Whitbread yesterday said it was getting out of the mid-range hotel market by selling its 11 Courtyard hotels, worth about £60m to the company, as it focuses on the budget and luxury hotels sector.
The disposals come as Whitbread continues its pursuit of Premier Lodge, the budget hotels chain that it is bidding for in a five-way auction. The chain, being sold by the Spirit Group, is expected to fetch more than £500m.
Whitbread, which owns a string of pub restaurant brands as well as the luxury Marriott hotels and cheap Travel Inns, yesterday said it had already received interest from a number of parties for Courtyard.
The group has been reviewing its property assets for some time. "Courtyard by Marriott is an excellent brand and these are good hotels that are trading well," Alan Parker, chief executive of Whitbread, said yesterday. "Our partner, Marriott International, is committed to developing the Courtyard brand in the UK. We will be working very closely with them during the sale process to ensure that we identify the best possible purchasers."
Simon Larkin, an analyst at ABN Amro, said yesterday: "This is a clearing-the-decks exercise which makes sense given their strategy to focus on the upscale market and the budget market. It is all part of Whitbread's strategy to recycle capital within the group, taking it out of non-core areas to invest in core areas. Even if they were not bidding for Premier Lodge, they probably would have sold off Courtyard." He expects the company to look to sell the hotel assets for at least £60m.
Whitbread's Marriott hotels have performed poorly for the group, however, and have dragged down its results amid a global slump in big-ticket tourism and business travelling. Whitbread has also been taking on management contracts for hotels owned by other companies using the Marriott brand, such as Royal Bank of Scotland's Victoria & Albert Hotel in Manchester.Reuse content