Although the group owned the Lancaster until 1994, it has not previously had a significant presence overseas. Mr Pajares said it would seek underperforming hotels with similar characteristics to the Savoy. In return for underwriting the costs of refurbishment, the group would pick up an equity stake and take on the management contract.
Although there would be no plans to change the local name of the hotels, the group would benefit from the Savoy brand name, Mr Pajares suggested. "With the value of the brand name, a brand which we cannot put in the balance sheet, and given that technology will make brands even more important, this is a tremendous opportunity we have to develop."
The international chain, to be built up over five or six years, would allow overheads to be spread, better utilise the Savoy's international marketing effort and give the opportunity to create a central reservations system. Given the increasing opportunity afforded by technology for guests to make their own bookings, a familiar international brand name like the Savoy would become increasingly valuable, he suggested.
The news came as the Savoy group, currently including the Savoy Hotel, The Berkeley, Claridge's and The Connaught, reported an 84 per cent jump in pre-tax profits to pounds 7.71m in the six months to June. The figures reflected the benefits of a pounds 72m refurbishment programme, principally at Claridge's and The Savoy, which helped the four London hotels raise their occupancy rates to 86.4 per cent. Average room rates rose a further 5 per cent in the first half, after an 18 per cent increase last year.
Granada, which has said it wants to dispose of its 68 per cent stake in the group inherited from last year's Forte takeover, has told Mr Pajares it is "not in a hurry" to sell the shares in the light of the improving performance.Reuse content