INDUSTRY TRENDS
Hotel and Restaurant Purchases
Right: Mint Hotels Christie + Co provided a formal loan security valuation of this portfolio, on behalf of a bank seeking to fund one of the bidders. The group comprised seven UK hotels and one in Amsterdam. Two of the UK hotels are in London and comprise approximately 1,000 bedrooms. The portfolio was eventually acquired by Blackstone Group (owners of Hilton Worldwide) for a reported £615m.
like coming for some time.
Restaurants Last year saw consumers reaffirm their appetite for eating and drinking away from home, despite the consistent strain on the pursestrings. The eating-out sector responded with an array of choice – all of which was good news for the diner. However, increasing competition, and price competition from the likes of foodled pubs, led many operators to struggle, bringing many restaurant opportunities, particularly amongst the independent sector, to the marketplace. Consequently, Christie + Co reported a decline in average prices in the restaurant sector of 4.1 per cent. The current year is shaping up in similar fashion, giving investors and consumers greater choice for their money, but making competition yet more fierce.
Recycling and distress to the fore The restaurant marketplace, like others, was not conducive to great lending activity. New developments were virtually non-existent and transactional activity was focused on the recycling of existing sites and distressed sales. London and top-end fine dining outperformed the rest of the sector, with those
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l UK HOSPITALITY BLACK BOOK 2012
restaurants listed amongst the top-20s in the various restaurant magazines and newspaper supplements continuing to do well. In this Olympic year, London will continue to exploit its international context and benefit from tourist and visitor spend. However, for existing and budding restaurateurs, the year is likely to show peaks and troughs, even though there will be opportunities for sound investment. Competition to the traditional restaurant sector is growing from many quarters and consumers have never had a greater choice, especially with prices for dining on a par with 2005. New developments remain relatively thin on the ground but with larger operators recycling existing sites and rationalising estates, there are opportunities for potential investors and operators.
Independents day In 2011 newcomers, encouraged by some excellently-priced opportunities, came in at a simpler entry point. What we saw was perhaps the beginning of a trend which will continue into 2012 – and that is a greater opportunity for the local independent restaurant. It’s true, independents cannot match the strength of brand of the celebrity chefs or the corporate operators, but they do have many
potential qualities that cannot be equalled by their peers. Independent restaurants can provide the personal touch that brands cannot provide, and it is on this that they should focus. They can also deliver fine food (but not fine-dining) at a price that is affordable to a greater number of people. And with the personal touch comes the propensity for repeat business. The other element that’s likely to favour independent restaurants is their locality. There were indications in 2011 that ‘neighbourhood’ restaurants were making a return to favour. In addition to the personal service they were able to offer, they had the added advantage of being in the location that their customers increasingly demanded. With the purse-strings tightened, many consumers ditched the trip to the edge-oftown and out-of-town restaurant in favour of the restaurant down the road. Even where the restaurant chains offered voucher deals, the travelling cost increasingly made the offer redundant. It is likely, in a market that is still liable to suffer in the face of the poor economic climate, that 2012 will see yet more local restaurants springing up — offering existing and prospective restaurateurs affordable opportunities as values remain on the cautious side.