This week's blog topics include: Could Russian hotel capital invested in the U.K. be under pressure? Does IHG have the clout to grow its latest high-end brand buy? And Poznań, Poland, might be the most delightful find within 150 minutes of Berlin.
Last week saw relations between the United Kingdom and Russia reach the lowest low since the Cold War, following U.K. government accusations that the Russian government (or rogue Russian elements) had for the first time used a banned toxic nerve agent on foreign soil.
Three people, including two Russians, remain in critical condition following the incident. Russian denies involvement.
This spat will continue, and one of the options the U.K. government has is to seize or freeze Russian assets held by certain individuals in London and the rest of the U.K.
That these could include hotels is highly likely.
It would be impudent to name hotels, but there is a lot of capital involved, I am sure.
Saying that capital from countries with less-than-stellar track records—or at least our perception of them as falling far short of our collected values—in human rights, political corruption and other facets might put the microscope on many real-estate assets.
The question here is will diplomacy smooth over the cracks, or will this be one incident the U.K. government sees it cannot ignore with half-hearted rhetoric and needs to follow up with severe measures?
IHG finds a brand to crown its pyramid
Last week saw InterContinental Hotels Group agree to buy 51% of Regent Hotels & Resorts, an über-luxury brand of six assets that IHG will now insert at the very top of its brand pyramid.
This, it seems to me, does not happen often. That is probably the nature of that type of product, with eye-watering average daily rates and a limited number of markets that can support them.
The Regent also has had a rich history since being formed in the 1970s, in part by famed hotelier Adrian Zecha, who at this month’s International Hotel Investment Forum in Berlin was interviewed on stage after picking up IHIF’s Lifetime Achievement Award.
It was at IHIF that IHG CEO Keith Barr said—without naming a company—his firm had bought a brand to be their highest in its segmentation.
Of course, everyone wondered what that might be? I got it hopelessly wrong, thinking it might have been Four Seasons or, because Zecha was there, Amanresorts.
Wrong, but there were connections to Regent. Maybe that is inevitable in the last 30 or so years, given the connections of Kevin Bacon Six Degrees of Separation hotel M&A. I heard others speculate it would be Belmond.
Four Seasons once owned Regent, and it had big plans to expand the brand, which once had approximately 20 or 25 hotels around the world but today has six, with four more in the pipeline.
Its previous owners, Formosa International Hotels Corporation, which retains 49% of Regent, also initially stated grandiose development plans.
The question here is does IHG have the clout where these other companies stumbled? I would guess IHG has no interest in adding only one or two properties every five years, but rather will want to have a more robust roll-out program.
And maybe Barr and Zecha did meet in some secret room at IHIF and through contacts saw the necessary route to thrashing out a deal and having it signed on the back of the IHIF program? Who knows?
The pull of Poznań
The weekend immediately before IHIF, I decided to jump on the train from Berlin to Warsaw and disembark at the small medieval Polish city of Poznań.
What a pleasant find.
The main, cobbled square of Stary Rynek features an ornate city hall that at midday sees two electronic billy goats emerge from above the clock and, turning toward one another, butt heads several times. This derives from a legend of two goats escaping the cooking pot.
I stayed at a wonderful modern hotel, Puro Poznań Staré Miasto, on the edge of the Old City and next to the former synagogue, the future of which still has not been decided, although I was told the diaspora is involved in talks. Most of Poznań was destroyed in World War II and has been since remodeled.
Guests’ plastic door keys operate the Puro hotel’s lounge espresso/latte machine.
This is the height of civilization, I would argue, especially in early March when the temperature was -13° Celsius.
The city also is home to a thriving craft-beer culture, but then I asked myself, where nowadays isn’t such a statement true? Still, the city does not, appeared to have a spot on every corner with very good local, small-batch beers.
And I happened to be in the main square when the St. Casimir parade was going on, or at least I think that is what I was watching. The event commemorates Polish-Lithuanian history, and it has been going on since the 17th century.
A king—he had on a crown at least—emerged from City Hall with others dressed in medieval finery. These soldiers and monks walked around the square before taking position on a stage. Later, young people in regional costumes joined the group, and there was much singing and participation—one of the songs included some actions that appeared to be pulling strands of cheese apart, and there was some kneeling, but this is all my imagination, and how wonderful it was not to have a clue as to what was being said or going on.
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