Luxury hotel group Rocco Forte readies for big expansion
British company’s founder wants 25-30 properties spread around Europe within 3-5 years
Luxury hotel group Rocco Forte, which owns Brown’s in London and the Hotel de Russie in Rome, is preparing its biggest expansion yet in a sign of the resilience of the luxury market against an economic slowdown.
Rocco Forte, who founded the hotel group in 1996, said he wanted 25 to 30 properties spread around major European cities within three to five years, compared with its current 14.
Most of the new properties will be in Italy, where supply is low due to the complexity of doing business.
Sir Rocco, the son of the Scottish-Italian businessman Charles Forte, whose company owned brands such as Little Chef and Travelodge, plans to open four hotels in Italy next year and one in China.
The company is also moving into long-term rental accommodation in an attempt to take advantage of a growing market for travellers looking for more independence than a traditional hotel allows.
It plans to open more apartments to add to the first “Rocco Forte House” in Rome, which opened this year.
“You can’t call it Airbnb as it’s a certain different level,” said Sir Rocco. “There is a bit of a trend in that direction and there’s no reason for us not to take advantage of it.”
The hotel market was hit hard by the 2008 financial crisis as both businesses and consumers reined in spending. But the luxury end of the market proved more buoyant, attracting attention from international hotel companies.
In 2015, Marriott bought the higher end chain Starwood resorts, while in February this year InterContinental Hotels Group bought the luxury resort spa company Six Senses
Sir Rocco said his customers wanted “a high level of travel and experience and they are not too bothered about how much they spend”.
Robin Rossmann, managing director of the industry research firm STR, said demand was “good and growing” in the luxury market but supply was not coming in fast enough to satisfy it. “These properties are one of a kind and you can’t just build another one,” said Mr Rossman.
Rocco Forte’s revenues for the year to April 30 were £219m, up 6 per cent on 2018. Earnings before interest, tax, depreciation and amortisation were £34.6m, only a 0.5 per cent increase on a year earlier, due to expansion costs.
Accounts released on Friday for rival group The Dorchester warned of a downturn in trading performance due to boycotts earlier in the year. The boycotts were part of a campaign against new laws by the Sultan of Brunei, who owns the hotels, that would have made gay and extramarital sex punishable by stoning to death.
Sir Rocco said the Hotel de Russie had “certainly” seen an increase in bookings as a result of the boycotts but that The Dorchester hotels “deserved some support”.