Hand Picked Hotels, the 18-strong group created by former City lawyer Julia Hands, wife of financier Guy Hands, with the purchase of seven hotels from Virgin, has narrowed its full-year losses to £7.3m, from £8.2m.
Group turnover increased by 1.5% to £59.2m, indicating an improvement in the UK's country house hotel sector. This has been particularly vulnerable to the downturn, given its focus on the UK provincial leisure and conference markets.
The group still holds debt of £99m, following the investment of £27m by Julia and Guy last year, but is continuing to invest in its existing estate in addition to looking for suitable acquisitions in the UK.
For country house hotel operators with money to invest, there have been opportunities for acquisitions now that improved trading fundamentals are encouraging banks at least to consider moving away from their ‘pretend and extend' policies.
Groups such as Legacy Hotels and Resorts have also benefited from owners looking to take on new management, with the group announcing in April that it had taken over Hollin Hall Country House Hotel in Macclesfield. The hotel had been run as an independent site by Clayton Hotels after leaving the Best Western network early last year.
Andy Townsend, CEO, said: "2011 has already been a busy period of growth for us. I anticipate being able to announce the addition of three new properties to Legacy Hotels & Resorts as full management contracts within the next few weeks and we are extremely positive for the coming months with our pipeline of new prospective projects having never been stronger.
"With some continued momentum over the next few months I also hope to be able to confirm us as operators for a number of sites which would be run by Legacy Hotels and Resorts yet under an international, branded franchisee agreement – it is quite conceivable for us to, by our various contracts, reach 2,500 guestrooms by the half year."
HA Perspective: With the likes of Hotel du Vin creator Robin Hutson entering the market, with Lime Wood in the New Forest, the country house hotel sector is moving on from the image of a gently decaying house offering afternoon tea and maybe golf. With the residential property market still subdued, the traditional exit for failing country house hotels – conversion into apartments – is less of an option than prior to the downturn, creating opportunities for the likes of Hand Picked to expand their portfolios.
For struggling independent operators, management groups such as Legacy are providing an alternative to selling. But the challenge will be in such management groups scaling up sufficiently to offer a long-term home for properties.