GLASGOW, Scotland—Redefine BDL Hotels has set its sights on becoming mainland Europe’s No. 1 hotel-management company, according to its managing director Stewart Campbell.
The company has nearly 70 properties in its United Kingdom portfolio. It will spend the next 12 months with its vision firmly fixed on the rest of the continent, having already become, in Campbell’s words, “by far the largest independent hotel company in the U.K.”
“Our vision is to be Europe’s largest hotel-management company,” he said. “Our key discussion is how we do that. There is the potential to buy a hotel-management company, but there are not many of those.
“Or we could buy a portfolio, but however that expansion plays out, we’d operate from the U.K. in terms of revenue management but be on the ground (in mainland Europe). We need to ramp up.”
Redefine BDL, which is the hotel division of U.K. real estate investment trust Redefine International, is continuing its push in the U.K. with the 94-room Holiday Inn Express St. Albans and the 240-key Courtyard by Marriott Edinburgh, both opening this year.
In 2015, the Glasgow firm retained management of 22 InterContinental Hotels Group properties that were bought at the end of 2014 by LRG Acquisition Limited, which is again up for sale as part of a larger portfolio.
But Campbell said the company’s energy will be directed at the continent.
“The rise of franchises is happening (in Europe), so there needs to be good, large management companies there,” Campbell said.
Campbell said the company’s base will remain in the U.K., but possible expansion will include The Netherlands, Belgium, Germany, Portugal, Spain, Ireland, Iceland, Italy and Scandinavian countries.
“Ultimately, it is down to opportunity,” he said.
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Stewart Campbell |
Campbell said the U.K.’s pending decision on whether to leave the European Union did not factor in to Redefine BDL’s expansion plans.
“Hotel performance would be linked to currency uncertainties, so perhaps there might be significant investment decisions that need to be made, but we do not see a massive impact from it if it were to happen,” Campbell said. “It would not massively change the flow of people. I do not have a strong view either way, stay in or leave.”
Campbell is confident concerning the domestic U.K. market, especially in the regions.
“We’re seeing 5% (revenue-per-available-room) growth there,” he said. “It will slow down slightly in 2017 and 2018, but there will still be growth. London, I think, will see RevPAR (growth) slightly under 2%, due to new supply and the strength of the pound (sterling).
“Our main focus has been on how well conference and banqueting has done. It has come back very strong. A few initiatives we’ve put in to spur this has leveraged increased demand, and this is very good business for hotels. Again, we’ve seen much stronger growth in the regions.”
Larger company
Campbell said he won’t let hypotheticals get in the way of Redefine BDL’s growth.
“We increased significantly in 2015 in terms of central employees,” Campbell said. “We had 90 people. Now we have 145 divided between Glasgow and London, and we have lots more employee space.”
Redefine BDL’s European expansion could be spurred by its first franchise deal with Paris-based AccorHotels for the 101-room Ibis Styles Glasgow, which was completed in 2015.
“It opened in September, and so far so good, with 90% occupancy,” Campbell said.
The DoubleTree by Hilton Kinshasa, located in the capital of the Democratic Republic of Congo, is Redefine BDL’s outlier in its portfolio.
“We have a commitment for the property with its owners,” Campbell said. He added that Africa is not yet a destination the company wishes to pursue.
“We’ve made a strategic decision not to explore Africa due to its challenges, which for us was that a few owners had not paid us,” he said. “Yes, Africa has potential but also potential problems.”
Guessing consolidation
Campbell said the recent consolidation in the hotel industry might affect owners if there are fewer brands in existence.
“With the Marriott/Starwood merger, no doubt Starwood will disappear on a corporate level, but what brands will they keep, and if (Marriott does) not keep the brands, what have they bought?” he said. “The challenge is where there are competitive brands. They will not offer both to potential owners. They need to help owners make the right decision.”
Redefine BDL manages Aloft and Westin hotels from Starwood Hotels & Resorts Worldwide’s portfolio and a Courtyard by Marriott.
“We see ourselves as a third-party management company aligned with owners,” Campbell said. “The two big things we make sure brands deliver for owners are fantastic loyalty and distribution.
“(Online travel agencies) will never disappear but (what’s) needed is a level playing field. Most of the delivery should be coming through the brand.”