Morgans edges closer to Middle East hotel signings
Management agreements for two hotels expected in the "near-term"
Lifestyle boutique hotel operator Morgans Hotel Group has said it could confirm management agreements for two more hotels in the Middle East in the “near-term”, adding to its debut property in the GCC, which opens in Doha next year.
Announcing its results for the third quarter, the US-based company detailed its development pipeline around the world.
“The company… has two… LOIs [letters of intent] for hotels in the Middle East, which we believe could be converted into management agreements in the near-term,” it said in its Q3 results statement.
These letters of intent were originally announced in August, when Morgans pointed out that they required no investment from the operator itself.
"With regards to the pipeline we’re focused on major markets in North America, Europe and the Middle East where we can take advantage of markets where we have scale," explained Morgans Hotel Group interim CEO Jason Kalisman during an earnings call in August.
"We’re primarily focused on management agreements but we’d also consider license or franchise agreements depending on the brand, market and operator.
"Beyond that we would with the right partner look to expand into other areas, but I think as we’ve found in the past if you don’t have the right partner and you don’t have the right scale it’s not very profitable to do that."
Meanwhile, the opening of its 270-room Mondrian Doha, is expected in the second quarter of 2015.
In the third quarter, Morgans’ adjusted earnings before interest, tax, depreciation and amortisation were US $11 million, up 15.2% on the same period last year.
RevPAR for system-wide comparable hotels was up 3.7% to US $227.79, driven by a 1.5 percentage point increase in occupancy to 84.6% and A 1.9% increase in average daily rates to US $269.25.