Whilst it would be unrealistic to suggest that the hospitality industry is immune from prevailing economic conditions, London is presently enjoying unprecedented room demand, which has resulted in sustained growth in RevPAR over the past 18 months.
Although The Capital could be viewed as having its own “micro-climate”, well managed provincial hotels with tight cost control continue to trade profitably in spite of what the economy has thrown at them. Indeed, the “staycation” has seemingly been accepted into day to day conversation with the short leisure break providing the foundation for hotel businesses such as those found in Bournemouth and across the Central South.
However, the ambitious operator seeking to expand, alongside the first time hotelier taking their initial steps into the industry, continue to suffer as a result of lender nervousness. Borne out of shifting policy, the current predisposition applied by the financial institutions is that profit and profit alone determines property values – ignoring bricks and mortar – a paradox when the business cannot function without the accommodation. Consequently, transactions have been stifled with a cash deposit of 50% required before prospective purchasers can realistically gain even an audience with their local bank manager. This situation has to, and eventually will, improve.
Set this challenge, experience gained from being the longest established hotel specialist in the region stands Goadsby in good stead to continue to defy the market achieving continued successes, not least of which being the sales of two 50 bedroom hotels in the last quarter alone. The Kiwi Hotel on the West Cliff of Bournemouth had been in continued family ownership for 50 years prior to disposal; the purchaser having identified the hotel as the ideal location to expand his existing portfolio. Abbey Lodge, formerly the Midland Hotel, purpose built to serve the long since gone Bournemouth West Railway Station, was enabled by bringing the leasehold occupier and freeholder together, conducting a simultaneous disposal without which the transaction would not have been viable.
Lateral thinking, market knowledge, access to private finance and a strong support network contribute to Goadsby maintaining its position as the dominant force in this marketplace.
