View of the Market – Finance
Hotel Solutions Partnership (HSP) assists with; strategy development, assessing areas for improvement in performance, and developing future projections. HSP can add gravitas and credibility to clients’ submissions to financiers by identifying potential uplift in performance, developing a clear and logical plan to support this and ensuring the ESG agenda is appropriately dealt with.
Ensuring the right message is conveyed concerning both the strategy and the management team is also important. New market investors may benefit from strategy advice to provide confidence to both the investor and financier. This could include assessing options of hotel management companies, brand selection and ongoing asset management.
It is important to note:
- Lenders do not like uncertainty so projections, plans and strategy presented to support the submission for obtaining finance has to address this issue.
- Banks assess their loan appetite by their assessment of past and future financial performance, quality of management and integrity of the parties.
- Robustness of the forecasts is essential.
Alex Mavridis, Chief Operating Officer at Hotel Solutions Partnership explains, “We are finding mainstream banks are preferring to finance existing hotel acquisitions with existing income streams rather than new developments. They are also preferring to stick with existing clients and are less open to accepting new clients at this time.”
“For clients that are in a repositioning stage or struggling to obtain finance on an acquisition a number of bridging finance options for short term loans (up to 2 years) are available. These are more expensive than traditional finance but a useful short-term option.”
Alex adds, “Issues encountered during the pandemic have led some lenders being more cautious in their forecasts and building in substantially lower worse case scenarios. This leads to less debt being provided as a % of a total transaction.”
If you are considering re-financing or financing a new project, please contact Alex Mavridis in the first instance for an exploratory discussion on how HSP can assist.
Alex Mavridis, Chief Operating Officer, Hotel Solutions Partnership
Alex has over twenty years’ experience in investment, managing hospitality and mixed use assets through all stages of the investment cycle –concept, feasibility, design, pre-opening, operating, asset management, pre-sale and disposal.
Alex has worked in five continents and been responsible for over $7 billion of global hospitality assets over both portfolio and single asset transactions and spans a multitude of global brands and operators. From an operational perspective he has conducted numerous business reviews identifying areas for business repositioning, revenue enhancement and cost control as well as conducting ongoing reviews, regular reporting on business operations and stakeholder management.