2Who we areA leading UK independent full service management company with a 100% track record in all management contracts secured and all projects developed since inception.Key Executives:Peter Cashman, Chief ExecutiveAlun Edwards, Managing DirectorSteven Frewer, Director, Hotel OperationsJohn Collis, Finance DirectorJacqui Bentley Mckenna, Commercial DirectorMatt Payton, Director of Revenue and DistributionJeanette Nijhof, National Sales DirectorChris Charalambous, Development DirectorNigel Joyce, Property DirectorFocus is a debt-free company with a reputation for meeting all its financial commitments on time.Focus have strong and recognised long term hotel industry financial backers who are willing to invest in further developing Focus.
3Our Mission To enhance quality service delivery to our guests To be innovative in all our actionsTo maximise profit for our Owners & ShareholdersTo act with integrity within all our contractsTo work closely with our local communitiesTo protect our environment
4Our philosophyTo develop the profitability and asset value of our clients’ hotels by providing strategic management to enhance their business through pro-active sales, marketing and revenue management as well as efficient cost control whilst maintaining high standards of service and customer care.To provide a level playing field to owners/investors with transparent fee structures aligned to owners’ returns.To work with owners/investors on an open book basis.To provide comprehensive management information to keep owners/investors fully informed.To offer local knowledge, hands-on experience and close financial management – foundations critical to success.
5The brands that Focus and our associates are involved with: Focus is an approved management company to the following brand ownersChange the Mercure logo to the new design
6What we doFocus are an established Full Service Management Company with a top quality reputation for managing our clients’ businesses and driving continual profit growth, exceeding similar competitor hotels in the market in which the business operates.Focus have always delivered its development and refurbishment projects on time and within agreed budgets.The Focus management structure covers all disciplines required to operate efficiently and deliver planned results to our Owners.Focus manage both branded and independent hotels in the premium budget, mid and upscale sectors.
7What we do - continuedFocus has one of the most experienced management teams in the UK hotel market and have demonstrated quantifiable improved results, working closely and in partnership with Owners and private investors.The Focus management team have an in-depth knowledge of the UK market.The Focus management team know and understand how to get the best from the brands and the hotels that they work with.The Focus Directors have a hands-on approach and are actively involved in the hotel operations on a day to day basis.
8What we do in Sales and Marketing Focus have a top quality national sales, marketing and revenue development team.Focus have developed an experienced central yield management team based at Hatfield – supported, where applicable, by the brand’s own teams (such as Hilton RMCC team based in Watford).Full understanding of working with branded hotels and franchise systems.Excellent contacts with the key HBAA Booking Agents and on-line Travel Agents (OTA’s)Established preferred partnership agreements with the major corporate and MICE agents.Expertise in driving sales and maximising efficiency across all hotel types.National and Local PR campaigns to spread good news using both brand and Focus contracted agencies.Focus owns and operates its own on line booking agency to drive business and leisure traffic to all hotels and to help optimise bedroom occupancy.
9Focus Hotels Management Ltd - Organisation Chart Peter CashmanChief ExecutiveSam MarshallCompany SecretaryJohn CollisFinance DirectorAlun Edwards (MD)Director Hotel Operations - SouthSteven FrewerDirector HotelOperations - NorthChris CharalambousDevelopment DirectorNigel JoyceProperty DirectorCentral Accounts TeamCentral Administration(Purchasing, HR, IT, System Support, Compliance)Jacqui Bentley MckennaCommercial DirectorGroup Revenue & Distribution DirectorNational Sales DirectorCentral Marketing TeamCentral Web Systems and Yield Management TeamNational Sales Team andHotel Sales Managers
10Our Portfolio UK – 18 hotels – 1,875 bedrooms 2 x DoubleTree by Hilton 11 x Mercure1 x ibis Styles1 x Clarion3 x IndependentsUK – Management/Development contracts due in 20142 x DoubleTree by Hilton2 x Hampton by Hilton1 x ibis Styles2 x IndependentsFocus also has affiliations with companies in Ireland and Germany with a total of 8 hotels in these markets, operating primarily under the Clarion, Best Western and Comfort brands.
11Our SystemsWe operate a hosted network for business critical applications, documents and s.This system allows for fast roll out of new sites, simpler access, more robust IT structure at hotel level, business security and disaster recovery.Accounts Sun System – delivering the ‘Uniform System of Hotel Accounts’ with Vision ReportingPurchasing IPOS – a fully web based e-procurement systemPayroll Fourth Hospitality People System and Regents Payroll for processing.Sales Protel Sales Force Administration.Web Booking Engine/Management Relevant brand systems for branded hotels and SabreSynxis, Easy Yield and Rubicon for independent hotels.Reservations Full central reservations for independent hotels and brand systems for branded hotels.Property Management Systems Protel, Opera, Opera Lite, Micros or brand specific.
12Our Development Objectives Focus is on target to grow its UK portfolio to more than 30 hotels by the end of 2015.Currently Focus has 8 individual hotel projects under final appraisal or development.Focus has the infrastructure in place to support the development of the company to at least twice its existing size, i.e. 40 hotels plus.
13CASE STUDIESAttached are 5 case studies that illustrate the breadth of the projects that Focus have been, and still are, involved in.
14Case study 1 -Institutional Investor -10 hotel project January 2009 Focus were approached by an Institutional Investor to discuss the management of 10 properties prior to the incumbent tenant going into administration.Investor was not allowed to be involved in operating companies other than as a shareholder.Focus identified a solution to buy the existing leases with new agreements on rent.Solution was a profit share lease with terms similar to a management contract.Tenant went into administration in mid-January 2009.Focus bought the leases from the administrators and finalised and implemented the new lease structures.Focus took over the hotels within two weeks of the administration.
15Case study 1 - continued Operational Overview Before taking over, Focus carried out a full review of operating efficiencies, identified the primary issues and put in place plans to address these immediately once in control.These plans included:Removal of existing branding, taking the hotels back to their original names.An external and internal clean-up to enhance the sense of arrival.Implementation of management and staff training to improve morale.Significant national sales and marketing campaign supported by a number of key agencies.Purchasing reviews with many new suppliers.Quick fix limited capital programme.Implementation of identified operational efficiencies.
16Case study 1 Continued Branding Review Review of brands resulted in the Accor Mercure brand as the most suitable.Focus agreed future brand requirements with Accor.These requirements could then be implemented in planned capital programmes.Hotel Development and capital projectsIdentified some quick fix capital projects for immediate returns.Agreed with the owners and implemented within 3 months.Put forward capital plan with supporting capital returns to upgrade all the hotels.Returned to top 3 star quality and suitable for Mercure branding.Capital plan supported by the owners - implemented during latter half of 2009 and throughout 2010.
17Case study 1 Continued Achievements Financial year 2009, the portfolio traded profitably net of all costs.February 2011, nine hotels were branded Mercure & Focus became the first significant franchisee of the brand. Since then revenues have continued to grow across the estate.In 2011 revenues up from 2009 base position by 36%, and profits by 72%.By the end of 2013, and even after the disposal of one hotel, revenues had continued to grow by a further 12% + and net EBITDA profits by 50% + In the 1st Quarter in 2014, revenues continued to improve; +11.2% on the first quarter The outlook for the rest of the year is similarly positive. Initial agreement for leases on 5-year renewable terms. Subsequently extended to 10- year terms.
18Case study 2 60 bedroom hotel & Spa OpportunityApproached by owner of a 60 bedroom hotel with leisure and spa in October 2007.Property previously leased to Swallow Hotels and returned to the owner in 2005.A management company appointed, did not perform to the owner’s expectation.Trading at good revenue level but making a substantial operating loss of £200k+
19Case study 2 continued Operational Overview Took over October 2007 and carried out a full review of all operating efficiencies.Identified sales, marketing, staffing, purchasing and operational efficiencies.Put in place plans to implement these efficiencies which included:-Replacement of the hotel management team.Contracted out housekeeping, implementing training and KPI’sRenegotiated all existing purchasing contracts.Established new relationships with the key business and leisure agents.Repositioned marketing in the national and local markets.
20Case study 2 continued Achievements 2008 hotel trading at break-even and at a profit of £200K+ in 2009 despite the recession.Full planning to add 40 bedrooms to the property agreed with the ownerFully refurbished and branded with the Mercure brand by Accor in February 2011.Spa and Leisure team developed the membership base from 1500 members in 2009 to over members today.Continues to trade successfully with one of the highest REVPAR’s in the market despite its secondary location.Occupancy has grown from 51.5% in 2007 to 72.1% in 2013, with average room rate increasing by 14.1% in the same period.The owner has agreed to extend the management contract for a further 5 years.In May 2013 the hotel was awarded a Trip Advisor Certificate of Excellence – which is only awarded to the top performing 10% of businesses listed on Trip Advisor.
21Case study 3 200 bedroom Airport Hotel OpportunitySeptember 2011 approached by a private investor to take over a 200 bedroom branded 4 star Heathrow hotel which was subject to the CVA.The issue and solutionThe CVA provided for the owner to either take the hotel back or accept a much reduced rent.The rent reduction was not acceptable to the owner being insufficient to cover financial commitments.Hotel opened in late 2008 but did not trade well & performing significantly behind its competitor set.Identified a solution to buy the existing lease with a new agreement on rent similar to a management contract.Focus acquired the hotel from the administrators and took over the management in October 2011.
22Case study 3 Continued Operational Overview In 4 weeks after takeover full review of the business undertaken.Looked at all aspects with an emphasis on revenue management and general operating efficiencies.Established that the issues were with the group central management. The key issues were:-Group central yield and reservations making decisions without local management.The group decision to price the hotel outside of its proper competitor set.Operational costs high with no focus to implement efficiencies in line with hotel performance.Focus installed a new revenue management and reservations team based at the hotel, supported by Focus’s central revenue teams.Provided them with necessary yield tools to enable them to compete in the local market.Developed a revenue and yield culture enabling the hotel to compete effectively.Hotel established itself as a key competitor taking its fair share of the market resulting in a significant increase in occupancy without diluting the net average room rate.Refocused the senior team and reduced where necessary.
23Case study 3 Continued Branding Review The owner and Focus believed that the hotel would benefit from new branding more in line with the standard of the property.Research indicated that Hilton DoubleTree brand was best.Focus negotiated the brand with Hilton including all PIP requirementsBrand went live in July 2012.Achievements2012, Focus improved performance against 2011 (when the hotel was trading under previous management) as follows:Gross Revenue increased by 21.6%Occupancy increased from 55.6% to 74.15%Revpar increased by 28.9%EBITDA increased by 28 %
24Case study 3 Continued Achievements 2013, the hotel continued to grow market share and performed in line with its new 4* comp set, and owner’s objectives on profitability:Gross Revenue increased by 20.6%Occupancy increased from 74.15% to 82.03%Revpar increased by 9.6%EBITDA increased by 40%In 2014, the hotel continues to trade well and is on target to achieve its enhanced budget.The STR RGI (revenue generation index) of the hotel continues to perform at 100% + of it’s competitive set.
25Case study 4 City Centre 200 Bedroom Hotel Major Refurbishment & Repositioning The projectSeptember 2011 approached by an institutional investor to take over a 200 bedroom branded 4 star city centre hotel subject to a CVA.The issue and solutionThe CVA provided for the owner to either take the hotel back or accept a much reduced rent.The rent reduction was not acceptable to the investors and did not reflect the hotels potential to generate rental profits.The hotel was in need of capital investment but was trading reasonably well.Revenues and profits had been on a downward cycle for a number of years.Focus agreed to buy the existing lease with a new arrangement on rent and with terms similar to a management contract.Focus acquired the hotel lease and took over the management in October 2011.
26Case study 4 Continued Operational Overview Implemented a full review to understand how existing performance could be improved without significant capital.Reviewed the long term development of the business.Looked at the current state of the property, the branding, the management team, revenue and sales management and general operating efficiencies.
27Case study 4 Continued Established the following:- Experienced management team in place, understood their market.Were losing room rate and some market share.Revenue decisions were made off site at group central office with little local management involvement.Significant level of complaints about the quality of the bedsHotel was tired but clean and well maintained.Existing brand did not deliver and there was a difficult relationship with the owning company.Hotel had a loyal following which was declining, or rate was being discounted to retain it.
28Case study 4 – continued The Quick Fixes A key issue was identified with regards to the quality of the beds. All beds and associated bedding was replaced immediately.Installed revenue management, and reservations teams based at the hotel, supported by Focus’s central revenue teams.Provided them with the necessary yield tools to enable them to compete in the local market.Developed a revenue and yield culture enabling the hotel to compete effectively.
29Case study 4 – continued Long Term Business Development Review A full review of the existing branding and the capital required to maintain the brand took place.Reviewed all other brands to establish if an alternative would better protect the business.Research indicated that Hilton DoubleTree brand was best.Conversion to this brand involved a full refurbishment.Projections justified this investment and was fully supported by the investor and funding provided.Negotiated the brand with Hilton including all PIP requirements.Project commenced in October 2012 managed by the Focus property team.Live under the DoubleTree brand on the 1st May 2013.
30Case study 4 – continued Achievements In 2012, Focus improved the occupancy by 10% on the prior year (pre Focus Management) while maintaining average room rates.Achieved whilst the hotel bedrooms were being refurbished during the last 3 months of the year.First 4 months of 2013, hotel trading was, as expected, significantly reduced at the peak of the refurbishment programme while all areas were under refurbishment, although the Hotel continued to trade with little guest negative feedback.Opened as the Doubletree brand on the 1st May 2013.Redevelopment project delivered on time, on budget (significantly below the budget plan produced by the brand and the previous owner) and above brand expectation and requirements.Focus and its investor believe the hotel will compete at the top end of the city market and generate the profits justifying the investment made.Initial trading period to December 2013 fully met expectations.Trading performance in 2014 to date is ahead of budget (budgeted to achieve 26% more revenue and 71% improvement in profit compared to the last full year of the previous brand ).The STR RGI (revenue generation index) of the hotel continues to perform at 100% + of it’s competitive set.
31Case study 5 90 bedroom city centre hotel Distressed property reopening OpportunityApproached the owners of a closed 90 bedroom Newcastle city centre hotel with a view to reopening.FOCUS HOTELS PROPOSALReopen the hotel for a small capital outlay which would be repaid within one year.Saving the owners the cost of keeping the building closed, estimated at over £100k per year for rates, insurance and security.Estimated capital cost of reopening the hotel was £80k-minor refurbishmentTo allow to operate as a budget hotel focused mainly at the leisure and weekend markets.Estimated 1st year net profit was £200k
32Case study 5 Continued The project Took over the hotel in May 2009, appointed a management team.Started to implement the agreed reopening capital plan.Reopened in July 2009 trading as an independent hotel in the city centre budget market.AchievementsTrading to the planned revenues and profits projected by Focus.In 2011, the hotel made a contribution profit of £240k.In 2012 a contribution profit of £290k.Turnaround of almost £400k from where the business would have been had it remained closed.The business continues to trade at 2012 levels to date.
33Mercure Madeley Court, Telford Mercure Royal Hotel, HullDoubleTree by Hilton, London Heathrow AirportRoyal Victoria Hotel, Snowdonia