Administrators take over 42 Marriott hotels

15-Jun-2011 - Last updated on 26-Apr-2021 at 20:06 GMT

London Marriott Hotel County Hall is amongst 42 Marriott hotels in administration

Marriott Hotels around the country have been taken into administrative receivership after their owners failed to make loan repayments.

The Royal Bank of Scotland, which was the majority lender on the debt, took control of the £1bn property portfolio when debt-for-equity restructuring payments were not met.

RBS this week appointed Ernst & Young as administrative receivers to the 42 hotels. With around 8,000 rooms across the portfolio, this is thought to be one of RBS’ largest individual real estate receiverships.

Business as usual

All 42 properties will continue to be operated by Marriott during the administration process, and no change is expected in any level of the business of the hotels, said Ernst & Young.

“It is business as usual for the portfolio. Marriott will continue to operate the hotels and this decision will not affect customers, suppliers or employees of the hotels.”

Background

RBS bought the four- and five-star hotels in 2006 for £951m from a Whitbread/Marriott joint venture.

It then sold them off for £1.1bn in 2007 (retaining around £700m of the debt used to finance the acquisition) to Quinlan Private, Igal Ahouvi and Delek Real Estate, who own the British Virgin Islands-based Professional Ventures Corporation (PVC).

When PVC, the holding company for the portfolio of hotels, was unable to pay its loan interest, Ernst & Young was on Tuesday appointed administrative receiver.

Sale of Marriott hotels

Ernst & Young will now look to sell the portfolio of hotels, located in England, Scotland and Wales, with the aim of recovering as much of the debt as possible.

A new board has been appointed to run the property companies under PVC that own the individual hotels, and this board will be advised by Earnst & Young on the “potential sale”.

Marriott, which still has 25-years left on a 30-year management contract it had signed on the hotels in 2006, will in all likelihood continue to operate the hotels even after a potential sale, Ernst & Young told BigHospitality.

The hotels are: