A Hospitality Management Company With A Difference
Location: Based in Birmingham, but will cover the UK
Name: Switch Hospitality Management
Guide Price: TBA
No. of Keys: From 100 rooms plus
The Opportunity:
Traditional hotel management companies start with a premise that the owner pays them the initial fee, before any profit is declared, with an additional incentive fee based on profit-share. Switch Hospitality claim to be different “A fresh approach to management, where we partner with owners and businesses and crucially, we see each business that we operate as our own” says MD John Angus. John starfted Switch in 2020 after a career in management at GM and MD level for MacDonald Hotels, Q Hotels and at unit level, an IHG Crowne Plaza and others dating back to 1999.
Hotels under management at this time include the four-star Park Regis Birmingham (253 hotel rooms), Lyndon House (serviced offices), St Martin’s Place Birmingham (228 serviced apartments) and Holiday Inn Express Birmingham South (83 rooms), with several more projects in the pipeline.
They achieved some inpressive results both pre, during and post Covid.
They claim that the traditional model for management companies is “broken” as below:
·Charge a management fee based on revenue: Owners can only bank profit, meaning the management company do not have the same incentive as the owner.
·Have an incentive on GOP production: Owners bank EBITDA which means the management company are paid before the owner!
·Management companies do not have centralised functions that benefit the owner, they always benefit the management company.
Whereas their approach is:
·We believe that every business is our business and on that basis ALL OF OUR FEES ARE INCENTIVE BASED and they are 100% linked to profit generation.
·Switch makes money when the business owner makes money.
·Switch are incentivised to drive the EBITDA or end target, that benefits their partners.
·Switch will assist the owner in driving and preparing their business for sale, at the top of their business’s value, not the bottom!
·Switch creates a partnership with clients, where we understand the goal and drive past that goal.
We have also considered capital investment and development in our partnership agreements.
Park Regis Birmingham is perhaps their proudest achievement:
- The Switch Hospitality Management proposal understood the banking covenants and expectations of the owners and committed to exceed those targets.
- In 2018/19 Switch exceeded all covenant targets and achieved an EBITDA figure 30% higher than the best comparison from the other two management companies.
- Park Regis EBITDA will increase to 100% from the 2018/19 financial year to the 2021/22 financial year.
- Park Regis is the No1 hotel in the UK & in Birmingham and has been shortlisted again in 2022.
- Park Regis has been chosen as an athletes’ village by the commonwealth games in 2022 (The only Birmingham hotel).
Flag & Management: Will manage under any reputable brands and help the owner approve the franchise numbers
Owner: John Angus, MD
Main Photo: Park Regis Birmingham, their flagship hotel
Financials: Financial performance with EOI
Agent: THPT retained by Switch Hospitality
Date Posted: July 2022
THPT Comment: Certainly THPT have been impressed with their performance and business model…they will take on risk! John Angus is a real professional and operates as if he is the owner.
Hotel & Serviced Apartment owners can be naturally reticent in publicising their property is for sale…for confidentiality reasons, for staff and current client reasons, so the properties featured in this section will either be “generic” or “name specific”
Each week we mail the opportunities posted in that period, but check-out the tab “Hotels Available” and call us for details of “Under the Table” – deals not posted on the site at all.
The Hotel Property Team (THPT) is a small group of highly experienced business professionals. Between us, we provide a range of skills and experience which is directly relevant to those involved in the hotel property market. For more information – Visit www.thpt.co.uk or email [email protected]
MISREPRESENTATION ACT 1967. This information is provided as a general guide and is not intended to be constructed as a statement of fact upon which interested parties can rely. All interested parties should make their enquiries by inspection or otherwise. Neither The Hotel Property Team (trading name of Impetus Marketing 2006 Ltd) nor any person in our employment has the authority to make, give or imply any representation or warranty whatsoever relating to the premises referred to in these particulars. These details do not constitute any offer, contract or any part thereof and all negotiations relating to the premises should be conducted through THPT.
