Clive Hillier to speak at Henry Stewart’s forthcoming 'Finance for Hotel Investment and Development in the UK and Continental Europe’ Conference
Clive Hillier confirms speaker slot at Henry Stewart's forthcoming 'Finance for Hotel Investment and Development in the UK and Continental Europe' Conference on 11th September 2013. read more…
Clive Hillier Makes an Appearance on Hospitality 250
Clive features in Hospitality 250, an initiative to celebrate people who stand out for making an impact within the hospitality industry. read more…
Clive Hillier panel session video from the Berlin Conference earlier this year
Clive Hillier, CEO moderates a panel session at the Berlin Conference earlier this year. read more…
Ben Godon panel session video from the Berlin Conference earlier this year
Ben Godon, Director, moderating a session panel at the Berlin Conference. read more…
Clive Hillier Appointed as an Independent Expert Witness in Hotel Arbitration
Clive Hillier has been appointed as an independent expert witness in a hotel arbitration in the Middle East. read more…
Vision at the International Hotel Investment Forum, Berlin
Vision is pleased to announce it will be sponsoring the annual International Hotel Investment Forum in Berlin this March. read more…
Clive Hillier to speak at a Hotel Team Professional Development Day
RBS Divested Bank (the part being sold to Santander) have asked Clive Hillier to speak at their Hotel Team Professional Development Day on 26th October. Clive will be discussing the role of an Asset Manager and when is the right time to consider involving one. read more…
Vision Hospitality Asset Management at Hilton's Charity Ball
Vision is proud to announce its attendance- and hosting of a table, at the Hilton Foundation Ball on 17th November at the London Hilton on Park Lane.
This event is Hilton’s premier fundraiser. An exclusive event attended by business leaders, premier corporate clients as well as celebrity guests. read more…
Vision Hospitality Asset Management at the Annual IHIF Sponsors' Dinner
Vision is delighted to be hosting a table at the Annual IHIF Sponsors’ Dinner on 22nd October at the Park Plaza, Westminster Bridge in London. read more…
Vision Hospitality Asset Management Collaborates with One of the World’s Leading Organisations of Independent Assurance, Tax and Advisory Firms
Vision Hospitality Asset Management collaborates with Grant Thornton and Tri Hospitality Consulting to provide a 'one stop shop'solution for strategic advice for hotels and portfolios throughout Europe. read more…
Vision Asset Manages 11 Central European Hotels on Behalf of Banks and Investors
Vision Hospitality Asset Management gains two new instructions in Central Europe covering 11 resort hotels in Croatia. read more…
Vision Hospitality Asset Management Appointed to Manage the Operations of the Royal Crescent Hotel in Bath
Topland,one of the largest privately owned international investment groups appoints Vision Hospitality Asset Management to manage the operations of the Royal Crescent Hotel in Bath on its behalf. read more…
Vision Hospitality Asset Management and MWA Partnership
Vision Hospitality Asset Management and MWA are delighted to announce an agreement to offer joint hotel consultancy services in Spain and Portugal. read more…
Vision Hospitality Asset Management Acquires New Instruction
Vision Hospitality Asset Management is delighted to announce another instruction to its expanding asset management portfolio. read more…
Vision Hospitality Asset Management Appointed by The Football Association
Vision are delighted to have been appointed in the Asset Management role for The Football Association with respect to the two hotels at St. George's Park. read more…
Clive Hillier Featured in Hotel Analyst "Perspective" Newsletter
Vision Hospitality Asset Management Sponsors IHIF 2012
Vision Hospitality Asset Management sponsors the Annual International Hotel Investment Forum from 5th - 7th March 2012 in Berlin, Germany. read more…
Clive Hillier and Allan Davidson at the Henry Stewart Conference
Clive Hillier will be moderating and Allan Davidson will be speaking at the Hotel Operating Agreements event at the Henry Stewart Conference on 21st March 2012. read more…
Vision's Asset Management Portfolio Continues to Grow
Vision adds a luxury 5 Star Resort to its portfolio. read more…
Vision Retains Prestigious Asset Management Contract
Vision is delighted to be re-appointed by new owners Sahara to continue its asset management role for the hotel. read more…
Clive Hillier Featured in Hotel Analyst "Perspective" Newsletter
Sector players becoming flexible friends
Operators are becoming less rigid in their relationships with owners and banks, as the economic climate puts increasing pressure on pipelines.
The need to be more lenient over terms of agreements, with possible renegotiations on both sides is becoming more pressing, as the previous dominance of owners over operators in the boom years fades.
Clive Hillier, CEO of Vision Hospitality Management, told delegates at this year's International Hotel Investment Forum in Berlin: "In general, the operators are responsive. Their pipelines are decreasing, they need to put flags on maps. It's not palatable to renegotiate their fees. We say: ‘Do you want to talk to the owner you know, the bank you don't know, or the receiver you don't want to know?'"
The conference's panel on preventing and managing default focused on the dissolution of the Von Essen portfolio, seen by some as a cautionary tale of investors' naivety.
David Duggins, director, Von Essen Hotels, said: "Fraud happens and it happens in every single industry. You have to be on your guard.
"You need an appropriate level of scepticism when looking at business plans. If you're relying on the asset being sold to repay the loan, remember you've got to know that loan will survive whatever is likely to come up. If you're planning to lend with the expectation you'll get repaid by refinancing, that's not banking, that's gambling."
Tom Page, UK head of hotels and leisure group at CMS Cameron McKenna, added: "When there's been a lack of trust in the operator, that's when the banks take action - if there's any suspicion about how truthful the borrower is being."
Hillier said: "Von Essen's an interesting study, but for every Von Essen there are 99 distressed situations that are caused by economic events, not fraudulent ones."
With much of the Von Essen portfolio having been sold at the time of going to press, talk turned to the end of the era of ‘pretend and extend' and the options to lenders when it came to selling properties in the current climate.
Page said: "The banks need to factor in how much the actual value of the building is. They need to assess the business plan and then look at a turnaround plan, or maybe it's best just sell to the asset immediately. You also need to look at the future funding obligations - banks are unwilling to put good money after bad if capex can't be funded."
Duggins commented: "Things get blurred when you have an ‘extend and pretend' approach. Covenants are waived, payments are waived. These situations are hard to explain, either to staff or creditors. When you see a default coming, you need a plan."
After the rapid expansion at the top of the market, one of the issues facing owners was identified as lack of interest from brands, with Page commenting: "A lot of deals done at the peak are based on forecasts of keenly rising profits. The operators are not getting any incentive fees. From that point on, the operator has no alignment with you in the business."
Page suggested that it may be worth changing the terms of the deal and returning an incentive element to the relationship.
Elsewhere at the conference, the CEOs panel saw some caution expressed over the ongoing straightened debt markets. Richard Solomons, CEO, InterContinental Hotels Group, said: "As brands we're seeing a very good picture, for some owners it's less good. Banks talk about lenders and finance, but debt's the issue. We need our class of asset to be something which banks will invest in again."
He added: "You've got to be concerned about the level of personal debt and government debt in Europe and the US. At some point this will have to be addressed."
The issue of pipeline maintenance was raised, with an increasing reliance among the operators on conversion, in particular in the European market. Steve Joyce, president and CEO, Choice Hotels International, thanked Solomons for IHG's decision to remove hotels from its Holiday Inn brand as part of the flag's relaunch, commenting: "We love his owners, we give them a home", suggesting that the sector was not so much expanding as exchanging the signs over the doors. Long term, however, there was greater optimism for real growth.
Frits van Paasschen, president and CEO, Starwood Hotels & Resorts, said: "It's hard to paint a picture that we'll get out of this unscathed as a region, but as an industry we could be on the cusp of a golden age. There will never be another Paris, Rome or London and as wealth accumulates, people will want to visit.
"What we're seeing now is one of the great transformations of humanity. There are five or six billion cell phones out there and in three to four years they will all be smartphones. The next 20 years will see three billion people join the middle classes."
The hopeful sentiment was carried over into the rest of the sector, with Duggins concluding: "The Von Essen portfolio has some properties that have never made a profit and yet we've still sold them. There's always someone who thinks they can make money from hotels."
HA Perspective: There is clear evidence that brand owning hotel operators are using their balance sheets to promote growth. But this should not be taken as a reversal of the asset light strategy.
Where the balance sheet is deployed, operators are looking for a clear exit in a comparatively short time frame (usually at most it is five or six years).
Speaking in a separate interview with Robert Shepherd, svp development for IHG in Europe, there are a number of approaches being deployed or about to be unveiled.
IHG has four key markets in Europe - the UK and Ireland; Germany; Russia and CIS; and Turkey. For Germany in particular some novel approaches are being wielded to enter what is a lease dominated market.
According to Shepherd there is a clear gap for development finance (something of an understatement in reality) and IHG is stepping in to help.
For leases, IHG is prepared to offer guarantees to banks on behalf of developers when a multi-site franchise deal is signed. Once the developer reaches five or six operating units, this guarantee can be transferred across to the developer / operator.
More ways of "filling the gaps in the value chain" are under discussion but Shepherd is still seeking approval which he hopes to get by May.
"This is a multi-faceted strategy, not a simple franchise play. We hope to create a scale-able management model," he said.
The target in Germany is to have 200 properties by 2020, although it was stressed that quality would win out over quantity. The ultimate aim is to unseat Accor as the largest operator in the country although this was a big challenge, it was admitted.
Restructure - European Boutique Portfolio
Vision was approached by the funder of a portfolio of 12 hotels. The hotels had suffered significant reduction in performance due largely to the economic circumstances of the countries in which they are located. read more…
Operator Selection - Paris
In 2010 Vision was asked to help a client with the operator selection process. The contract with the existing management team was coming to an end so Vision was asked to prepare a list of potential new operators for the hotel, as well as potential structures such as Management Agreements, franchises etc. read more…
Financial Restructure - Mid Market UK Portfolio
At the end of 2009, Vision was approached by three banks who were lenders on a portfolio of 12 hotels. The banks engaged Vision to assist with the portfolio that had breached its lending covenants. read more…
Asset Management - Iconic London Hotel
Vision was approached in July by an owner of a large luxury Hotel in central London which had opened just three months earlier. The opening of the hotel had proven challenging, and the owner had become concerned with the level of performance by the Operating Company. read more…
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