Investment Strategy
Having a well-defined investment strategy is indispensable for hotel investors due to several key factors within the hotel investment landscape.
Firstly, the intricacies of hotel investment, being a subset of real estate, demand a strategic approach to navigate through dynamic market conditions. Effective pricing strategies, considering metrics like Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and occupancy rates, are integral components of a successful investment strategy in the hotel industry.
Furthermore, a comprehensive investment strategy considers various aspects of hotel operations, such as revenue management and asset management. This approach ensures that the cash flow from the hotel business is optimised, contributing positively to the bottom line. Secondly the type of hotel and its market positioning are crucial considerations. Whether it is a boutique hotel, a full-service establishment, or one associated with a well-known hotel brand, aligning the investment strategy with the specific characteristics of the property enhances the likelihood of success.
We understand the hospitality industry’s trends and guest preferences that are vital for creating a guest experience that attracts bookings and, consequently, maximizes returns on investment. Additionally, keeping an eye on market conditions helps identify investment opportunities, whether it involves developing a new hotel or adding value to an existing one.
For hotel investors, collaborating with a reputable and experienced hotel management team is part of a sound investment strategy. This partnership ensures effective day-to-day hotel operations, contributing to sustained profitability.
In the broader context of real estate investment, hotels represent a unique asset class. Therefore, tailoring the investment strategy to the distinctive features of hotel real estate assets, including considerations for business or leisure travellers, types of hotels, and market demand, is crucial for long-term success.
Our investment strategy in the hotel industry considers a spectrum of factors ranging from market conditions and real estate assets to guest experience and revenue management. By addressing these elements, we can position ourselves to make informed decisions and we can capitalise on the diverse opportunities within the dynamic hotel investment landscape.
Asset Acquisitions Focusing on the South and Southwest
We seek acquisitions that generally take the form of whole ownership of primarily freehold assets, but we will consider exceptional hotel properties with leaseholds on favourable terms. Our targeted businesses are typically between £2million - £3million, but we will selectively purchase assets requiring both smaller and larger commitments primarily in the South and Southwest of England.
Our own analysis supported by Savills and Knight Franks advise that the South and Southwest regional hotel markets are performing exceptionally well, driven by consumer demand for staycations. The Agents believe that after an acceleration in demand post the pandemic, that this will continue as holidaymakers seek out more environmentally friendly and sustainable holidaying, a trend that was emerging pre-Covid. James Greenslade, Director in the Hotel Capital Markets team at Savills comments: “The Southwest has some of the best holiday locations in the UK and investors are drawn to locations such as Cornwall and Devon where long-term demand for leisure-led hotels is expected to be high.”
A standardised big-box branded hotel might be a compelling investment, but guests can be quick to switch to the hot new property that opens down the street. We avoid being in this position by future proofing our hotel investments by carefully selecting locations and assets that have a competitive advantage such as historical associations, a memorable location or architectural features, as well as a strong built in micro location demand near to the hotel.
Renovation / Repositioning
Existing hotels in desirable locations that are in need of renovation and/or market repositioning. These hotel properties are well located but are failing to perform to their full potential due to a combination of their physical state and management and/or brand affiliation.
Asset Consolidation & Adaptation
Identify assets and/or subdivision in whole or in part of acquired hotel properties that can be disposed of at a premium to offset refurbishment/redevelopment costs. Hotel buildings that have underutilised areas that are suitable for conversion or can be repurposed into additional bedrooms and or other profitable income generating spaces, ie conference space.
Operational Enhancement
Imolott Limited will seek existing hotels in generally good physical condition that will benefit from our rigorous approach to asset management and a change in management.
We seek those potential assets that are poorly run hotels that have plenty of opportunity for improvement. Hotels that may have outdated technology, tired rooms or management that has become stale for instance, with underutilised real estate spaces that offer new opportunities to boost revenue and profits.
Authentic experiences
The rise of Airbnb has tapped into a growing aspiration to live like a local and experience the best that any given destination has to offer. Hotel guests are placing increasing value on experiences over the amenities of their accommodation, and boutique hotels deliver perfectly against this. With their smaller size and passionate owners – boutique hotels offer that personal and authentic experience for guests but with the safety and flexibility of a hotel. This authenticity is a key part of Imolott Limited strategy with a product offering of budget boutique hotels that differentiates us from the hoard of bland mid-market hotel properties that are increasingly being squeezed by the budget and luxury hotel offerings, yet still have an ever-increasing high operating cost base.
Despite being priced more competitively, our budget boutique hotels will share most of the features of their pricier counterparts yet maintain a personal, professional, friendly, and authentic offering yet with a reduced and more efficient cost base and improved profitability.
Culture
PERSONALITY: We own and embrace our personality and culture, and we are not being shy to let it shine in all that we do even if it does not appeal to everyone.
PERSONALISATION: We are creative in all that we do. We focus on innovating with low cost, high emotional impact, and an element of surprise.
POSITIONING: Taking a clear position within a market is key to success. A younger generation of guests do not trust large brands – they find them too greedy, selfish, or detached from reality. Imolott Limited is making sure we are clear on what we are (and what we are not) and embracing it in all we do. Targeting guests who are keen to experience something authentic and special at a price they can afford.
MESSAGING: We focus on our guests seeking out hidden gems, A broad market including young professionals, baby boomer retirees, empty nesters looking to spend their newfound free time traveling, or young families seeking great child-friendly rather than child-focused hotels – our hotels will focus essentially on anyone who wants a boutique hotel at a price they can afford, even from corporate customers, many of whom have grown tired of staying in soulless brand/chain hotels when travelling regularly for business.