Activities

Thistle operates 50 hotels in the UK, of which 31 are managed for Atlantic hotels, two are managed for other parties and the rest are owned or leased.

The company is the UK’s sixth-largest hotel group by bedroom numbers and the biggest player in the London market, which accounts for 6,000 of its 10,000-plus bedrooms.

The group operates in the four- and five-star sector. In late 2004, it unveiled its new global deluxe brand, Guoman, with the reopening of London’s Cumberland hotel after a £95m facelift.

Timeline

• 1960s: Mount Charlotte Investments enters the hospitality sector in the early 1960s by buying several hotel, pub and restaurant businesses.
• 1965: Thistle Hotels is set up by brewer and pub operator Scottish and Newcastle, bringing together traditional S&N hotels and a number of flagship purpose-built hotels in regional cities.
• 1970s: Mount Charlotte sells its pubs and restaurants in the late 1970s to focus on hotels, buying almost 50 properties between 1978 and 1988. Robert Peel becomes chief executive in 1978 and turns a £1m-a-year loss into a £38.8m profit by 1989.
• November 1989: Mount Charlotte buys 34 Thistle hotels from Scottish & Newcastle for £645m to become the UK’s second largest hotel group after Forte. It also acquires the Thistle brand name.
• 1990: Increased debt from the acquisition forces the sale of Mount Charlotte to New Zealand-based Brierley Investments for £664m.
• 1991: Brierley sells 20% of its investment to the Government of Singapore and 10% to Tamasek Holdings, leaving it with a majority stake of 46%.
• 1996: Thistle floats on the London Stock Exchange at 170p per share.
• 1997: Chief executive Robert Peel resigns after failing to meet profit forecasts.
• April 1998: Ian Burke takes on the role of chief executive in April, when the group has 91 hotels and is in £1.5b takeover talks with Nomura. The talks collapse three months later when Nomura drops its offer.
• 1998: Thistle sells 30 provincial hotels to Grace Hotels, a subsidiary of investment bank Lehman Brothers, for £62.7m.  They are managed by Peel Hotels and are gradually sold off, with the last three acquired by Peel Hotels in 2005.
• 2002: Thistle sells 37 regional hotels to Orb Estates of Jersey for £598m, but retains the management contracts at the hotels. The deal degenerates into a series of legal wrangles over payments and the spectre of a bid from Orb. In 2003, the properties are sold to Atlantic Hotels for £700m.
• 2003: Singaporean investment company BIL International, Thistle's majority shareholder, launches a hostile bid of £555m in March which is rejected. However, an improved offer of £627m is accepted in May. BIL takes over the company in June and ousts five top directors.
• June/July 2004: Thistle sells two London hotels to Travelodge owner Permira for £55m in June and puts six hotels on the market in July.
• October 2004: Thistle opens the 1,020-bedroom Cumberland hotel in London, the first of its deluxe Guoman brand. In spring 2005 celebrity chef Gary Rhodes takes over the hotel’s dining with Compass division Restaurant Associates. By the end of the year, Thistle has established sales and marketing alliances with Affinia of New York, First Hotels in Scandinavia, NH Hoteles of Spain and Meritus of Singapore. In July 2005, it added Rotana hotels in the Middle East.
• January 2005: Thistle offloads the management contracts for five country house hotels owned by Atlantic.
• May 2005: Thistle sells six hotels to Topland in a £185m sales-and-leaseback deal based on 30-year leases.
• July 2005: Malaysian billionaire-tycoon and Thistle chairman Quek Leng Chan puts in a £550m bid for Thistle after increasing his stake in the company to more than 30%. He lodges a conditional cash offer in August through High Glory Investments.

Operating data

Number of hotels: 50, one under the Guoman brand

Number of employees: about 5,000

Thistle results for the year to 30 June 2005

Total turnover: £287.1m (2004: £279.3m)
Turnover for London hotels: £165.2m (2004: £162.4m)
Turnover for provincial hotels: £121.9m (2004: £116.9m)

The turnover figures exclude the 33 managed properties, along with the Cumberland hotel and the two hotels sold to Permira in mid-2004.

BIL hotel figures for the year to 30 June 2005

Turnover: $300.4m or £166.2m (2004: $266.6m or £147.5m)
Profit before depreciation and amortisation: $148.5m or £82.1m (2004: $101.3m or £56m)

London hotels:
Occupancy: 78.8% (2004: 81.5%)
Average room rate: £80 (2004: £73.8)
Revenue per available room (revpar): £63 (£60.2)

Regional hotels:
Occupancy: 68.5 (2004: 67.2%)
Average room rate: £57.1 (2004: £55.2)
Revpar: £39.1 (2004: £37.1)

Total group hotels
Occupancy: 74% (2004: 74.8%)
Average room rate: £70.1 (2004: £66)
Revpar: £51.9 (2004: £49.4)

Strategy

"Our vision for Thistle is to be a full-service, four- to five-star hotel management company in key gateway locations, offering excellent product and service to our customers and superior financial returns to our hotel owners."

Source: BIL final results statement, 31 August 2004

Chief executive

Tim Scoble

Key directors

Chairman: Quek Leng Chan
Chief financial officer: Mike O'Mahoney
Group sales and marketing director: Stuart Leven

Contact

Victoria Thistle Hotel
Buckingham Palace Road
London
SW1W 0SJ

Tel: 0870 413 5602

Website: http://www.thistlehotels.com

Commentary

Ownership questions have overshadowed Thistle for many years, with constant speculation that BIL was looking to offload its majority stake. Things reached a head in 2002 when a sale-and-leaseback deal with Orb Estates sparked a series of legal wrangles and a possible takeover by Orb and in 2003 when BIL launched a successful hostile takeover.

Just when things seemed to be settled, Thistle’s chairman submitted a bid in mid-2005 after upping his stake in the company to more than 30%.

BIL’s takeover was underpinned by its belief that the company had underperformed since its 1996 flotation and, not for the first time, it installed a new management team.

Since the BIL takeover, Thistle has disposed of non-core properties and upgraded and modernised its properties in a bid to regain the more upmarket position it held a decade ago. As chief executive Amarsi explained in 2004: “We want to be in the four- to five-star sector instead of the three-and-a-half to four-and-a-half range where we are.”

Spearheading this drive was the launch of the Guoman brand (meaning ‘international gateway’ in Mandarin) when the flagship Cumberland hotel reopened in London’s Marble Arch in October 2004 after a £95m refit. 

The Guoman name will be used on a line of upscale international hotels in major cities that could in time see Thistle make its overseas debut. Meanwhile, The Royal Horseguards and the Tower, Victoria and Charing Cross Thistles in London are all earmarked for conversion to the new brand.

Since December 2003, Thistle has been busy forming marketing alliances with a number of overseas brands. They include Singapore-based Meritus (which has 13 hotels in the Far East), First Hotels (with 61 Scandinavian properties), Affinia hospitality (nine New York hotels), Rotana (13 hotels in the Middle East) and Spanish giant NH Hoteles.