It's the end of an era for the Jurys Inn brand in the UK and Ireland and the start of an asset binge for Fattal Hotel group.
All 35 Jurys Inn hotels, a chain that dates back more than 140 years, across Ireland and the UK are set to become Leonardo Hotels, a brand under Israel's Fattal Hotel Group, which, along with Pandox, acquired Jurys Inn from Lone Star Funds in 2017 for £800 million.
At the time of the deal, Pandox bought the real estate and Fattal assumed operations under the Jurys Inn brand.
“The acquisition fulfills all strategic criteria regarding countries, cities and locations, as well as size, segment and profitability," said Anders Nissen, the late CEO of Pandox, at the time of the deal.
Lone Star originally was seeking as much as £1 billion for the portfolio, but came up short of the mark. It had acquired the Jurys Inn chain from a group of syndicate that included the Oman Investment Fund, Mount Kellett Capital Management, Ulster Bank, Westmont Hospitality Group and Avestus Capital Partners.
Fattal's brand family includes Leonardo Royal Hotels, Leonardo Boutique Hotels and NYX Hotels by Leonardo Hotels.
Leonardo Hotels UK & Ireland operates 51 hotels—46 in the UK and five in Ireland. With the addition of these hotels, Fattal's total portfolio grows to 145 hotels.
The company says that the rebrand is part of a wider strategy to expand across the UK and Ireland with potential sites cited including Dublin, Galway and Cork.
The rebrand was a matter of time, according to Jason Carruthers, managing director of Jurys Inn and Leonardo Hotels UK & Ireland. “We believe the most effective way to achieve our ambitions and growth plans for the business is to combine the key elements of the Jurys Inn operating platform with the existing Leonardo brand design and expanding reputation," he said.
Carruthers added that growth in the region would come in the form of acquisitions and new development.
Each former Jurys hotel is set to finish its transition to the Leonardo brand by the end of this year.
Spending Spree
Concurrent to the rebrand, Fattal announced it has raised €315 million to expand its portfolio citing the pandemic, which "has created an opportunity in Europe to buy hotel assets at attractive prices," according to the company's CFO, Shahar Aka.
The money was reportedly raised from Israeli institutional investors led by Harel Insurance Investments and Financial Services and Menorah Mivtachim Group.
Reports say that Fattal intends to use the raise to buy as many as 30 hotels in Western Europe, with a focus on Germany, Spain and the UK. The company said that it has already bought two hotels in Malaga and Majorca in Spain for €40 million.
Capital injection
Fattal has already spent sums of money to enhance its current portfolio. The company said that over the last four years it had invested just under £100 million in new openings and the refurbishment of a number of hotels, including 926 rooms across its Jurys Inn hotels in Croydon and Exeter, and Leonardo hotels at London Heathrow, Edinburgh Murrayfield and Leonardo Royal Hotel in Southampton.
Following its takeover of the Manchester Midland hotel in 2018, the group invested £13.9 million in renovations across the rooms and public spaces.
Fattal also outlaid £34.5 million to refurbish its hotels in central London, including the Leonardo Royal Hotels at London City, Tower Bridge, and St Paul’s and NYX Hotel London Holborn.
Future development
Beyond investment, Fattal says plans are progressing in Edinburgh’s Old Town for a new 125-room NYX Hotel next year and a 100-room extension to the rebranded Leonardo Hotel that it connects with. This spring, Fattal will open a new Leonardo Hotel in Manchester and has launched new Leonardo Hotels over the last year in Bristol and Chester.
Year-to-date gross operating profit per available room (GOPPAR) in the UK is £7.24,187 percent higher than at the same time a year ago, but 76 percent lower compared to the same period in 2019, according to data benchmarking firm HotStats.