Why is One Luxury Hotel Company considering putting itself up for sale?

by | Aug 21, 2018 | General News

Belmond leadership has said that the company will be conducting wide-spanning reviews of a range of strategic options

Belmond, which is maybe best known for once being associated with the Orient-Express banner, is the self-selling company in question

Belmond, the luxury hotel company that consists of 46 luxury properties and is possibly best known for once being associated with the Orient-Express banner, is exploring possibly putting itself up for sale.

The properties that make up Belmond include more than just hotels, extending as well to restaurant, train, and river cruise properties. The company has publicly announced that its board is exploring “strategic alternatives to enhance shareholder value,” and experts say that in all likelihood these alternatives are looking for essential buyers with an assist from powerful Wall Street mega firms like Goldman Sachs and JP Morgan.

More About Belmond

In the wake of this announcement, Belmond’s stock jumped 17 percent. This, of course, is great news for the shareholders that Belmond was looking to boost value for in the first place.

In media reports, Belmond leadership has said that the company will be conducting wide-spanning reviews of a range of strategic options that are available to them, and that they will include considering a possible sale. Company leadership has also said that they are looking into this because the company as of late has made progress toward long-term strategic goals such as growing earnings, increasing awareness for its brand, and expanding its overall global footprint.

Belmond, for those who are unfamiliar, has many assets, including iconic properties such as the Belmond Hotel Cipriani in Venice, the Belmond Copacabana Palace in Rio de Janerio, and the famous 21 Club restaurant in New York City.

Questions Remain

Questions, however, still remain, and the company has not yet revealed a timeline for the aforementioned review process.

The main reason why a sale may be in the interest of the company’s shareholders is that for the second quarter, Belmond reported a net loss of $1.5 million. This was lower than the net loss of $4.9 million that the company reported in the second quarter of 2017. Belmond’s business in Myanmar is also down after that country ended up suffering from reduced visitor arrivals.

Many experts say that Belmond has struggled to rebrand itself after moving away from the Orient-Express banner in 2014, and that that has not helped its standings. What has made this an even more complicated move for Belmond is that French hospitality giant AccorHotels has invested in the Orient-Express name, launching its own effort to reinvigorate that branding.

Traveler Concerns

While a potential sale of Belmond portends nothing but good things for the company’s shareholders, luxury travelers who frequently patronize the brand may be a bit more concerned.

The likely sentiment among this group is that it would be a bad thing if Belmond was to be folded into another mega hospitality industry giant. Some insiders are suggesting that AccorHotels, which is working to reinvigorate Orient-Express, might also be a likely buyer for AccorHotels. Hyatt Hotels Corporation has also been mentioned here.

Let’s take a look at a few projects currently underway by Belmond Hotels:

Belmond Castello di Casole

Belmond Cadogan Hotel

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