• Emerging markets prove attractive

Deal flow is increasingly demonstrating the importance of emerging markets to the international hotel industry with brand owners pushing hard to establish a presence in the key markets.

Hilton this week fleshed out details on its alliance in Russia with London & Regional Properties, and Park Plaza Hotels last week took a stake in Croatian hotel owner Bora.

Hilton has entered into a franchise agreement with a subsidiary of L&R which is set to create 25 hotels across Russia, including the first Doubletree which is to open by the end of the year in Novosibirsk, the third largest and fastest growing city in the country.

Park Plaza's 20% stake in Bora is costing Eu22.3m and is being bought from Goldman Sachs. Bora owns 74% of Arenaturist, which is listed on the Zagreb stock market, and 100% of three related companies. Together, these entities control eight hotels and five apartment complexes with a total of 3,000 keys.

A 20-year management agreement has been struck and a number of the hotels will adopt the Park Plaza brand.

The AIM-listed Park Plaza said last month that it increased EBITDA during 2007 by 24.4% to Eu28.4m from sales up 10.0% to Eu97.0m. It is targeting 8,000 rooms by 2010. It has franchised hotels in Doha and Marrakech and has a 50% JV with the property tycoons the Reuben Brothers to build London's first art'otel in Hoxton.

Hilton's announcement follows the news that the main shareholder behind Russia's Azimut Hotels is buying 20 three-star hotels in Central Europe that had formed the Austrian Hotel Company.

The chain, which is to be managed by Hamilton Hotel Partners, the advisory firm that currently provides asset management and other advice to Azimut's 3,000-room Russian portfolio, was bought for an undisclosed price

According to Hamilton's Frank Croston the deal will enable Azimut to benefit from the transfer of European hospitality practices and to establish its brand outside of Russia.

And in a further sign of ambition by emerging markets based operators Egypt's Orascom Hotels is to seek a listing on the Swiss stock exchange. The company has 21 hotels with just over 5,000 rooms.

The company's chairman and chief executive, Samih Sawiris, said he was moving the headquarters of the hotel and tourism business and creating a new vehicle Orascom Development Holding to access capital markets more effectively to fund expansion. The company last year received approval to build a resort in Switzerland.

Meanwhile, emerging market cash continues to be invested in hotels in the West. Last week Nakheel bought a half-share in Miami's Fontaineblau Resorts for $375m.

And Zabeel Investments, another Dubai-based operation, is gearing up to buy $1bn worth of US hotels. In February it bought a 50% stake in Las Vegas-based hotel manager The Light Group and it will make its moves through this vehicle.

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