counts out a lot of the smaller companies, because they haven't got the firepower."
The recent increase in planned disposals has coincided with a record round of fundraising by private equity houses. European funds raised €20b (£14b) in the first three quarters of this year, up by 25% on 2003. Blackstone, which last year opened offices in Germany and bought properties in Munich and Düsseldorf, closed its latest property fund at €2.5b (£1.75b) over the summer; Apax Partners closed recently on €4.5b (£3.15b), one of the biggest ever European funds.
However, for Nick van Marken, head of Deloitte & Touche's travel, tourism and leisure consultancy arm, anyone expecting that to mean crazy prices should think again.
"Private equity funds are interested in deals that make money," he said. "They're governed by the same considerations as everybody else. It's just that they're more aggressive."
Van Marken sees the increasing influence of the private equity mindset as good for the industry. "It's woken up a lot of players," he said. "Ten years ago, if you talked about asset management, you'd be talking about your pension. What asset management in the hotel sector means now is making property work for you. Ten years on from now, the ownership of the sector will have fundamentally changed - and people will ask why it took so long."