Sir Rocco Forte secures future of his hotels with new bank loan
Sir Rocco Forte confirmed this week that a new financial arrangement to ensure the future operation of his 13-strong luxury hotel company had been secured.
"We have agreed a new facility with the Halifax Bank of Scotland (HBOS), with whom we are very pleased to continue to have a strong and supportive relationship," said Forte, chairman and chief executive of the Rocco Forte Collection.
The company and the bank agreed the new terms, involving the extension of a £300m loan at a higher rate of interest, following a fall in occupancy and room rates throughout the group's hotels as a result of the global financial crisis.
Business declined significantly after the collapse of Lehman Brothers in 2008 and, at the worst point in 2009, occupancy at the hotels fell by 25%. However, since December 2009 business has begun to pull ahead of the same period in 2008.
The Rocco Forte Collection is currently considering offers for the purchase of the freehold of Le Richemond hotel in Geneva, which it would continue to operate under a management agreement.
"It makes sense for us to reduce our debt in the current climate," said brand managing director Richard Power. "We have been cautious in the past about selling the freeholds of our properties until the name of the Rocco Forte Collection had become recognised as a strong global brand. We have now reached that position."
Power said the company would see what happens with Le Richemond before considering selling the freehold of other hotels within the group.
Jonathan Perrin, partner and head of hospitality and leisure at Vantis said that Sir Rocco had taken the right decision in talking with his bank about the way forward.
"That Sir Rocco's hotel businesses have been suffering will be of no surprise to anyone in the hospitality sector," Perrin said. "Everyone we talk to tells us that cash-flow is their biggest concern, whatever the size of the company."
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Rocco Forte Hotels seeking new long-term partner >> By Janet Harmer
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