• Aprirose launches operating platform 

Real estate investment company Aprirose has launched its own hotel operating platform, with initial assistance from Kew Green Hotels.

Aprirose said that it was looking to growth both in the UK and internationally, with hotels under a variety of brands.

Kew Green Hotels will provide systems and support while the new service is established.

Aprirose operates across a number of sectors, last month acquiring a 22-strong Marston-branded pub portfolio from property investor, manager and developer New River, for GBP15m.

Fifteen of the pubs from the portfolio will be leased back to Marston. The portfolio was comprised of assets located across the UK including the Midlands, Yorkshire and the Humber, North West, Wales and the South East.  The acquisition will bring the total number of pubs in Aprirose’s portfolio to 94.

Last summer also saw the group acquire a site on Dalston’s Kingsland Street for the development of a GBP40m aparthotel. Aprirose appointed Saco Property Group as development manager to oversee the build through to practical completion and operate the finished scheme under a management agreement.  The aparthotel will be run under the Locke brand.

The decision follows a growth period for Aprirose hotels since the acquisition of the QHotel portfolio for GBP525m in 2017. The most-recent acquisition saw it pay GBP24.2m for the Theobalds Estate Hotel in Cheshunt in December. The 140-room property was acquired from Starwood Capital.

Tim Shearman was appointed as CEO of Aprirose Hotels in June last year, joining from London & Regional where he was COO of hotels, prior to which he was VP, asset management for Westmont Hospitality Group with responsibility for European hotels. He also worked at Kew Green Hotels leading its operations strategy.

Aprirose’s hotel assets now total 25 under a number of international brands from the major franchises, including Hilton, Marriott, Accor, plus its own QHotels brand. The QHotels are currently undergoing asset management and modernisation, with the rebrand of seven of the hotels, the launch of five Doubletree by Hilton last year and two Delta by Marriott due in early 2019.

Shearman said: “The creation of our own hotel operating platform is an exciting new development in the growth and evolution of our hotel portfolio as we have further expansion plans nationally and internationally. It demonstrates our long-term commitment to the sector and will allow us to recruit industry leading talent and drive value for our clients. By initially working with the experienced Kew Green Hotels team it will allow us to hit the ground running and offer a seamless and best-in-class service to our customers.”

Alex Pritchard, CEO, Kew Green Hotels, said: “We are delighted to have partnered with Aprirose in the establishment of their new operating platform. These additions are part of our continued strategy to grow our managed division, alongside our owned estate, with a target to reach a portfolio of in excess of 100 hotels.”

Aprirose bolstered its hotels team at the end of last year with the appointments of Kym Kapadia as chief commercial officer and Bastien Anouil as asset manager.

Kapadia joined from Michels & Taylor, where she was a founding partner and board member for 11 years.  Anouil joined from Columbus Hotel Monte Carlo where he was general manager, having worked at the company for almost eight years.

Aprirose was not alone in looking to the potential of an operating platform. Interstate Hotels & Resorts used the ALIS conference to underline its global ambition, describing “monumental strides”  in continental Europe last year, where it described itself as “the only dedicated hotel management services company with the global scale and a comprehensive pan-European operating platform”. Developments in 2018 included a new regional office in Amsterdam, expanded management offerings in The Netherlands and Belgium and the company’s first entry into France.

“2018’s successes allow Interstate to start 2019 with a strong lead,” said Mike Deitemeyer, president & CEO of Interstate Hotels & Resorts.

HA Perspective [by Katherine Doggrell]: I know what you’re thinking: “Why don’t I have an operating platform when all the cool kids have them?” And yes, this does appear to be the week of the hotel operating platform, you’re no-one without one.

The move marks an ongoing shift from the early days when it all looked too much like hard work to wrangle all those beds, all that cleaning, all that revenue management to a point where the owners have realised that if they want to make sure someone is looking after their investment and not just thinking about how they really must target Peru for their next 100 hotels, they are better off doing it themselves.

What will prove interesting for platforms such as Aprirose is whether they are are just in it for themselves or whether they open them up to all comers and build an empire that way.

Additional comment [by Andrew Sangster]: Is this finally the answer to the long tail problem of hotel assets? By this, I mean is there now a solution under which the various small groups of hotels in the three- and four-star space in the UK can be gathered together under one manager?

For the past couple of decades there have been repeated attempts to consolidate these disparate groups into one mega chain that numbered in the three digits for total properties. But the diversity of the portfolios and the diversity of the individual assets meant that a solution could not be found.

There was no single brand or group of brands under which all the assets could be easily badged and similarly there was not a single owner for whom owning such a diverse range of assets made sense.

The separation of the hotel vertical into asset, management and brand – dubbed the bricks, brawn and brain split – means that the much-heralded consolidation can now come to pass.

It remains a pick and mix type of affair, with different owners plugging into different managers who in turn plug into different brands. But the point is that there are, in total, fewer owners, fewer managers and fewer brand companies (note I’m not saying brands here).

The bricks and brains separation enabled brand owners to grow quicker through management and franchising. Now these same brand owners are quickening their pace in Europe by mainly focusing on franchising.

The emergence of a new class of white label or third-party operating companies is facilitating this push into franchising. And looking beyond the UK into lease orientated markets, third-party operators with sufficient covenant can further push forward the brand owners franchising ambitions.

In such a fast-developing market, there is some confusion between these disciplines. Asset owners feel the need to have their own operating platform and sometimes asset managers, working on behalf of owners, push into this space too. It’s not clear that this is always a wise idea. Breaking out of your swim lane is going to disqualify you from racing alongside certain other players.

So, for example, asset managers who move into operations will find themselves in a conflicting environment the next time they sit down with a brand owner that is also a manager. Owners focused on owning, operators focused on operating, and brand owners focused on branding helps make it clear who is a partner and who is a competitor. Business is never going to be that simple but trying to be both a partner and a competitor will create challenges.

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