Legacy CEO: defendable development decisions not necessarily best

by | 07 Oct 2022 | Events

Imagery courtesy of AHC. L-r: Stockton-on-Tees Borough Council’s Iain Robinson and Genr8 Developments’ Warwick Smither and Legacy Hotels & Resorts’ Andy Townsend.

Public sector cooperation on hotel projects can be fraught with difficulty, according to Andy Townsend, CEO of owner, operator and manager, Legacy Hotels & Resorts.

Speaking during a panel discussion on ‘How to fill the hotel development viability gap?’ at the AHC event in Manchester, UK this week, Townsend detailed a blame avoidance culture within some local authorities.

He said: “The biggest worry for me is when you sit in front of somebody, and they want to make the most defendable decision. At that point, we’re screwed. Because the most defendable decision isn’t always the right decision in the long term. Because they want to be able to say, if in the event this goes wrong, do I have a position I can take where I can protect my job?”

Brave decisions

However, he acknowledged: “Spending the public purse is hard, but you’ve got to make some brave decisions. A lot of the projects that are on our desk at this time have a significant funding gap. The reality is, all hotels have a fundamental problem in that they cost too much to build.”

Townsend feels there is a solution though, that emphasising focusing on cost per key, as well as the wider economic influence of the hotel, tend to get local authorities onboard with a hotel project. “When you’re putting the economic impact of it over a 25-35-year term, that makes the difference,” he underlined.

Wider understanding

The local authority representative on the panel, Iain Robinson, assistant director at Stockton-on-Tees Borough Council, recognised: “Not many local authorities are desperate to own hotels. Developers should approach projects location by location. Ultimately political organisations need to have an understanding of those wider benefits – it’s important for selling it.

“Perversely sharing advice on any upfront risk is really helpful to get the ball rolling.”

Townsend responded: “Rarely does a local authority come to us and say ‘this is what I want’. The person in the local authority that’s buying the project usually doesn’t really understand what they’re buying. There is a journey that you have to take to get to that stage.”

Related Articles

Hotel financing experts warn of acquisition debt shortage

Hotel financing experts warn of acquisition debt shortage

Imagery courtesy of AHC. L-r: Abrdn’s James Dunne, Schroders Capital’s James Macnamara and KSL Capital Partners’ Tina Yu. This week’s AHC event in Manchester, UK brought together a selection of hotel financing specialists to assess the state of investing while the...

Swiss Hospitality Investment Club: high-calibre networking

Swiss Hospitality Investment Club: high-calibre networking

On 15 and 16 September, high-calibre industry hub Swiss Hospitality Investment Club will be serving up exclusive insights into the latest developments on the hospitality sector and looking at the trends currently defining the investment market, while also providing an...

The AHC 2021: Key takeaways from The Annual Hotel Conference

The AHC 2021: Key takeaways from The Annual Hotel Conference

The Vision Stage at The AHC 2021 (imagery: © Richard Frost) In an exclusive report, we round up the key insights shared in Manchester, featuring contributions from Marriott International, Accor, IHG, Goddard Littlefair and Gary Neville. Leading lights from Europe’s...

Interihotel recovers its physical format in ‘the caring edition’

Interihotel recovers its physical format in ‘the caring edition’

Barcelona will host from 24-26 November 2021 the reference event for contract-hospitality professionals. After nine editions and thousands of visitors with a buyer and specifier profile per edition, the last few years consolidated Interihotel as an opportunity to...

Pin It on Pinterest