Baker Tilly Restructuring and Recovery LLP has traded and sold a significant number of hotels over the last two years. Recent and current engagements include:

The Forbury

The Forbury Hotel and Apartments consists of a 23 bedroom five-star hotel with two restaurants and a private cinema, together with a block of 16 serviced apartments. Following the issue of a winding-up petition by HM Revenue & Customs, two partners from Baker Tilly were appointed Joint Administrators in March 2009. Working with managing agents, Licensed Solutions, the Administrators made changes to the business to reduce the substantial monthly pre-appointment losses. This was achieved by a combination of improved room occupancy from enhanced marketing and front-of-house activities and operational efficiencies. As a consequence, the business improved to a break-even level.

The hotel and apartments were both separately and jointly marketed for sale, to ensure that best value was achieved for the combination of assets and the option of selling the apartments on a piecemeal basis was fully investigated. In excess of 100 viewings were conducted. Contracts have recently been issued for sales of the business and assets of both businesses.

Malvern Spa

A hotel, spa and health club in Worcestershire currently in administration. Our initial review concluded that forecast profits contained in the business plan were unrealistic and a number of structural flaws in the original development of the complex came to light. The business plan saw the health club as central to the proposition of the complex and the spa, hotel and restaurant would in turn be profitable. In short, this was not a viable business. The bank was owed £6 million and within a year, the business would have lost around £1 million.

As part of our restructuring strategy, the business was sold for £300,000 to specialists Topaz Consulting who are now in day-to-day control with an agreed new business model. The company is now thriving, with the spa and hotel being the mainstay of the complex. The valuations we have had suggest the business is now worth £8-9 million, and by working with both the bank and Topaz, we are hoping to pay all the creditors what they are owed when Malvern Spa is sold.

Haleys

Two partners from Baker Tilly were appointed Joint Administrators of Haleys Hotel Ltd and LPA receivers of Haleys Hotel on 16 April 2009 and engaged Licensed Solutions, to carry out the trading of the hotel on their behalf. The hotel had suffered from a lack of investment and poor management in recent years. Since the appointment, the Joint Administrators, along with the support of Licensed Solutions have improved occupancy and margins by addressing such issues as room pricing, agreement of new terms and conditions with trade suppliers, reaching agreements with internet-based accommodation search engines and staffing issues etc.

The hotel is located in Headingley just outside Leeds city centre and benefits from the cricket and university graduation trade in the summer, so it is currently in its busiest period. We appointed Colliers Robert Barry (CRB) to market the hotel at offers over £1.25m. After an extensive and comprehensive period of marketing, including local, national and trade press advertising and profile on the CRB’s website, the closing date for offers was set for 17 July 2009.

We are currently progressing these offers and hope to conclude a sale of the hotel as a going concern shortly.