View from City Road: No solution to Forte's problems

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The Independent Online
You've heard of Forte Grand. Now here's the Forte Bob. Rocco Forte is 'repositioning' the more downmarket part of his Heritage hotels portfolio into a new 'brand' called County Hotels. The process might best be described as attempting to dress mutton as lamb, but it seems a good try nevertheless.

The market has long known Forte wants to get rid of a sizeable chunk of its estate, at the cheaper end, to help relieve pounds 1bn-plus of debts. The problem is that the hotels sector has been sandbagged by the recession and full prices have been scarcer than successful stock market flotations.

Forte is taking around 60 of the one and two-star Forte Heritage hotels and hiving them off - together with 20 unbranded outlets - into Country Hotels.

The hope is that this is a better way of achieving value than through piecemeal sales. With luck the new company might be capable of attracting third party capital. Alternatively, it might be floated, sold outright in a trade sale or put into a joint venture.

Either way it would leave Forte better placed to pump money into the remaining more traditional and leisure- orientated Heritage chain. The addition of some Forte Grand hotels to the remaining Heritage outlets will underscore this concentration on quality.

Not that this will be a solution to the group's pressing money problems.

Notwithstanding the strong recovery in hotel profits, the suspicion remains that Forte will have to tap the market for cash soon.

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