Atlanta-based hotel management company Valor Hospitality Partners is growing its division of hotels in the United Kingdom and Europe with the addition of 17 properties.

Brian McCarthy, Valor Hospitality's managing director for the U.K. and Europe, said his portfolio of United Kingdom hotels has recently doubled, following an appointment by MCAP Global Finance, an affiliate of New York City-based investment manager Marathon Asset Management, to manage a newly acquired portfolio of 2,374 rooms in 17 hotels. The addition includes 15 Holiday Inns and two Crowne Plazas in different regions across the U.K, including Leeds, Leicester, Reading and Southampton.

Overall, the division operates 34 hotels in the U.K., with a total of 5,778 guest rooms, and a further 46 hotels across Europe, Asia, the Middle East and South Africa.

Valor has enjoyed a lengthy relationship with Marathon.

McCarthy said the European division, based in the English town of Romford, was formed when Marathon bought an 11-asset Queen Moat Hotels portfolio in 2014 for 135 million pounds sterling ($188 million).

“Then [in August 2014], it was a joint venture between Marathon and Valor, with a third-party management company founded, and a year later Marathon bought from peer firm Blackstone Group five formerly branded Mint properties, which we managed, too,” he said.

According to Hodges Ward Elliott, Marathon paid 160 million pounds sterling for five hotels with approximately 1,200 rooms.

The relationship ended when Marathon exited the European hotel landscape in 2019 with a sale to Thai conglomerate DTGO for 450 million pounds sterling. DTGO also bought the private-equity firm’s share in Valor.

The two companies’ divulgence gave Valor additional credibility, McCarthy said.

“Valor was pigeonholed as being one and the same as Marathon, but we also had the capability and ability to work beyond them,” McCarthy said.

Today, the second chapter with Marathon was a testament to the performance the first time around, he said.

“As we go forward potentially opportunistically in Europe, we now have the strengths to work with that organization and others, and we are interested in individual assets potentially under another fund," McCarthy said. “We have built up over that time best-of-class in all sectors we operate in."

Valor is interested both in third-party management and portfolio opportunities as the world slowly comes out of the pandemic and hotels change hands, he said.

“We now have strong evidence of good, long-term performance. We are a credible alternative and have ongoing relationships,” McCarthy said, adding that across the entire company the ambition is to reach a milestone of 100 hotels.

McCarthy said for Valor, the COVID-19 pandemic has been marked as one in which its hotels’ owners have proved to be calm, understanding and involved.

“It is an unusual time, and the portfolio has had a difficult time, but our owners have proved to be great owners, and we have continued to keep ourselves busy,” he said.

He added that apart from mandatory closed periods, Valor’s hotels remained open.

“We have seen hotels have accelerated out of all of this much better if you stayed open, and our market position is far better as a result,” he said. “It is turning into a good period for us, on the back of our endeavors with Marathon … but no one has been immune [to COVID-19]. On a human level, people have lost jobs, and no one loses sight of that."

McCarthy said Marathon has been a key partner with Valor since the pandemic began.

“We all needed to keep balance, and Marathon has been respectful and 100% joined us,” he said, adding that the relationship with his U.S. parent company and colleagues has also been instrumental in operations across the last 17 months or so.

CEO Euan McGlashan and Chief Investment Officer Steve Cesinger — an ex-investment banker — founded Valor in 2012.

Valor Hospitality has had to defy some common misconceptions about its company structure, McCarthy said.

“When the terms third party and/or white label are bandied around, there is perhaps a feeling that means [operations] are not fully engaged, but it is an integrated relationship [with Marathon]. It is all one organization, with totally aligned aspirations and objectives.

“It has helped that they also for a while owned part of us."

McCarthy, who before joining Valor was chief operating officer at De Vere Hotels and Village Urban Resorts, said his U.K. portfolio comprises IHG Hotels & Resorts, Hilton and Marriott International franchises, mostly in the centers of cities such as Birmingham, Bristol, Chester, Leeds, Liverpool and Manchester.

It also operates the first two AC by Marriott hotels opened in the U.K., located in Birmingham and Manchester.

He said he is seeing signs of recovery, too, notably in Chester and Plymouth.

“Plymouth is an interesting market, not just because of leisure. It has a Monday-to-Thursday corporate market in industries such as utilities, energy and dockyards,” he said.

Valor Hospitality has room to grow in other segments, McCarthy said.

“In the future we see our growth coming from elsewhere," he said. "We’re keen to work with other parties, so we do not pigeonhole ourselves, in segments from budget to luxury. Other owners will appreciate the success we have delivered.”

Further expansion in Europe is also likely, he said.

“Absolutely, we’re laser-focused, as we can be successful only if we continue to deliver with owners we work with. We get it that it is all entirely performance-related,” McCarthy said.