A London-based hotel ownership firm known for its expertise in airport hotels is growing its portfolio with a landmark brand deal.
Through a new partnership with French economy brand B&B Hotels, Arora Group has opened the 119-room, newly converted Colnbrook Hotel London Heathrow Airport as B&B's first hotel in the United Kingdom. B&B Hotels has more than 770 hotels in 17 European countries, opened approximately 75 hotels in 2023 and plans to have 100 hotels in the U.K. by 2030.
Arora Group has 12 open hotels, nine of which are 300-room-plus airport hotels spread across London in proximity to Heathrow, Stansted and Gatwick airports. It also has two country-house-style hotels and one premium London luxury hotel.
Arora Group Chief Operating Officer Sanjay Arora said having a newly converted airport hotel — albeit one that's smaller in room count than its other airport hospitality properties — is a way the company is diversifying its portfolio. B&B Hotels has signed a 30-year lease at the Colnbrook Hotel London Heathrow Airport — previously known as the Arora Park Hotel — which was formerly a Holiday Inn but debuted in 2001 as a hotel solely for employees of British Airways.
“We were going to open it again with a different brand, but we said, let’s focus on the larger assets, the partnership with B&B Hotels being an absolutely perfect way of allowing us the time to focus on our key assets. It is a long-term lease with a very reputable name in the sector,” Arora said. “We are very proud to be doing the first [B&B U.K. hotel]. We hope to do a lot more with them.”
Arora said he was excited by B&B Hotels’ ambition and business model and then formed an excellent relationship with several B&B Hotels executives, including Kevin Murray, the company's managing director of development in the U.K.
“He knows budget [hotels] very well and is ex-Whitbread PLC during the real serious growth of Premier Inn. Arora had done five or six Premier Inns before I joined,” he said.
The type of deal is something Arora said his company would continue to consider.
“This model of doing more leased hotels is about de-risking, offloading operational components to someone else who is reputable. [B&B Hotels] is backed by Goldman Sachs. I am keen to do more with them,” he said.
Arora said airport hotels have changed since Arora Group was founded in 1999 by his father, Surinder Arora. Now, airports have many more budget and economy hotel offerings.
“Our Sofitel London Heathrow hotel at the airport’s Terminal 5 has 605 rooms and 45 meeting rooms, but the beauty of it is that it is the only linked hotel to the terminal. Most of our hotels are terminal-linked or as close as you can possibly be. 2023 has been our strongest year since the business started,” he said.
With its hotel footprint firmly established at London's Heathrow Airport, Arora Group aspires to grow elsewhere, Arora said. The firm's portfolio has approximately 7,000 rooms and executives hope to grow it to 10,000 rooms by 2030, he added.
“We have established ourselves as one of the best airport hoteliers at all the major airports in the U.K. At those, we have all the bases covered, so the focus now is on finding new ways of growing the business,” he said.
Arora Group is also growing outside the U.K. with its first airport hotel deal in Ireland. In 2021, the company announced plans for a 410-room hotel at Dublin Airport linked to Terminal 2.
“It will be the only linked airport hotel there, and there are a lot more flights going from Ireland to the U.S. due to the ability to complete all U.S. pre-immigration checks,” Arora added.
The type of hotel model the firm was built on remains vital, Arora said.
“We have a very strong foundation. It takes years to build up a reputation, which ultimately gives you opportunity and accessibility to better deals and partners,” he said. “It is business as usual. Airports are back to 85% capacity, and we’re betting on events coming back. You cannot do a 1,000-person zoom call,” he said.
But look for Arora Group to diversify the types of hotels and other forms of real estate in its portfolio, Arora said.
“My goal is to diversify the business in different directions. Of the 10 or 11 deals we have recently done, all have been non-core-hotel focused, such as luxury country hotels, golf courses and shopping centers,” he said.
Company executives also see long-term value in holding Arora Group's U.K. hotel assets with no plans to sell in the short term.
“We believe in the U.K. hotel business and in building solid foundations in key locations for the future generations to hold,” he said.
Teeing Off
Among its current development projects, Arora Group is converting the Luton Hoo Hotel, Golf & Spa, just north of London, into an Accor-affiliated Fairmont brand. This will be Arora Group's second Fairmont in addition to The Fairmont Windsor Park, which was a conversion of the Savill Court Hotel & Spa.
“We have a fantastic partnership with Accor and are pleased that this will be the second Fairmont within the group,” Arora said.
With the renovation of the Luton Hoo Hotel, Arora Group hopes to host the 2031 Ryder Cup at the resort, Arora said.
“We are on the shortlist. We had to present a significant bid application, and the decision is between us and one other entrant. My dad and I are avid golfers. We are planning on investing more than £100 million ($123.6 million) to make the property the best countryside retreat in the U.K.,” he said.
There are also major changes happening at Arora Group's 453-room InterContinental London The O2 in the Greenwich area of London. The InterContinental is the company's only hotel property located to the east of the center of London.
Its former underground car park has been converted into a 1,700-person ballroom to complement its existing 3,000-person space to better serve the area around The 02 Arena itself, which Arora said is nearing full capability, too.