Reasons to keep faith in the UK hotels sector – co-founder of new group AGO Hotels looks to the future

Reasons to keep faith in the UK hotels sector – co-founder of new group AGO Hotels looks to the future

Despite the extreme pressure in the market currently, the co-founder of new hotels group AGO Hotels is optimistic about a bounce-back in the UK.

Lionel Benjamin, an experienced hotel business leader who has worked across the luxury and economy sectors, believes that the latent demand for travel and staycations will translate into a rapid bounce back in occupancy levels.

“There are many reasons to keep faith in the hotel industry, and especially the economy sector, even in the midst of the pandemic”, he says. “The pent-up demand for travel, ‘staycations’ and holidays is clear, not least in the international market. Dubai saw a remarkable occupancy boom when its hotels re-opened. A similar bounce back in the UK looks likely, especially pending the widespread distribution of vaccines, and the economy sector is best positioned for recovery”.

Benjamin founded AGO Hotels alongside entrepreneurial investor Viv Watts in July last year, to provide an innovative and sustainable platform for hotel asset owners. AGO’s distinctive hybrid lease structure includes downside protection to guarantee resilience in challenging market conditions, as well as upside participation to ensure profitability. AGO’s appeal to hotel owners includes 25-year FRI lease terms and long-term, low-risk and inflation-hedged cash flows.

Even in the current climate, AGO has successfully exchanged contracts to launch 9 new economy hotels in 2021, with industry giant Accor as a brand partner and is in advanced discussions with a number of other UK sites.

For Benjamin, the performance of AGO’s hotels in between national lockdowns gives further grounds for optimism. “Even after the first UK lockdown lifted in July, high occupancy levels within our hotels returned very rapidly, demonstrating the resilience and flexibility which are core strengths of the budget sector. Investment appetite is also showing early signs of recovery, particularly among experienced investors who recognise the opportunities in the current market, understand the cyclical nature of the hotel business and look at the current climate as temporary.”