Rocco Forte Hotels has announced five new hotels, four of which will be in Italy, with one in China.
The openings were, Sir Rocco Forte said, part of a long-term strategy to have a base in “key cultural centres and European capital cities”.
The hotels will join Rocco Forte Hotels under a variety of models, with Hotel de la Ville in Rome a former InterContinental-branded hotel, which Rocco Forte Hotels will take on with a lease contract. The Masseria Torre Maizza in Puglia will also be under a lease. Grand Hotel Igiea in Palermo, which is due to open in 2020, was an acquisition and Rocco Forte House, also in Rome, was due to open in September 2019, leased.
In addition, the group will open Rocco Forte House , which was described as a new concept, initially launching with five private suites in an 18th century palazzo opposite the Spanish Steps in Rome. The company said it would offer guests “a tailored experience with all the personalised services of a luxury hotel”. The site was owned by Reale Immobili, which also owns the Hotel de la Rome.
The group was also set to open its first Chinese property next year. The Westbund Hotel will be located in Shanghai’s Xuhui District and is a new build, which will be under a management contract with Longhua International.
The company was supported by Cassa Depositi Prestiti, which took 23% stake in Rocco Forte Hotels in 2015 for GBP60m, with Sir Rocco Forte and members of his family owning 75%. Lloyds’ Bank of Scotland also recently agreed a new 10-year debt facility for GBP158m.
At the time of the deal, which was led by Italian state-backed sovereign fund Fondo Strategico Italiano, the business was valued at GBP260m. News of what was effectively a state agency providing backing to a UK company was not universally well received in Italy. Local critics suggested the investment was a poorly thought through attempt to revitalise the Italian hospitality sector, and would serve only to bring publicly owned buildings back into use, at a cost to the public purse.
The group already has operating leases on the Hotel Savoy in Florence and Hotel de Russie in Rome and the Verdura Resort in Sicily, meaning that by the time the four new Italian properties open, nearly half of Rocco’s portfolio will be located in the country. Rocco Forte Hotels is also developing residential villas alongside the Verdura Resort, with the initial phase including 20 units.
Sir Rocco Forte said: “It’s the confidence in our brand that is driving the ambitious expansion plans that we are announcing. It is the first stage in a long-term strategy to have a base in key cultural centres and European capital cities. We are interested in opening hotels in the best locations and are meticulous in ensuring that each has a distinct style and personality.”
According to the company’s results for the year to 30 April 2018, it owned or leased all of its estate, with the exception of third-party management agreements for the Assila Hotels & Residences in Jeddah and the Shepheard Hotel in Cairo, which is currently closed for refurbishment.
The company said that it would look to expand primarily through management contracts or operating leases. The group’s management business saw revenues of GBP14.2m for the year, against GBP9.7m for the previous year.
For the ended 30 April 2018, the company reported revenues of GBP206m, against GBP194m in the previous year, with the refurbishment of the Savoy Hotel in Florence having an impact on revenues. The hotels in Belgium and Russia led growth, up 23% and 14%, respectively. Revpar was up 10%.
For the new year, the company reported 4% growth in revenue up until July, with revpar growing by 8%.
The expansion announcement was a move into growth after 2014 saw the company sell the Lowry hotel in Manchester to Westmont and Mount Kellett, arguing that Manchester was not a gateway city with the class required of a Rocco Forte location.
HA Perspective [by Katherine Doggrell]: Sir Rocco Forte is married to an Italian, his father was born in Italy and his company has Italian backers. Anyone looking shocked that the company’s road to growth drives through Italy would do well to get their outfit into the dry cleaners for the Oscars now.
The luxury market is keeping something of an eye on Italy at the moment and not just for access to its marble quarries. Many of Belmond’s most high-profile assets are located there and the relaunch of many of the former Boscolo properties under the Dedica Anthology has reminded many what a proper grand tour can look like, fainting aunts not included.
The question for Rocco Forte Hotels is now whether it can grow further out of this most comfortable zone. Other invested groups such as Mandarin Oriental have seen success in growth by management contract and now, after the sale of The Lowry, we will see whether the brand can bounce back and convince owners they want it over their well-appointed doors.