JULIUS BAUMANN

Aviation and Tourism Editor

Queensgate Hotels & Leisure yesterday signed a partnership agreement with hotel group Three Cities that will see the latter take over the management of all Queensgate’s hotels with immediate affect.

Queensgate has long searched for the ideal partner to run its hotels while allowing it to focus on its core strength of developing new properties through its subsidiary, Queensgate Business Development.

The news is especially welcome in light of Queensgate’s trading update published last month in which it warned that its headline earnings a share for the year to end August was likely to fall short of its forecast published in July, largely due to a softer performance from the group’s hospitality division.

The long-awaited deal will no doubt see an improved performance from the hotels, driving Queensgate’s hospitality revenue through its share of the management fees. The groups also hope to take their partnership a step forward in future to develop new hotels.

“It has been a long wait but it was well worth finding the right partner,” Queensgate CEO Andrew Hubbard said yesterday.

“We are excited about this agreement, which will not only see our hotels managed by the exceptional Three Cities but also transfer reservations for our hotels to Three Cities’ sophisticated online reservation service, which will enhance our customers’ experience. In addition, the link with Three Cities will strengthen the position of the Queensgate hotels in the corporate, government and domestic sector, an area in which Three Cities has traditionally been very strong.”

Mike Lambert, chief operating officer of Three Cities, said the group was likely to achieve a 10% increase in average room rate across the Queensgate hotels while driving occupancies through its international and domestic sales channels. The deal will give Three Cities access to about 3000 rooms, an increase of 50% in room stock.

Hubbard said that the two groups were developing a new four-star brand that would be rolled out at several new developments. “The two hotels that we have under construction in Cape Town will fall under the brand and we hope to have seven or eight properties operating under the new name in the next three years.”

This email address is being protected from spambots. You need JavaScript enabled to view it.

Source: Business Day