Supriya Ghosh

The Real Hotel Company

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Founded  1985

The Real Hotel Company, whose origin can be traced back to 1877, owned, leased and managed over 55 hotels with almost 5,000 bedrooms throughout the United Kingdom, France, Germany and Belgium until its financial collapse in 2009. It focused both at the premium limited service and at the full service mid-market sectors, with a number of different brands. It also owned the New Connaught Rooms, one of London's largest multi-functional conference and banqueting venues between 1985 and 2009.

Contents

Early history

The forerunner of the company was the Birmingham Coffee House Company, founded in 1877, and evolved through the early 20th century to become the Arden and Cobden Group, owning three Birmingham properties: the Arden Hotel, Cobden Hotel and Norfolk Hotel. They were known as temperance hotels because of the fact that they were unlicensed and did not serve alcohol.

1985-2009

In December 1985, Henry Edwards, the founding Chairman of the company, bought the Arden and Cobden Group. In 1986, he floated the company under the name of Friendly Hotels PLC on the London Stock Exchange, and then acquired six other hotels during 1986. (He had previously founded both Comfort Hotels (no relation to the brand owned by Choice Hotels International]), and Centre Hotels before selling them to Ladbroke and Bass respectively.)

One of the notable assets of the company were the Connaught Rooms, purchased in April 1987. They are a conference and banqueting centre in Covent Garden, London, and, after a major refurbishment programme, the company changed their name to the New Connaught Rooms. It was the first property in the industry to be awarded the ISO 9002 designation.

The Company announced the suspension of the company's ordinary shares which were listed on AIM on 13 January 2009 while trying to resolve its adverse financial position. On 21 January, the company was placed into administration with Shay Bannon and Antony Nygate of BDO Stoy Hayward as the administrators.

Choice Hotels International

The company becomes a franchisee of US-based Choice Hotels International (CHI), a major hotel US based hotel group in 1994. It rebranded its 27 Friendly Hotels and Friendly Stop Inns to the Comfort Inn and Quality Hotel brand names. The relationship prospered and n 1996, the company gained the master franchise from CHI to develop the Choice brands in the UK and Ireland, followed in 1998, by the master franchise to develop the Comfort, Quality, Clarion and Sleep Inn brands across Continental Europe (excluding Scandinavia) from CHI. The company teamed up with investors Kasterlee and Prem Group to set up a joint venture, Choice Hotels Ireland, in the Republic of Ireland.

The year 2001 opened with news of impending insolvency and a drastic rescue plan that included the sale of more than a quarter of the company's UK hotels. A capital reorganisation of the company, along with enhanced franchise agreements, effectively gave CHI control over 70% of the Company's equity.

In June 2001, CHI revealed that it was talking to several potential buyers for the Company, which then changed its name from Friendly Hotels PLC to C.H.E. Group PLC in August. These talks were terminated in February 2002, and having failed to find a buyer, CHI relinquished its interest in the Company over the next three months. In July of the same year, the company's shareholders rejected an offer by CHI to acquire the group's European master franchise and its assets in Continental Europe.

The company exited from the European Master Franchise Agreement with CHI in October 2006, and then in December 2007, the company announced that it had entered into an agreement to exit its UK Master Franchise Agreement and transferred its UK franchising operations, covering the Comfort, Sleep, Quality and Clarion brands, to CHI at the end of January 2008. The sale and servicing of franchise agreements were assigned to a CHI subsidiary. Thereafter, the company no longer sold or serviced franchise agreements. It relinquished the master franchise agreement for Choice Hotels in the United Kingdom but remained a Choice franchisee, operating 30 hotels under the Comfort, Quality and Clarion brands in the United Kingdom. The Company relinquished the master franchise agreement for Choice Hotels in the United Kingdom.

Notable events impacting Real Hotel company hotels

In 1990, Investors in people (I.I.P.) status was awarded to the Friendly Hotel Norwich, the first hotel in the industry to receive this award.

Also in 1990, its Royal Hotel, in Hull, burned down and was totally destroyed; the duty manager at the hotel receives a commendation from the Humberside Fire Brigade for evacuating the hotel without any fatalities or serious injuries. It reopened in September 1992 after a £25 million rebuilding programme.

Final years and administration

A slide in pre-tax profits in 1999 deepenened into a series of pre-tax losses over the following years. The company responded by launching a multimillion-pound refurbishment programme for more than half its United Kingdom hotels, as well as a programme of disposals. In 2004, the company returned to profit after five years of losses.

Over the next few years it raised tens of millions of pounds through multiple share placements, using the capital to fund refurbishment and expansion.

In October 2007, the company announced the launch of its new brand, Purple Hotels with the opening of the Purple Hotel in Braintree, Essex. Purple Hotels were defined as "no frills chic" by operating hotels in the premium, limited service sector.

However, the economic downturn hit the company hard, and it slid into losses in 2007, and did not recover. On 21 January 2009, after the company was placed into administration. The companies assets were disposed of by the administrators over the next thirteen months.

On 6 February 2009, Focus Hotels Management safeguarded 500 jobs by agreeing to take on the running of 10 hotel leases, which were later rebranded to their original names. In June 2009, the administrators sold the head lease of the New Connaught Rooms in Covent Garden (owned by the United Grand Lodge of England) and the Quality Hotel Glasgow to Principal Hayley Group. The final property to be disposed of was the Quality Hotel in Perth in February 2011.

References

The Real Hotel Company Wikipedia


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