Hilton International has plans to develop up to five new resort hotels in Scotland, the head of the hotel chain's UK operation revealed yesterday.
Howard Friedman, recently appointed Hilton UK and Ireland's area president, told The Scotsman that the company was developing plans to develop "four or five new destination hotels" north of the Border within the next two to three years, all of them on greenfield sites.
South African-born Friedman, who has a background in property as well as hotel management, said any new sites in the UK would be managed, but not built or owned, by Hilton. All the new hotels would be four or five star. The group currently owns or manages 70 hotels in the UK and the Irish Republic, 11 of them in Scotland.
Friedman, who declined to be drawn on the planned hotels' locations, said: "Our development focus is shifting to Scotland and Ireland. We have just opened the Mount Wolseley, a resort and spa hotel near Dublin airport. It's a fantastic product and the model of what we want to be doing in Scotland - destination resorts, and spas with magnificent golf courses. We want a few more of those."
While stressing that the group's experience showed that "up to 50%" of hotel development plans do not survive the planning stage, Friedman said he was confident the current market made finding development partners easy, and praised the Scottish Executive for creating a good climate for tourism infrastructure development.
Earlier this month Hilton sold a package of 15 hotels, including three in Scotland - the Aberdeen Treetops, Dunkeld House and Hilton Strathclyde - for GBP 382.4 million to an Israeli investor, funded by the Royal Bank of Scotland. A fourth hotel, the Hilton Edinburgh Airport, is expected to be sold to the same investor for GBP 14m "within weeks", once legalities are completed.
The disposal of assets is part of Hilton's worldwide strategy of "sale and manage back" - slimming down its GBP 2.4 billion property portfolio to GBP 2bn while retaining management of the branded hotels under 30-year agreements.
Friedman said yesterday that the move was "in line with relying less on the ownership business model." He added: "Internationally, we want to be one third owned, one third managed and one third leased. If the capital is all yours, you make good money in good times but there are dips. This model hedges you better.
"We do not have a big war chest for the proposed development projects but what we do have is a strong brand that can persuade developers and owners to invest with us. Our capital injection mostly comprises the strength of the brand and the distribution and sales systems."
Hilton will open three new hotels in England next year, and claims to have "20 products in the pipeline".
Room in market?
CAN Scottish tourism sustain an upsurge in luxury hotel resorts? VisitScotland, the tourism agency, is convinced it can. Its spokeswoman said yesterday: "This new willingness to invest is a sign of the buoyancy and confidence in the market. The success of St Andrews Bay, Gleneagles, and hotels that tailor their products to families shows that the luxury short break is what the market wants. People have more money than time. It's not just about the accommodation, it's about the whole experience."