City hotel contract re-negotiation

Challenge

To deal with the performance downturn during the pandemic, we supported the owner of this city hotel with re-negotiating the lease terms laying the groundwork for an operator search for their city property.

Value created for client

The fund now has a lease contract that reflects current pandemic times taking pressure off the operator, however, ensuring a participation in the eventual upswing. Additionally, the fund managers know what other terms the property could reach in the open market and therefore have all information to take the best decision.

Our role

As a first step we evaluated the current situation of the hotel property during the pandemic and estimated a sustainable rent level during that distressed time. In the second step, we modeled various contract mechanics which on the one hand do not overload the property and operator but still maintain some cash inflow for the real estate fund. As a third step, we started re-negotiating different terms with the current hotel operator. At the same time, we reached out to other hotel operators to gauge their interest in the market for such a property. Ultimately we agreed on new lease terms with which the property owner and mechanisms on how the fund can participate when property revenues go over a certain threshold.

Results

The fund continually observes the situation and has the tools and the knowledge to adapt the contract when and where necessary.

More case studies

Re-positioning of city hotel

To attract a larger share of the leisure market during the pandemic, we supported the owners of this small city hotel to re-position it and to adapt selected marketing and distribution processes to cater better to that market

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Training and workshops for students & hoteliers

To equip (future) hoteliers with up to date tools and knowledge to operate their property efficiently in changing times, we developed training curriculums and gave trainings and workshops to a variety of audiences.