He added that would-be buyers, whose initial bids were received last Friday, would be given six to eight weeks to review confidential documents and visit hotels before a final list of five or six bidders was established.
"We expect to have all the sales completed by December," Mr Allen said. "There has been a huge level of interest, and already we have had indications that bidders are prepared to pay a premium for these properties."
He declined to discuss individual amounts for each hotel, or to confirm the names of potential buyers. Speculation has centred on hotel groups as well as wealthy individuals, such as the reclusive Barclays brothers.
According to documents seen by the Independent, the Grosvenor House is expected to raise at least pounds 300m on its own. Granada is forecasting pre- tax profits at the flagship luxury hotel of pounds 33m in 1998/99, compared with about pounds 24m this financial year. Nightly yields are expected to rise to pounds 160 a room from the current pounds 112, under a profit enhancement plan.
The information is contained in the confidential sales memorandum sent out to 70 potential bidders. Granada declined to comment on the details.
The hotels disposal programme is part of Granada's plan to sell off unwanted assets gained when it won its hostile pounds 3.9bn bid for Forte earlier this year. In addition to the Exclusives, which include the Hyde Park Hotel, the Westbury hotels in London and New York, and Brown's, Granada is also selling Forte's 21 Welcome Break service areas, its 68 per cent stake in Savoy Group and its 25 per cent holding in Alpha Airports.
Analysts said yesterday that the pounds 1bn figure for the Exclusives was achievable, although one cautioned that Granada's own profits forecasts for the properties depended heavily on the hotels cycle. "Changes in Government policy on interest rates, an increase in terrorism, a fall in tourism - all of these could affect the profit," said one leading leisure analyst.
Mr Allen said the company was confident of being able to sell all the earmarked assets within the next 18 months, as previously stated. The Savoy stake will probably take the longest to sell, he added, because of the need to work closely with existing management to find a suitable owner.
He reiterated that a trade buyer was the most likely bidder for the Alpha stake, although he assumed that any deal would be accompanied by a bid for the whole company.
Granada has produced profit enhancement plans for all the Exclusives, and is working with general managers to increase yields. According to the sales memorandum, the Westbury Hotel in New York is forecast to drive profits from about $4m to about $8.2m by 1999, with nightly revenues per room rising to $191 from $152. The Hyde Park Hotel is expected to see pre-tax profits rise more modestly, from about pounds 6.9m currently to about pounds 9.4m by 1999.
Granada has also introduced higher prices and additional services in its Travelodge budget hotel chain, which the company intends to keep. Mr Allen confirmed yesterday that the higher prices initially pushed occupancy levels down by up to 4 percentage points, although he said these had recovered, even as yields have increased.
It also emerged yesterday that Granada is in negotiations with its banks to lower the financing charges on certain Forte properties, including the leaseback arrangements at the Travelodge hotels.Reuse content