Case Studies

Turnaround Case Study

The Legacy Cardiff International Hotel

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Background and Timelines

February 2009 – Former Quality Hotel Cardiff closed by Administrators of Real Hotel Company. Hotel not secured correctly – Extensively vandalised and looted. Danish investment management company appoint Colliers International to conduct an operator selection process.

May 2009 – Legacy Hotels & Resorts appointed by Habro Properties – Danish owners of the hotel to put together a business recovery and re-opening plan for the hotel.

Business recovery plan with £550k investment submitted by Legacy Hotels & Resorts along with a comprehensive business plan and 5 year projections for the hotel. Agreement concluded with Habro for the management contract and business recovery plan.

June 2009 to September 2009 – Extensive delays in negotiating lease surrender with BDO.

15 September 2009 – Legacy Hotels & Resorts finally gain access to site.

November 2009 – Hotel re-opens after a 7 week program. All bedrooms have had the benefit of a selective improvement program and all public areas have been re-furbished. Despite being hit by unbudgeted costs in the region of £30k, Legacy Hotels & Resorts still manage to bring the project in on time and broadly within budget.

July 2010 – Nine months after re-opening, the hotel has re-established itself firmly in a fiercely competitive marketplace. Occupancy for the month of July 2010 was 74.6% with sales of £105k and a GOP percentage of 17.6%. Hotel has secured the TV crew contract for European Tour Productions’ Ryder Cup coverage with a value of £86k. Investors and secured lender now see a way forward for a hotel that had a bleak future in February 2009.

Forward picture – Despite having to rely on rate led leisure and groups and tours business for the early part of 2010, the hotel has now established a market position in the key market segments. Corporate accounts now producing for the hotel include GE Healthcare, University of Glamorgan and HID Global. In the conference segment, a major piece of business has been won from Scottish and Southern worth £110k a year to the hotel. The hotel has also started to secure local wedding and function business with 5 weddings booked for 2011. September 2010 is forecasted to be a record month for the re-established hotel with sales of £150k and GOP percentage of 33%.

The above demonstrates Legacy’s commitment, drive and resourcefulness to deliver projects on time and within budget in the face of particularly challenging circumstances.

Client references available on request.


 

Turnaround Case Study

The Llangoed Hotel

Back of Llangoed Hall

Background and Timelines

February 2009 – Sir Bernard Ashley, owner of The Llangoed Hall Hotel and formerly, Chairman of Laura Ashley Plc passes away aged 82. Executors for the Estate appoint Christie & Co to market the hotel for sale.

September 2009 – Legacy Hotels & Resorts Limited approached by Christie & Co to operate the hotel. Objectives are to quickly drive an improvement in the operational and financial performance of the hotel to maximise the sales proceeds.

October 2009 – Legacy appointed by the Estate to operate the hotel on a rolling 3 month management contract.

November 2009 – Hotel inspected by the AA and awarded 85%, 4 star rating and 2 rosettes for food.

January 2010 – Trading for the first 3 month period shows sales growth of £26.5k and profit growth of £23.2k on prior year.

February 2010 – Latest rolling 3 month forecast shows sales growth of £62.1k and profit growth of £29.4k.

October 2010 – Last full month of Legacy management. In 12 months, Legacy had delivered incremental sales growth of £45k and profit growth of £161k, including procurement rebates.

November 2010 – Hotel sold to Von Essen Hotels for an undisclosed sum. Legacy awarded a discretionary bonus by the Trustees of the Estate for their efforts during the contract.

The above demonstrates Legacy’s ability to take a sub-optimal existing business and rapidly drive the performance forward towards an optimal level of performance with the primary objective of maximising the disposal proceeds.

Client references available on request.


 

Turnaround Case Study

The Legacy Rose & Crown Hotel

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Background and Timelines

September 2006 – London and Edinburgh Inns Limited (Swallow Hotels) goes into administration.

November 2006 – Legacy Hotels and Resorts Limited begin to operate the Hotel on a three year management agreement for Ciel Properties Limited who previously leased it to Swallow Hotels.

Fabric of hotel showed all the signs of a property traded towards administration. Fixtures and Fittings were purchased from EY for £5k.

Hotel Turnover was £700k and Loss after Rent was £246k

Hotel was rented by Swallow for £280k per annum.

Occupancy – 47%

Average Room Rate – £45.23

July 2007 – Year End for Ciel Properties Limited.

Occupancy – 75.1%

Average Room Rate – £49.27.

Nine Month Turnover – £590k

Operation stabilised and trading performance moving forward. Occupancy driven forward on the back of improved service standards and Legacy sales and marketing function.

January 2008 – Based on trading performance to date £550k full refurbishment of the hotel commences. Completed on budget by April 2008. Hotel open for trading and generating positive cashflow throughout.

July 2008 – Year End Numbers – Adjusted for disruption costs of refurbishment project.

Turnover – £978k

Operating Profit – £154k

Occupancy – 76.8%

Average Room Rate – £55.24

September 2008 – Planning application submitted by Ciel Properties Limited for twelve bedroom extension to the hotel. Approval obtained 4 December 2008.

October 2008 – Based on trading to date plus forecast ROI for £550k investment is 18.9%.

Occupancy – 86.5%

Average Room Rate – £58.32

Operating Profit Percentage – 17.7%.

May 2009 – The hotel is successfully rated by the AA as a 4 star hotel, the first time ever in its history making it Salisbuyy’s first 4 star hotel.