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Whitbread and Arena turn to new markets
by Dan Coatsworth
Hotels are becoming more important to two leisure groups not immediately associated with property developments as they seek new markets. Costa Coffee and Beefeater restaurant group Whitbread and racecourse operator Arena Leisure have made plans to boost their hotel portfolios with the former going overseas.
Whitbread is arguably already a key hotel player with Premier Inn, yet the company has been best known for pubs and drinks, despite moving out of brewing in 2000. Premier Inn now accounts for 44% of Whitbread’s annual sales, having added 3,400 rooms in 2007 to total 36,000 rooms. Chief executive Alan Parker said: ‘The growth prospects in the UK and overseas are compelling.’ It plans to increase the business by 50% to 55,000 rooms by 2013.
Whitbread last month opened its first hotel outside the UK – in Dubai. A joint venture Emaar-MGF will see 80 hotels with a combined 12,000 rooms in India within ten years. It is halfway through a £13 million rebranding for Premier Inn, is spending £100 million on three new London hotels as part of plans to be the biggest chain in the capital for the 2012 Olympics, with at least 8,500 rooms.
Arena’s new turf
Antony Harris becomes Arena Leisure’s finance director today (1 May, 2008) having been vice president for finance at Hilton International and before that with Inter-Continental Hotels. The horse racing specialist said Harris’s experience would be ‘invaluable’. It recently gained planning permission for three hotels in Doncaster, Lingfield and Wolverhampton racecourses. Bob Mercer will continue as chief financial officer, despite Harris’s addition.
The racing industry is going through hard times, with average attendance per fixture having fallen 18.8% so far in 2008. Arena reported 50% more people visiting its courses, but this is distorted by the re-opening of its Doncaster Racecourse, which was shut for a £34 million redesign between January 2006 and August 2007. Stripping out Doncaster, attendance figures have been roughly flat.
Arena plans to use the hotels to give punters more reason to use its facilities than just horse racing. The £23 million Wolverhampton redevelopment has planning permission for a casino, but still awaits Parliament’s approval for the creation of new casinos in the UK. Work will begin on the Lingfield Park hotel development this month, and on a hotel and residential development at Doncaster in early summer.