The Fattal hotel group and a group of investors said on Wednesday that it was buying QMH, which owns 20 hotels in Germany, from Goldman Sachs for around NIS 1.5 billion.
The closely-held Fattal chain said it intends to immediately place its Leonardo marquee on the five Best Western hotels it is acquiring as part of the package and eight of the 15 Holiday Inns. The remaining seven Holiday Inns will maintain their branding for now. Fattal will also allocate 25 million to 35 million euros for renovations.
Fattal owner and CEO David Fattal said he became interested in the hotels because of their synergy with the chain’s existing properties in Germany.
“Many of them are located in cities where we already operate, so we can project profitability and determine the buying price accordingly,” he said. “It fits like a glove, and that’s how the investors saw it too.”
The hotels included in the deal, all carrying at least four stars, took in 107 million euros in revenues in 2011, with an occupancy rate of 67%. Fattal said he expects revenue to climb by 12% to 120 million euros this year.
Fattal already owns 25 hotels in Germany with turnover of 120 million to 130 million euro and 68% occupancy rate. Along with 10 hotels elsewhere in Europe, Fattal’s operations on the continent will include 9,000 rooms and 3,000 in staff.
Despite Europe’s weak economy, overnight stays in hotels in Germany grew 3.6% last year, with stays by foreign tourists up 8.1% and those by Israelis by 19.2%. The pace of growth is expected to reach 5% annually through 2015.
Fattal doesn’t intend to confine the chain’s development to Germany, saying its operations in Switzerland are widening and that he’s casting his eye on Austria as well as acquisition opportunities in Spain and Italy.