انگیزه های اپراتور هتل در انگلستان و معاملات اجاره برگشت /مدیریت برگشت

Sale and leaseback has become a major financing method in the hotel industry in the UK over the last 10 years, followed more recently by sale and management-back. This article, using interviews with current practitioners, examines the motivations of owner/operators in adopting these methods, identifying differences from generic motives in previous literature relating to the subject. It finds that, because of the integral part that hotel properties play in the delivery of customer service there are differences of opinion on the benefits of such an approach and there is a need to adopt some different considerations in the decision to use this method of funding.

Sale and leaseback transactions (SLBT) of portfolios of hotels have become a prominent part of financing and property ownership arrangements in the UK industry in the last 10 years (Whittaker, 2005). Prior to this, as Hopper and van Marken (2001) noted, institutional investment in hotels had been limited. The hotel industry is not unique nor at the forefront in adopting this form of financing. Researchers have written generally on SLBT, discussing industries such as retail, telecoms, financial services and energy (Barris, 2002; Dixon et al., 2000), as well by governmental operations such as hospitals. However, no academic research appears to have been done in the UK on its application to hotels, though some practitioners, real-estate agents and accountants mainly, have published articles on the subject (Elgonemy et al., 2002; Redington and Hackleton, 2006). The hotel industry arguably has certain peculiarities that affect the needs of both the hotel operator, as lessee, and the lessor, the lending institution. Not least of these are the integral part that property plays in the basic transaction of the hotel industry, the sale of space on a short-term basis (Jones Lang Lasalle, 2006), the consequent interaction between customer and property and a relative volatility of earnings (Redington and Hackleton, 2006). It has also been noted that SLBT work best when applied to ‘generic’ properties (Barris, 2002)–those that can be used for other purposes or by a range of industries with a minimum of conversion cost, which is generally not true of hotels. A further example is the difficulty of identifying clearly the profits of hotel operations from those attributable to the property itself. At the same time the adoption of SLBT by companies in the hotel industry has been far from universal. Some have embraced it (see Table 1), while others have been noticeable by their absence, despite carrying large freehold property portfolios. At a forum attended by 175 [leading] industry figures (PKF, 2002) in 2002, 72% voted against the proposition, “Is the current vogue for hotel companies to sell their assets, and only retain operational control, in the long-term interest of their business?” In more recent times, operators have used the alternative of sale and management-back transactions (SMBT), whereby the operator sells the hotel and signs a long-term contract to manage the hotel on behalf of the investor. These conflicting views and strategies deserve to be examined, coming as they do from leaders in the hotel industry. Previous studies were done prior to the main growth in the hotel industry and did not attempt to address the peculiarities of any particular industry, while many tended to focus on the impact on share prices (Devaney and Lazieri, 2004; Fisher, 2004) rather than the motives in adopting the process.A clearer understanding of the issues will hopefully provide a framework against which hotel executives can formulate their decision-making in this area, and promote a greater understanding between hotel operators and the investment community. It will also make such knowledge available to the wider academic community, filling a gap in the current literature. This article, therefore, aims to identify and analyse the motives of hotel operators and thus the underlying drivers of SLBT analysing industry responses to generic frameworks in earlier studies. As a result it is hoped to provide greater understanding of those motives and make recommendations that might inform future decisions. Table 1 although not comprehensive, provides an indication of the size of transactions year by year and the parties to the transactions.

The above analysis indicates that the motives suggested by Barris and others in other industries, whilst comprehensive in their coverage, could usefully be amended for an examination of the UK hotel industry. The changes are to some extent related to changes in the market over the last 4 years, others to the nature of the hotel industry. In particular, the increasing familiarity with SLBT and increased pressures from the market have led to a greater willingness to adopt these methods. This has combined with changes in the accounting rules and increasing sophistication of market analysis, that have made one of the main motives, improved gearing, for their adoption to be less relevant. However, the nature of the hotel industry and the relative importance of the assets themselves have resulted in a difference of emphasis in the motivations of hoteliers. Flexibility of occupation has less importance for them, rather the reverse. The main motives for adopting SLBT/SLMT have been found to be focussed on two key areas. Firstly, it has been pressure from the stock markets to improve shareholder value through an arbitrage of separate values and to return funds to shareholders. Secondly, operators have achieved cheaper funding as lease funds have become more attractive than borrowings due to their increased supply in the market. These two motives could be said to be common to all industries, though the capital (property) intensity of the hotel industry, as noted, makes them more pertinent. The use of management contracts seems to be specific to the hotel industry. The motivation for operators is partly strategic in separating property from operations, but also it provides more stable income flows and less risk. They effectively avoid the OBS financing problems noted earlier since the debt is removed from the company and not just the balance sheet, though variable rent clauses can also take SLBT funding, at least partly, off the balance sheet. What has emerged, however, is that the hotel industry increasingly sees itself as being skilled in the marketing and operation of hotels, a move better understood by the market analysts in evaluating figures not confused by the effect of property ownership transactions. The result is that some operators have adopted a strategic decision that they should focus on the operation of hotels rather than owning them. Though in other industries decisions to focus on a core business have been made, this is less fundamental due to the less important role of property in the delivery of that core and its direct impact on customers. That some operators have not yet adopted this extreme philosophy might indicate that the hotel industry is still in a transition away from ownership. Alternatively, it might suggest that ownership remains a better option in certain situations. Certainly, there is a suggestion that privately owned companies, since they are not so exposed to the scrutiny of analysts, do not need to react to ‘market pressures’. Even here there are examples of owners seeking to extract cash from their hotel assets, the Permira/Travelodge SLBT being the prime example. It suggests that venture capitalists, as hotel property owners, seeking medium-term capital gains and cash recovery are likely to adopt the method. At the other end of the spectrum there are private owners who consider outright control as essential to their ability to meet customer expectations or see ownership as providing the financial strength of asset backing. This study suggests this to be the exception to the rule. There are examples of private companies using SLBT as a means of acquiring or growing a portfolio. The use of management contracts is motivated partly by the desire to become pure operators and a greater transfer of risk to the owner, but is also a means of taking the liabilities out of the company. In the latter case it is a move towards a model more common in the US, where management contracts have been used for international expansion since the 1970s. For instance, in the case of ITT's ownership of Sheraton, it was a means of generating cash and improving returns on capital employed to a parent seeking growth in quarterly earnings and cash for acquisitions. The temptation to believe that this US model will continue to grow in the UK is difficult to resist, but this research suggests that it is very dependent on the strength of the covenant and brand of the operator and that only the very largest have been able to attract such contracts. In a situation where smaller companies with weaker covenants are forced to accept lower multiples even for SLBT, the pricing of SMBT is unlikely to be attractive, if it is available at all. What does all this mean for hotel operators? There appear to be a number of key decisions and learning points. 1. The first lesson seems to be to clarify what they believe themselves to be good at and to what extent they see control over property as essential, i.e. they need to place themselves strategically. 2. Secondly, to decide whether to use leasing or management contracts, subject to restrictions in access to the latter from their lack of covenant strength, considering the risks and rewards involved and the way the change might be seen by the stock market. 3. In adopting such methods, there is also the question of control. This might involve decisions about retention of key locations but also about selection and ‘managing’ of the third party owner in its ongoing asset management role. 4. Establish whether these methods provide a cheaper alternative to ownership and borrowing, either in terms of enhancing shareholder value in the effective conversion of assets to cash or merely offering a lower cost of capital. The answer will vary over time and depend on the company, its assets, its negotiating strength and market conditions, so this is not necessarily the prescriptive solution to funding. 5. Finally, there is the need to have a clear purpose of raising cash for expansion or return to lenders and shareholders. In summary, the question affects both the overall operating strategies and the financial strategies of the company. In terms of academic research it should be recognised that this paper only touches a single aspect of the gap in writing on the overall topic of SLBT/SMBT as it affects the hotel industry. Further papers from the current research will examine the motives of lenders, particularly in offering management contracts, the economics and form of contracts adopted to reconcile the potentially opposing needs of the parties, the role of accounting and tax rules and other reported barriers, the availability of funding dependent upon size and the role of asset management. There are aspects that would benefit from further research. These include an evaluation of the shareholder value enhancement in deals that have been done, insofar as information can be obtained without breaching confidentiality rules. A persuasive paper on this subject could impact on the future adoption of these models. A closer examination of the impact of leases or management contracts on the operating activities and profitability of companies in the UK would also inform future decision making and contribute to a better understanding of the options. A comparison of trends in the US and UK may also provide an indication of where the hotel industry might go in adopting these methods of funding hotel property. Finally, more work is needed to clarify the motives of those companies who do not wish to sell their assets, so that the alternatives are more clearly set out. This topic is of significant interest for the hotel industry and virtually untouched in terms of academic research. This article and the others to come from this research are merely one perspective on the issues. The author hopes that they will trigger further research and a wider academic debate on the subject.