Get Maximum ROI from Hotel Investment

BEST HOTEL
INVESTMENTS
HOW TO GET
MAXIMUM
R O I
FROM HOTEL
INVESTMENT
FREE ANALYSTS’
RECOMMENDATION
UK EDITION AUTUMN 2017

“investing in
the hotel and
hospitality sector is
not only financially
rewarding but
offers an exciting
opportunity to
engage in one of
the nicer aspects
of life. For those
with political
aspirations, it’s
worth bearing in
mind that there’s
a hotelier in the
Whitehouse!”
BHI ANALYSIS
2

FOREWORD
Behind Best Hotel Investments is a small team
of highly-qualified analysts with extensive
investment banking experience. We came
together on the back of the massive rise in
retail investment we’ve all seen in recent
years that has created a noisy and confusing
landscape for non-professional investors.
Now, we’re all getting on a bit in life at BHI and fall into the
50+ age demographic which is largely the target market for
investment opportunities in the £20k-£100k entry-level range.
Perhaps this is the reason we’ve personally seen such an
increase in the range of real estate assets available for
investors like us but it is definitely the reason we wanted to
position ourselves in an advisory capacity to prevent anyone
getting ripped off.
We’ve all worked hard for our savings and BHI fully understands
the risks an ill-advised investment can pose to your financial
security and that of your family at any stage of your life.
What’s in it for us?
Well, it would frankly be churlish to suggest that we offer
professional analysis out of the goodness of our own hearts,
particularly as we’ve got our own retirements to finance. That
said, this is our modus operandi:
• We review niche real estate investment markets – in this
case hotels – and identify value growth opportunities by
country.
• Then, we take a look at the macro-economics of the
particular country in focus to find out what the growth
drivers are and where they’re located.
• Our focus zooms in on regions and real estate sectors where
there is an exceptional level of investment activity and run
value comparisons across domestic and international
competitive sets.
• The next subjects to come under our scrutiny are the
developers most active in the areas and sectors we’ve
identified until we’ve narrowed down our search to where
the value is.
• Then we take our research directly to the developers and
advise them that we would like to make a recommendation
through our website based on our analysis and we negotiate
our fee for any new business generated directly with them.
What is Different about our Analysis?
The way a professional financial analyst views every asset is
from macro to micro, or in other words from the big picture
inwards. If you think about it, from your perspective you’re
constantly viewing the investment market from the other
way around, particularly when you’re being bombarded with
opportunities and offers.
The marketing material that accompanies many new
investment opportunities is always going to be spun in favour
of the featured products and so how can you ever see the wood
for the trees?
We complete our process in exactly the same way as back in
our banking years; corporate clients would approach us with
a view to raising capital through a bond issue or flotation by
submitting as many report and accounts, business plans,
executive statements, senior management team experience
details, growth projections, budgets, research and development
progress reports…….the list is endless.
We would not even engage in further negotiation without going
through all of this information in our credit analysis process.
Once this was done and all risks had been assessed through
extensive analysis, we would then get into further negotiation
on the actual deal they wanted us to put together.
Unfortunately in today’s retail investment market, it’s all too
easy to get distracted by double-digit returns and heavy use
of words like ‘guaranteed’ or even the more diluted term
‘assured’.
Fact is, nothing is guaranteed or even assured as we don’t
have the gift of foresight and so the only basis on which we can
make a considered decision about future performance of a
particular investment vehicle is by examining its performance in
the past. In this ebook, we intend to take you through the same
journey of analysis that led to our included recommendation.
Rather than reproducing Fibonacci charts and blinding you
with science, we’re going to present our data in a digestible
format that we hope you’ll find to be an enjoyable read.
Wishing you a successful hotel
investment journey!
BHI ANALYSIS
3

REPORT
HOTELS &
HOSPITALITY:
TRENDS SHAPING
THE INDUSTRY
When it comes to the hospitality industry, trends can be both ephemeral and
everlasting. Some are just a flash in the pan; others have a staying power
that last for decades. Last year’s trends were in many ways shaped heavily by
consolidation and the drama that accompanies mega-mergers and acquisitions,
as well as the direct booking wars waged among hotels and their eternal
frenemies, the online travel agencies.
Whatever ends up ultimately happening in 2017, we know it has proven to
be a year of great change. This year, we even have a hotelier in the White
House, for whatever that’s worth. And following last year’s multiple mergers
and acquisitions, the lasting effects of those consolidations will finally begin to
emerge, and become that much clearer.
So, what did this year’s trends in hotel guest experience bring? We won’t
guarantee complete or absolute accuracy here, but given what’s happened in
the last 10 months, this is where we see the various trends culminating.
BHI ANALYSIS
4

CO-EVERYTHING
We have said before
that co-living could
become the next big
trend in hospitality
and we weren’t
kidding. While it’s doubtful that we’ll
suddenly see a surge of pod hotels,
poshtels, or co-living/co-working
spaces flooding the hospitality scene
this year, the tenets of “co-living” —
that emphasis collaboration and
community — will permeate much of
the hotel guest experience in 2017.
In some ways, we saw it happening
last year. In September 2016, for
example, AccorHotels announced it
was launching a new brand, Jo&Joe,
largely inspired by co-living and
hostels. And in December, Hilton
Worldwide announced it too was
considering launching an “urban
Microtel” brand concept in the near
future.
In 2017, we have seen even
more emphasis on investment in
communal areas, as well as shared
spaces and experiences that bring
people together.
Because if there’s one advantage
hotels have over home shares like
Airbnb or HomeAway, it’s that role
of being a real community fixture
— a place where strangers can
gather together. Yes, an Airbnb
might place you in the heart of a
local neighborhood and you might
be introduced to a local host but
in many cases, the experience of
a home stay can also be isolating.
There’s no central hotel lobby where
you can gather with other tourists or
locals. So expect hotels to double
down on this distinct advantage,
and attempt in their own way, too,
to make guests feel as though they
really “live there.”
GOOD DESIGN
GOES MAINSTREAM
Thoughtful design isn’t something
exclusive to boutique hotels anymore
— it’s the basic price of admission
these days. Even established brands
like Marriott, Hyatt, and Hilton are
finally shedding their outdated
design legacies.
Whether a hotel is ultra-luxury or
bare-bones budget, guests expect
it to look good and feel good. And
if current retail and interior design
successes are any indication these
days, they are proof that you don’t
necessarily need deep pockets to
have good design.
Design has always played a
crucial role in hospitality, especially
in defining that hotel’s brand or
persona, and today’s guests are
intuitively attuned to interpret design
to fit their conceptions of what a
hotel is really like, and if it’s the right
fit, or lifestyle, for them.
With the entry of home furnishing
and fashion names like West Elm,
Restoration Hardware, and Karl
Lagerfeld into the hotel space, the
bar for good design in hotels has
been raised even higher in 2017.
EXPERIENCES
BEYOND THE HOTEL
Whether or not Airbnb’s gamble
on Trips succeeds or fails, the mere
fact that the company has launched
tours and activities should be a clear
signal to hotels that they too need to
be paying more attention to guests’
experiences not just inside the hotel
but outside of it. They need a much
more holistic approach to overall
guest experience than they’re used
to delivering.
We’ve already seen glimpses of
“Hotel investment
is every bit as
compelling
a voyage as
travelling itself.”
BHI ANALYSIS
5

this, especially in the luxury end of
the spectrum, but we should expect
more hotels in other categories
doing the same, too. And if they
aren’t, they need to start thinking
about them sooner than later.
CONCEPTS OF
LOYALTY NEED TO
EVOLVE
The loyalty programme remains
the backbone of so many different
hotel companies’ master strategies,
and that certainly hasn’t changed
at all in 2017. And while so many
hotel companies are placing so
much emphasis and scrutiny on
their loyalty programs, we hope they
won’t follow in the footsteps of the
airlines.
In many ways, today’s overall
travel loyalty landscape is one
fraught with fragmentation. And
“Let’s face it,
who doesn’t
like to travel
the world?
However, our
expectations
have changed
and now we’re
demanding
more for our
money from
the hotels we
book.”
in the case of the airlines, loyalty
programs are increasingly rewarding
gamesmanship and large spending
over anything else. Perhaps that’s
the strategy that makes most
financial sense, but is it really the
strategy that’ll win customers’
hearts and minds?
We’re not so sure, but if hotel
brands want true loyalty from their
guests, it’ll be hard to achieve that
if they rework their programmes to
be more like the American Airlines,
Delta Airlines, and United Airlines
of the world. They should also
know better than to offer canned
responses to loyalty members’
requests for more information
when they decide to revamp their
programs, too.
Hotel loyalty as it stands today
is entering an age of awkward
adolescence, the result of
multiple consolidations and
changing consumer behaviors and
expectations. In 2017, hotels have
a golden opportunity to redefine
what real hotel loyalty is like and we
hope they seize that chance.
HOSPITALITY WILL
REDISCOVER ITS
ROOTS
A lot of times it can be easy to
forget that, at the heart of it all,
the travel industry — especially
the hospitality industry — is really
about people. Unintentionally in the
pursuit of efficiency and profit, the
industry has forsaken its biggest
and most important resource:
humanity.
The issue is that the real
disruption and innovation in
hospitality doesn’t lie in technology
or constructing great spaces. It’s
about the service and the people
delivering it. Unfortunately, the
basics of hospitality have been
compromised to make room for
innovation, but the best innovation
comes from the inside out and
creativity happens when hotel
staff are empowered and 100%
committed to customer service.
By empowering people working in
hospitality to be better at delivering
genuine service, we’d also do
well to heed restaurateur Danny
Meyer’s advice, too: “The only way
to motivate someone is to give
them a higher purpose beyond a
paycheck.”
The US are without doubt worldleaders
in customer service and
although in some establishments it
may seem disingenuous, providing
a good service is so entrenched
in American culture that they are
generally more attentive to the
needs of guests and provide a good
example for non-US hotels to follow.
BHI ANALYSIS
6

“LOCAL” WILL REGAIN ITS
MEANING
Hotels need to stop thinking of
bringing “local” into the hotel through
artisanal hand soaps or “locally sourced,
free-range bacon.” In the same vein of
bringing more humanity back to travel
and hospitality overall, hotels need to
start thinking more about their local
community, too.
In fact, we predict hotels will begin
reclaiming the role they once had as
community centres, only this time they’ll
have evolved to solve challenges unique
to modern times.
AccorHotels CEO Sebasiten Bazin
touched on this concept earlier this year
just after the brand finalised $2.7 billion
purchase of the Fairmont, Swissotel, and
Raffles hotel brands.
“99% of what we have done for 50
years has been based on the guy coming
from outside of town. A tourist from a
different city, from a different country,
which I think is interesting, but not too
smart. Because we missed a population
which is 100 times greater and better
and easier: The guy living next door. The
local inhabitants. They live around the
hotel, or they go to an office around the
hotel, and 90% of them never dared
coming into the property, because
they’re fearful that we’re going to be
asking, ‘What’s your room number?’ They
don’t need a room, but they may need a
service.”
Bazin said there are “zillions of
services we’re going to get into,” among
them having hotels assist locals with
simple tasks and solving everyday
solutions like holding packages or keys
or recommending the best services
nearby.
“[The hotel will be] a place that will
make your life easier,” he said. “It’s
giving a purpose to the Accor people,
because they’re going to be feeling very
proud, proud of bringing that additional
service that people need and are afraid
of asking for.”
LUXURY THAT’S LEANER
AND SMARTER
Today’s concepts of luxury aren’t
limited to 1,000-count-thread sheets
or the finest Russian caviar, and given
what’s happening overall in terms of
global shifts in consumer behavior, it’s
clear that experience is winning out over
the material when it comes to the kind of
luxury that consumers prefer.
This isn’t to say people don’t want
opulence or extravagance anymore. For
some tourists, that’s still an integral part
of what defines luxury. We’re not saying
luxury is transforming into something
more Spartan, or more minimalistic,
either.
What we’re saying is that lean luxury
is doing away with the excess of what
we used to think encapsulated the word
— those over-the-top messages, the
logos, the in-your-face-kind of luxury we
might have encountered 30 years ago.
Instead, lean luxury is about offering
tourists a more authentic, genuine luxury
experience unfettered by specific brand
or quality standards like thread counts.
The cornerstones of what makes
something luxury will still remain — they
are the price of admission, still — but
they’re not what tourists are paying
attention to anymore. Luxury tourists
already expect those services, those
finishes, those exquisite products, those
incredible designs, those little touches,
to already be there.
What will really set a luxury brand
apart today — what defines lean luxury
— is everything else. It’s personalised
service. It’s having a clearer sense of
community and place. It’s craftsmanship.
It’s having a story to tell.
The hotel doesn’t have to be gilded in
gold to be deemed luxury. It just needs
to have a story behind the brand or the
building to communicate to tourists. And
that story needs to fit in with the local
environments and preferences of the
communities the hotel operates in.
And we’re already beginning to see
glimpses of that, especially in how hotel
companies like Marriott and AccorHotels
are choosing to further distinguish and
position their luxury brands.
THE SMART HOTEL
EMERGES
Not all hotels will become like the
Wynn Las Vegas, equipping each and
every hotel room with its own Amazon
Echo smart speaker device, but we can
expect more on-demand technologies to
find their way into hotels in 2017.
That’s simply a given, especially
as hotels continue to make large
investments in beacon technologies,
messaging, streaming in-room
entertainment, and other smart hotel
concepts.
EXPECT EVEN MORE
BHI ANALYSIS
7

BRANDS TO EMERGE BOTH NEW
AND FAMILIAR
Maybe Marriott won’t be adding any more brands
to its portfolio of 30 anytime soon, but when it comes
to its peers, Hilton included, there’s certainly room to
grow.
In 2017 we have been seeing even more nontraditional
hotel brands entering the hospitality space,
as we did in 2016 with West Elm and Karl Lagerfeld, for
instance.
“I think brands are trying to leverage some of their
market share with these brand extensions,” said Gray
Shealy, executive director for Georgetown’s Hospitality
Management master’s program and a former global
design director for W Hotels. “This way, they’re able to
attract more customers and get more people to try their
products.”
Bjorn Hanson, clinical professor with the NYU Preston
Robert Tisch Center for Hospitality and Tourism, said he
thinks this trend isn’t going away anytime soon, either,
driven by the growth in new hotel projects and the fact
that boutique has gone mainstream.
“The amount of new projects being launched is
almost double what it was in 2014,” Hanson said. “We
were at less than 1% supply growth and now 2% or
slightly more. That explains part of it. A second issue
is … well, lifestyle hotels are kind of the norm and no
longer special. We need to find a new way to make them
special with a new kind of affiliation. Instead of another
hotel brand, it’s another kind of a brand.”
The added “halo effect” of these established brands
is also a benefit, Hanson said.
“Many of these brands have an identity that is
understandably related to hotels,” he said. “Whether it’s
a company involved in fashion or decorating or design,
these are not alien to hotels. It’s easy for consumers to
see why they think they might be appropriate as hotels,
too.”
DATA INTERPRETATION IS THE
ULTIMATE INTELLIGENCE
Now that we’ve advanced enough to know how to
collect or mine data, it’s up to the industry to know what
to do with that information.
That was a message delivered by Airbnb Global Head
of Hospitality and Strategy and Joie de Vivre Hotels
founder Chip Conley, as well as former Starwood CEO
Frits van Paaschen at a hotel industry forum in 2016.
Conley spoke about the emergence, 25 years ago, of
the revenue manager and how “it was sort of curious
to us old school hotel people”, adding that today, the
revenue manager of yesteryear is the data scientist.
“Where hotels are way behind is data science,”
Conley said. “Data scientists represent what revenue
BHI ANALYSIS
managers represented 25 years ago. If you have a lot
of data scientists, you’re both able to find the right
customer for you. This is a huge differentiator in the
long term: personalisation and customisation.” Later,
he added, “We need to get really smart around data
science. It helps us personalise choices.”
“There’s an extraordinary amount of information
available, but a real dearth of information that’s
potentially relevant to any one individual,” van
Paaschen said. “A lot can still happen in the hospitality
business. It’s a breeding ground for ever more
innovation.”
Big data, he said, is the “interaction of people and
technology” and the key is “how do you get that data
into people’s hands who deliver service at the moment
they do that?”
“Personalisation is the next manifestation in the
evolution of brands,” he added. “If you have this
emergence of brands being reliable, then having
a personality through media, and now you have
personal access with mobile. Brands really can deliver
personalisation now. The expectation of people of
brands is you should know me and know what I want.”
In 2017, it’s clear that the hospitality industry needs to
be prepared for even more disruptions that lie ahead.
And to be prepared, it is clear that hotels need to look
beyond the boundaries of their own industry to take
stock of what’s happening, not only in travel, but the
greater world beyond it.
8

GROWTH INDICATOR
Hotels that fail to keep
up with the trends will
fall by the wayside in
the coming years.
The bottom line is that people want more bang for
their buck when it comes to travel and tourism.
This is probably the reason some budget airlines
are failing as today’s consumer expectation is of a
great service at a budget price. In other words, we
want it all.
The hotels that will continue to grow in the future
are the ones that embrace all trends as they
emerge, with the most expansive brands setting
them. Smaller hotel brands have more chances of
seeing growth in the future as consumers demand
more bespoke travelling experiences.
BHI ANALYSIS
9

THE INTERNATIONAL HOTEL
INDUSTRY: STATS AND FACTS
The geat thing about hotel investment
is that it is a really fascinating sector.
Most of us will have checked into a
hotel at various points through the
year, either for business or leisure
and so it’s an experience we’re
all familiar with. Stats and facts needn’t be about
spreadsheets and complicated tables – that’s best
left to analysts who actually enjoy studying them.
Here we share with you some truly interesting and
sometimes quite surprising facts about the global
hotel industry. We’re going to zoom in on the UK a
little later on and so these facts apply more to the
US and the rest of the world.
How many hotels are there worldwide?
More than 700,000 hotels and resorts are scattered
around the globe. The total number of rooms for the
various properties comes to 15.5 million.
How many hotels and motels are there in the
US?
It’s pretty easy to find a place to crash for the night
in America. As of 2013, there were 52,887 lodging
properties and 4.9 million guest rooms open for
business nationwide, with an average occupancy
rate of 62.2% at any given time.
How does the average daily rate (ADR) in the
US compare to the rest of the world?
As of October 2015, the average daily rate was
£91.95 and with two exceptions, the price for a
hotel room in the US is between £3.70 and £11.15
higher than other parts of the world. In Africa and
the Middle East, the average daily rate is just over
£116.40.
Which city has the highest average rate worldwide?
You might think New York City would top the list of
BHI ANALYSIS
10

the most expensive city for travellers, but it’s actually
Geneva, Switzerland, that takes the honour. A room
there costs £228.41 per night on average.
Where is the most expensive hotel room?
The hotel with the highest ADR, The Royal Penthouse
suite of Hotel President Wilson in Geneva is
considered to be the most expensive hotel room in
the world. The average price per night for this room
is a whopping amount of approximately £45,000-
£62,250.
How much revenue does the US hotel industry
generate?
Americans spend big bucks on lodging at hotels and
motels each year. Annually, sales total more than a
healthy £120bn.
What about the global market?
While US hotel industry revenues are nothing to
sneeze at, they represent just a small piece of the
pie. Worldwide, travellers spend roughly £615bn a
year on hotel stays.
What percentage of hotel stays is for business
vs. pleasure?
People travelling for pleasure make up the majority
of the traffic that hotels see around the world, with
roughly 41% booking rooms for business trips.
What does the average business traveller look like?
Overall 64% of business travellers are men, with over
half of them between the ages of 35 and 54. More
than 60% of them work in a managerial position,
and they earn an average household income of
£94,000. 40% of business tourists stay just one
night, paying £106 on average for their rooms.
What about the average pleasure tourist?
54% of leisure stays involve two adults, two-thirds of
whom are over the age of 35. Half of leisure tourists
stay just one night, but they get out a little cheaper
where their room is concerned, with an average bill
of £92.
What is the world’s largest hotel?
With 7,351 rooms, Malaysia’s First World Hotel holds
the Guinness World Record as the planet’s largest
hotel. Rooms there are a bargain, running between
£8.90 and £61.50 on average.
What is the tallest hotel in a city?
6 out of the top 10 tallest hotel in the world exist
in one city. Yes, you guessed that right. Dubai has
over half of the top 10 tallest hotels in the world. JW
Marriott Marquis Dubai is the world’s tallest hotel
having 76 storeys and standing at is 355 metres.
What is the most visited country?
France is the most visited country in the world. It
attracts more than 80 million visitors annually. This
might not be surprising given the presence of scenic
Alps, French cuisine, lovely destinations, best wines
and eloquent people. Europe and Asia Pacific regions
are the key regions that attract the attention of the
tourists each year, achieving the highest sales in
international tourism despite having among the most
expensive rooms.
Where is the oldest hotel in the world?
Koshu Nishiyama Onsen Keiunkan in Japan is named
as the oldest hotel in the world and is recorded in
the Guinness Book of world records. The hotel is over
1300 years old and ownership has been held by the
same family for over 50 generations.
BHI ANALYSIS
11

THE BRITISH HOTEL INDUSTRY:
FACTS AND STATS
GROWTH
NEXT
FOR
THE
TEN
YEARS
CLICK FOR
DEFINITIONS
OF HOTEL
TERMINOLOGY
The reason we wanted to focus
particularly on the UK’s hotel sector
is primarily because of the looming
shadow of Brexit and the uncertainty
surrounding the way forward in the
acrimonious divorce proceedings. The
Brexit issue has impacted investment across
the board in the UK and not as negatively as
you may think. The underlying weakness of the
British pound has been creating some attractive
opportunities for overseas investors while
domestic buyers feel confident enough of a future
rebound of the currency to want to take advantage
of the historical lows it is currently fluctuating
around.
Here we zoom in on the performance of the
British hotel segment and expectations for this
year, spitting out the salient points that will be
of interest to you as an investor in this lucrative
market:
• Occupancy levels are at the highest on
record in the UK’s regions despite comparatively
slower growth, expected to increase 0.5% on
2016 to achieve average occupancy of 77%.
Although London saw occupancy at 80% over
the same period, this represents a fall of -0.8%
since 2008 while still remaining high by global
standards.
• The ADR n the regions is expected to
reach £70 this year, an increase of 1.8%, while
in London a more modest increase of 0.4% is
forecast to bring the average room rate to £142.
• RevPAR in the provinces will increase
2.3% to reach £54, whereas London will see a
decline of -0.5% with revenue per available room
at £114.
• A glut of new rooms in London is seen
as being a major factor in the hotel sector’s
contraction in the capital. In 2016, there were
145,930 rooms in the city and more than 7,200
have been added to inventory so far this year, an
increase of more than 5% in supply growth.
• In the regions, supply growth has been
more constrained. The number of rooms in the
supply chain stood at 480,770 in 2016 and
more than 11,400 are expected to be added to
stock this year, representing 2.4% growth.
• Specifically, over 60% of hoteliers felt
pessimistic about trading in 2017, compared
to around 27% of respondents who remained
optimistic. There was more concern about
London than the Provinces.
• In addition to issues such as post EU
Referendum uncertainty, hoteliers mentioned
additional costs as a concern, including the
Apprenticeship Levy, the National Living Wage,
a business rates review and food and pensions
costs.
• New concepts from the sharing economy
continue to disrupt how we do business and
interact with one another. Transport and
accommodation are leaders in the shared
business space. PwC research shows a 54%
increase in Airbnb listings in London in July
2016 compared to the same day in 2015.
• Despite the general industry forecasts
that Manchester, Edinburgh and Birmingham
would be star performers in 2017, Glasgow,
Cardiff and Liverpool are also expected to do
exceptionally well this year.
BHI ANALYSIS
12

EDITORIAL
BRITISH
HOTEL
INVESTMENT
AND BREXIT
Britain’s economic
prospects after
Brexit UK economic
growth had slowed
somewhat to
around 2% before
the EU Referendum, but the vote
to leave the EU could lead to a
significant further slowdown. UK
GDP growth slowed to around 1.6%
in 2016 and so far in 2017 to 0.6%,
due to the increased political and
economic uncertainty following the
‘Brexit’ vote.
Overall, growth is still expected
to remain positive on average
in 2017, with the economy
narrowly avoiding recession and
starting to recover later next
year as negotiations with the EU
proceed. We assume here that
monetary policy will continue to
be supportive; public borrowing is
allowed to rise in the short term
to absorb some of the impact of
slower growth, and that some
progress is made during 2017 on
negotiating a free trade deal with
the EU, even though all the details
of this are unlikely to be agreed
until later.
For the future outlook the key
issue is the impact of Brexit.
The Bank of England is clearly
concerned over the potential shortterm
slowdown and has cut interest
rates to an historic low of 0.25%.
Economic outlook
Government consumption growth
will be less affected, but is likely
to remain moderate in line with
previously announced plans
(although these could be revised in
November’s Autumn Statement).
UK net exports may move in
a more favourable direction,
making a positive contribution
to GDP growth in 2017 as import
demand weakens and the fall
in the pound helps exports and
import substitutes to become more
competitive.
This should also help to moderate
the large current account deficit,
which helps to explain the
weakness of sterling. Overall, our
growth projections are broadly
similar to the latest average of
independent forecasters, which see
UK growth falling to around 0.4% in
2017. But all economic projections
are subject to particularly large
uncertainties at present after the
shock of the Brexit vote.
The main drag on growth will
come from business investment,
which had already weakened
before the referendum and is
likely to be particularly hard hit
by the vote to leave the EU. This
will be particularly true of foreign
investment in commercial property
and in sectors aimed at accessing
the EU single market such as the
hotel and hospitality industry.
While we assume some kind of
free trade agreement is eventually
reached with the EU, this will
take time and (given the need to
increase control over immigration)
will almost certainly involve some
reduction in access to the EU single
market relative to the current
position. Even if tariffs on goods
are largely avoided, non-tariff
barriers are likely to increase.
Key projections for the UK economy
in 2017:
• Real GDP growth 0.6%
• Consumer spending growth
1.3%
• Inflation (CPI) 1.8%
• House price growth 0.9%
BHI ANALYSIS
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TOPIC
BRITAIN REMAINS TOP EUROPEAN TARGET
FOR HOTEL
HOTEL INVESTMENT
According to a new
survey published
by leading
global property
researchers CBRE,
the UK is the most
attractive market in Europe for hotel
investment, reflecting a growing
confidence in the British real estate
market after the slowdown in
investment activity the followed the
Brexit referendum.
In a clear reflection of the gathering
strength of hotel investment
demand the ‘European Hotels
Investor Intentions’ survey also
revealed that 87% of respondents
are planning to invest the same
or more into hotel real estate in
2017. This suggests that the hotel
investment market has become
more attractive compared to the
situation a year ago.
The survey findings further
revealed that hotel investors cited
“economic growth” as the greatest
opportunity to European hotel
investment in 2017. This was closely
followed by “the cost and availability
of debt”. However, the primary
concern for hotel investors in 2017
is “asset pricing and geopolitical
influences”.
This marks a difference in the
perception commercial sector
investors have compared to hotel
investors, as the former see “rapid
interest rate increases” and “a
major global economic shock”
as the major risks, as found in
the wider CBRE Global Investor
Intention survey.
Miles Gibson, Head of UK
Research at CBRE, commented:
“2017 will see some complex
opening manoeuvres in the Brexit
negotiation, not least because of
the potential for some twists and
turns in European politics too. Brexit
will take time but the wheels of the
economy will still turn and there is
no doubt that the UK’s particularly
strong economic fundamentals will
further underpin investor confidence
in purchasing UK property.”
Joe Stather, Research Manager,
CBRE Hotels, said: “The wideranging
appeal of hotels as an
investment asset class clearly
demonstrates hotels’ transition
into the mainstream. The general
investor appetite to invest more
into the hotels sector through 2017
should result in an increase in the
European-wide hotel deal volumes,
but we may find that growth in deal
activity will face the challenges of
limited supply.”
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BEST HOTEL INVESTMENTS
ANALYSTS’
RECOMMENDATION
As promised, we have scoured the hotel investment landscape in the UK to find
a hotelier that displays all the fundamentals of being progressive, expansive
and most of all profitable that is currently offering opportunities to invest.
Now that you know more about the UK hotel industry and its context in the
global market, we’ll tell you why an investment in Signature Living stacks up so
well at the current time. First of all, let’s focus on the brand itself and find out
more about it.
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ABOUT THE BRAND
Signature Living is a
Liverpool-based hotelier
with a double-whammy
USP. On the one hand,
the brand specializes
in larger size rooms for
groups of guests to enjoy together
and on the other, has a policy
of acquiring landmark buildings
that are transformed in tasteful
remembrance to their historic
former occupants.
The first hotel opened by the
brand in 2008 is located at 30
James Street, Liverpool and in fact
is named after its address. This
building was the former home of
White Star, the shipping line behind
the ill-fated Titanic which of course
was famously built in the city. These
days, the rooms reflect echoes of
the past but without being cheesy
or over-the-top and despite the
building’s interior transformation,
its fascia remains one of the most
recognised in Liverpool.
One of the best things about the
Signature Living brand is its CEO,
Lawrence Kenwright (pictured
right) and his personal approach
to promotion. Liverpool born and
bred, Kenwright has a passion for
restoring the city’s world-famous
landmark buildings and in the
process delivering an utterly unique
experience to guests at his growing
number of hotels.
2017 has seen the brand extend
beyond its hometown with the
addition of the Coal Exchange Hotel
in Cardiff and the George Best
Hotel in Belfast, a city synonymous
with the legendary football. Still
maintaining its ethos of acquiring
and developing outstanding
buildings, Signature Living
continues to increase its brandrecognition
beyond the boundaries
of the North West of England.
BHI ANALYSIS
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LOCATION, LOCATION, LOCATION!
ABOUT LIVERPOOL FROM AN INVESTOR’S PERSPECTIVE
Liverpool is a leading investment destination after having seen
phenomenal growth over the last decade and this has been reflected in
the city’s property market. The city is at the centre of the UK’s second
largest regional economy with access to six million customers, an
economy worth more than £121 billion and 252,000 businesses (on
Merseyside).
The city is strongly connected to global markets, serving as the home for many
multinationals including Barclays Wealth, Jaguar Land Rover, Maersk, Novartis and
Sony. Liverpool’s £2bn wealth management sector is the largest of its kind outside
London with a market-leading, international reputation.
From a property perspective, Liverpool boasts an average rental yield of 6.56%,
considerably higher than that of London which currently stands at an average 5.2%.
Property prices in the city also remain among the most competitive in the UK and there
is a multitude of areas currently undergoing regeneration work providing the right
conditions for capital growth.
• Latest figures show Liverpool City Region’s Visitor
Economy is now worth £4.3bn, 2016 welcomed over
62m visitors to the region and supported more than
51,500 jobs.
• Liverpool also moved up the rankings to become
the 5th most visited destination for overseas
visitors – this is supported by hotel occupancy data
which shows that last year there was a near 2%
growth. These findings are contained in the latest
independent research for 2016 commissioned by
VisitLiverpool, the City Region’s tourist board.
• In 2016 there was a 3.9% increase in staying visitors
compared to the previous year, with an increase of
6.4% of those staying in serviced accommodation.
• There was a 4% increase in economic impact, growing
to £4.3bn – with shopping and food and drink
representing half of the overall value
• 2016 saw a 1.4% increase in the total number of jobs
supported by the sector, a total of 51,729 overall.
FOR LIVERPOOL ALONE:
• The value of tourism has increased by 5% to
2.9bn
• Visitor numbers have increased in Liverpool by
2% to 34.8m
**These figures were published by the STEAM (Scarborough Tourism
Economic Activity Monitor) model which is used throughout the UK
tourism industry to measure economic impact of the Visitor Economy,
and International Passenger Survey 2016.
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THINGS YOU PROBABLY DIDN’T
KNOW ABOUT LIVERPOOL
It is a World Heritage Site
Liverpool’s waterfront is a designated World Heritage Site. That puts it
on par with the Taj Mahal and the Great Wall of China! The accolade was
granted by UNESCO in July 2004 and reflects the city’s significance as a
commercial port at the time of Britain’s greatest global influence.
The city has more museums and galleries than anywhere outside London
Liverpool has one of the most impressive collections of museums in Europe
including the Tate Liverpool, the Merseyside Maritime Museum and the
Museum of Liverpool, the UK’s first museum dedicated to the history of a
city.
Liverpool has the most Grade II-listed buildings outside London
Liverpool has the largest number of Grade II-listed buildings outside London,
with a surprising 2,500 listed buildings and 250 public monuments.
The city was home to the world’s first passenger railway line
The world’s first passenger railway line was built in 1830, from Liverpool to
nearby Manchester. A local member of Parliament was killed soon after, in
the first ever railway accident.
Had the first lending library, school of tropical medicine, and school for the
blind
Liverpool was the first city in the world to have a lending library, a school of
tropical medicine and an American consul. It was the first UK city to have a
school for the blind!
Liverpool has a thriving film industry
Films that have been shot there include The Hunt for Red October, the 51st
State, The Parole Officer and Letter to Brezhnev. The city was used as a
location for more than 140 films last year and has doubled for Moscow,
Dublin, Paris and even Venice.
Holds the Guinness Book of Records title for being the Capital of Pop
Now this is almost too obvious to even mention… but heck, it needs to be
said! Liverpool holds the Guinness Book of Records title for being the Capital
of Pop. More artists with a Liverpool origin have had a number one hit than
from any other location. And of course, Liverpudlian legends The Beatles
changed the face of popular music.
Most successful footballing city in all of England
Liverpool is the most successful footballing city in England, home to both
Liverpool and Everton. It has won 27 League championships, five European
Cups, three Uefa Cups, one Cup Winners cup, 11 FA Cups, and six League
Cups.
Was once the “Second City of Empire”
The city of Liverpool was created in 1207 when King John granted a Royal
Charter which was written in Latin. Liverpool was once the “Second City of
Empire”, eclipsing even London for commerce at times.
Was the European Capital of Culture in 2008
The European Capital of Culture is a city designated by the European Union
for a period of one calendar year during which it organises a series of
cultural events with a strong European dimension. Liverpool beat five other
hopefuls – Bristol, Birmingham, Cardiff, Newcastle-Gateshead and Oxford –
to win the coveted prize.
Is the 5th most popular destination for international visitors
Liverpool in 2013 was the 5th most popular destination for international
visitors with 562,000 staying visits up from 550,000 in 2012. And 5th most
visited English destination for British domestic visitors (1.68m overnight
visits). It was 6th for pure holiday trips (703,000) in 2012 and 6th for
business tourism (289,000)! Liverpool’s tourism contributes around £58
million to the economy and supports 48,600 jobs. Its popularity is thought
to be due to The Beatles, its extensive maritime history, flourishing art scene
and exceptional leisure facilities, such as Liverpool One.
BHI ANALYSIS
18

REPORT
SIGNATURE
LIVING:
A BRAND
EMBRACING TRENDS
If you recall at the beginning of this ebook we looked at the trends
that are currently shaping the industry around the world. To give
a transparent picture of why Signature Living is such an exciting
hotelier, we’re going to refer back to the trends relating specifically
to hotel operations and identify how the brand is embracing them,
signalling very exciting growth potential for the future.
When considering a business for investment, it is important to see
evidence of a strong management team driving growth through
innovation and change.
Lawrence Kenwright is a passionate CEO who relentlessly pursues
his goals, powered by a strong investor base. Signature is a group
that has the strongest of fundamentals worthy of a AAA credit rating
in our professional opinion.
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CO-EVERYTHING
This trend relates to the industry’s
shift towards the sharing economy
as a way of extending the product
and service range and its one that
Signature Living has embraced
with a bear hug in recent months.
The brand has recently launched its co-working,
(or flexible office) space provider, Signature
Works, which opened the doors of its first
location in Liverpool city centre’s prestigious
Bling Bling Building towards the end of July this
year.
Recognising that a move into flexible office
provision is a very lucrative sideward step for a
hotel brand. Signature Living has harnessed all
its contacts in the local business community
to create a shared office space where
independent workers and small businesses
have a tangible shot at successful growth.
With impressive membership benefits that
include free gym membership (at a Signature
gym), the Privilege loyalty card which earns
discounts at a wide range of shops, bars and
restaurants and access to an incubator panel
that has £500k ready to invest in innovative
startups.
You can find out more about Signature
Works and its rapidly-growing Membership
by clicking HERE to view the website.
“The similarities
between the
coworking and
hotel business
models are such
that it makes
sense to include
expansion in this
area”
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TAKING GOOD DESIGN
MAINSTREAM
When it comes to unique, quirky
and almost customized interior
design, Signature Living has
got it down to a fine art. This
is mostly due to the CEO
Lawrence Kenwright and his
wife Katie who founded the brand back in 2008 on
the back of there being a lack of the kind of hotel
that provided for larger parties of guests.
Wishing to host family celebrations in a central
location where catering and accommodation
were all taken care of in the room price led to the
couple founding a hotel brand that delivers just that
experience – and very successfully too.
While it’s essential for every hotelier to have a unique
selling point or USP, design is just as important when it
comes to delivering a great guest experience. Service
is one very crucial aspect of hotel management but
the surroundings and interiors all need to deliver a
memorable experience too and as you can see from
the many varied pictures in our gallery, Signature
Living does just this.
CLICK ON IMAGE TO START SLIDESHOW
“Signature Living shows a strong commitment to
design by consistently creating stunning interiors,
while maintaining the architectural integrity of the
landmark buildings the brand develops”
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OFFERING
EXPERIENCES
BEYOND THE HOTEL
Although Signature Living’s
core portfolio is in Liverpool
city centre, the brand has
made some acquistions in
Northern Ireland and Cardiff,
Wales this year. In keeping
with its ethos of transforming
landmark buildings the
purchases have included
listed buildings such as
Cardiff’s Coal Exchange and
the former Scottish Mutual
Building in Belfast.
Outside the walls of Signature
Living’s hotels which are
in themselves fascinating
in terms of historical
importance, the cities they
are located in have huge
appeal of their own.
Liverpool, as we detailed
above, is one of the mostvisited
in the UK and the
same is true of Cardiff and
Belfast, with both cities
attracting a significant share
of visitors to Britain. Each
city has enough attractions
to sustain a multitude of
tourists with a wide range of
tastes and interests and so
there’s plenty to experience
outside of a Signature hotel
as a base.
BHI ANALYSIS
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THE SIGNATURE
PRIVILEGE LOYALTY
PROGRAMME
We mentioned earlier how airlines haven’t quite
grasped the concept of loyalty programmes
sufficiently to make them of any value to customers.
Well, Signature Living has been developing its own
loyalty programme which comes in the form of a
‘Signature Privilege’ card. CEO Lawrence Kenwright
has capitalised on his brand’s many connections with retailers and service
providers in Liverpool to create a discount card for guests at his hotels and
members of his co-working arm Signature Works.
From an analysts’ point of view, a brand that harnesses any goodwill it has
created for itself over the years of establishment to pass on the benefit to its
customers is a very strong fundamental and also an indication of excellent
growth potential. The reason this is important in the hotel industry because
the hospitality sector has to be an active part of the local community in order
to thrive. Whether that’s by creating jobs, employing local businesses or
expanding into a complementary sector such as co-working, hotels need to
create a solid revenue stream from local consumer markets to be sustainable.
BHI ANALYSIS
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SIGNATURE’S HOSPITALITY HAS
REDISCOVERED ITS ROOTS
A
five star luxury experience does
not have to be stuffy and stuck up
and Signature Living understands
that better than most hotel brands.
In the UK, guests expect much
more customer service than ever
before, an area that the US has excelled in for decades.
Nevertheless, they don’t want to feel unable to ask how
the shower operates because of intimidating staff or
because their environment feels too exclusive or cliquey.
Signature hotels are not only welcoming, the rooms are
mostly for large parties and they are actively encouraged
to be no holds barred events! There’s nothing stuck up
about the Shankly Hotel, dedicated to the memory of
football’s Bill Shankly or even 30 James Street which is
located in the former White Star offices – the shipping
firm behind the ill-fated Titanic. The brand has a penchant
for themed rooms but they are not so in your face that the
theme dominates your stay. On the contrary, the rooms
are fun or elegant or quirky depending on which one you
choose. This is one of the delights of Signature Living
in that their hotels are all like chocolate boxes when it
comes to room selection.
The brand has also firmly established itself in the local
community, where CEO Kenwright holds a prominent
position and is considered a driving force in Liverpool’s
regeneration of recent years.
“LOCAL” HAS REGAINED ITS MEANING
Perhaps the fact Signature Living is not a franchise and
part of a major international brand is the reason it has its
foundation firmly rooted at local level. Born and bred in
Liverpool, the Kenwrights exhibit their passion for the city
in their work and have established themselves as highprofile
members of the local community.
This level of dedication is important in hospitality as the
local area contributes as much to guest experience as the
hotel stay itself. Good relationships with local retailers
and leisure service providers means that special rates
can be negotiated and also that good information about
what there is to see and do near the hotel is available to
guests.
LUXURY THAT’S LEANER AND SMARTER
When we talked about this point earlier on, we mentioned
the importance of a hotel having a story in its building and
surroundings and Signature Living has this down to a tee.
From its first hotel at 30 James Street, Liverpool which
has a Titanic theme to represent its history as home
to the White Star shipping line to its latest acquisition
opposite the brand’s Shankly Hotel to be called the Dixie
Dean Hotel; every Signature hotel has a fascinating story.
Over in Belfast, the Scottish Mutual Building is currently
being developed by Signature to transform it into the
George Best Hotel, continuing the theme of creating a
story for every new development. The Coal Exchange is
another example of how the brand retains the original
integrity of a building, while delivering its own unique
brand of first class hospitality.
BHI ANALYSIS
24

WHY NOW IS TIME TO INVEST:
LAWRENCE KENWRIGHT CEO
SIGNATURE LIVING
CLICK ON THE IMAGE TO START VIDEO PRESENTATION
One-man brand Lawrence Kenwright is
undeniably the powerhouse that has
driven Signature Living from strength
to strength since the firm was founded
in 2008. While other businesses were
picking up the pieces of what was left
after the global recession, Kenwright almost singlehandedly
grew an extremely impressive empire.
In total, Signature Living now own more than 15
developments, including hotels in Liverpool, a bar and
restaurant, as well as four serviced apartment blocks,
and ongoing projects in Cardiff, Belfast and Preston.
Nevertheless, the unstoppable Kenwright has been
busy in recent months in continuing negotiations
for various expansive moves. These include the
acquisition of the building opposite Signature’s
Shankly Hotel in Liverpool, which is to be developed
with another football them to honour Dixie Dean.
Facebook posts made by the CEO show that he
has also recently paid a flying visit to the UAE to look
into opportunities to develop the brand’s first floating
hotel.
One of the most appealing aspects of the Signature
Group from an investors’ point of view is that its CEO
has a consistently high profile. This is a man that
stands very firmly behind everything he does and this
transparency is an attractive asset for an expanding
brand.
If you consider the growth of big businesses such
as Virgin or Microsoft to name but a few, much of it
hinges on the strength of one person’s motivation.
Lawrence Kenwright has every ounce the passion
and limitless motivation of business leaders like Bill
Gates and Richard Branson.
Kenwright’s profile in the North West of England
is increasing day-by-day, which is drawing significant
attention from investors looking to get involved.
Signature Living has robust fundamentals and
an exceptional track record of fulfilling investor
obligations, something that is very important from
our point of view.
These are all reasons why Best Hotel Investments
has recommended Signature Living for retail
investment.
BHI ANALYSIS
25

CURRENT
OPPORTUNITIES
Signature Living is one of the most active developers in the UK. Here we show you some of the
opportunities available at the current time. These investments are within the Group’s core business
of hotel development and operation, although there are plenty of other opportunities to invest in
other real estate asset classes including residential buy-to-let and of course, Signature Works, the
Group’s co-working or flexible office provider spin-off. Signature investments can be used as a way
of diversifying real estate assets across different classes. This means they each work as standalone
investments by offering income streams with reduced correlation - in other words, your risk is reduced.
As analysts, we like to investigate historical performance when taking a look at current opportunities.
Fortunately, because Signature Living is highly active in investment markets, we have the brand’s track record
as evidence of future potential.
You can see for yourself how the brand completed its first investment offer in recent months. The property
was the brand’s first hotel at 30 James Street, Liverpool which is now tastefully Titanic-themed to maintain the
history of the building. You can view the investment case study by clicking HERE.
THE WARING HOTEL
9-13 WARING STREET
BELFAST
FROM: £85,000
KEY FACTS
• 64 units
• Prices from £85,000
• Luxury hotel
• Return on investment of 7% during years 1-3, year 4 is 8% and year 5
onwards is 9%
• Developer to buyback the units at 106% of the purchase price from year 3
with a 2% increase capped at 116% on year 6 -10 of the investment
• Hands off Investment
• Award winning Hotel operator and developer
• Location Highlights
• 12 min walk to Castle Court A busy shopping centre in the city that has an
estimate of 16 million visits per year
• 15 min walk to train station
• 8 min walk to Belfast City Hall
BHI ANALYSIS
26

CURRENT
OPPORTUNITIES
THE GEORGE
BEST HOTEL
BELFAST
FROM: £80,000
The George Best Hotel is a unique city centre development of one of Belfast’s
most iconic buildings.
This impressive building will be transformed into a luxury hotel with premium
amenities whilst preserving its Grade B1 listed status.
Located in the heart of Belfast city centre on Donegal Square South and
overlooking the magnificent City Hall and accompanying gardens, there isn’t a
more prominent location to invest.
DUE TO UNPRECEDENTED DEMAND A PRICE IN-
CREASE IS IMMINENT
ACT NOW TO SECURE UP TO 10% ROI AND 106%
DEVELOPER BUY-BACK
UP TO 10% ROI AVAILABLE FOR A LIMITED TIME ONLY!!
First 3 years – 8% NET
Year 4 – 9% NET
Year 5 onwards – 10% NET
BHI ANALYSIS
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FIND OUT MORE
If you would like to find out more about any of the opportunities to
invest in the expansive Signature Group, complete the following form
and we’ll put you direclty in touch with Signature Living and their
Master Agent.
FULL NAME:
EMAIL:
TELEPHONE:
REQUIRED FIELD
REQUIRED FIELD
REQUIRED FIELD
ASSETS HELD (IF ANY):
HOTEL ASSETS
FLEXIBLE OFFICE SPACE
RESIDENTIAL BUY TO LET
CONSTRUCTION PROJECTS
BHI ANALYSIS
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