Posted on Thursday 1st March 2018
Plans for Bournemouth Council to invest in a prestigious dual branded hotel with one of the world’s leading hotel operators is a step closer following yesterday’s Cabinet decision to support the scheme.
The proposals due to go before Full Council next month (6 March) for final approval will see investment in a brand new hotel on the site adjacent to the Bournemouth International Centre (BIC), in a partnership between Bournemouth Council and some of the biggest names in the hotel sector, positioning the town as a lead player in the conferencing and events market, and stimulating future economic growth.
Under the plans, the Council will utilise its favourable borrowing position to invest in the construction of the new hotel on the former Winterborne Hotel site adjacent to the BIC. The hotel would be entirely run by an experienced operator, with numerous, industry-backed projections forecasting the Council would receive net income which would more than cover the estimated cost per year required to pay back the borrowing over the loan period.
Councillor Philip Broadhead, Cabinet Member responsible for Economic Growth, said; “This proposal is founded on a solid business case that has been subject to due diligence and validated by leading experts in the commercial property and hotel market. Furthermore, we have carefully considered the points raised through the Council’s Corporate Services Overview & Scrutiny Panel, and welcome their support. Their recommendations, specifically in relation to the rental insurance policy and to carry out a further review of the hotel operating model by another independent financial consultant, whilst already part of the due diligence process, have been incorporated into the formal Cabinet recommendations to assure Members. I’m confident that this will strengthen the existing financial projections already in place.”
Kevin Marsh, Director at Savills, said; “This would be one of the largest hotel developments on the south coast in recent years, and play an important role in supporting the local authority’s ambitions to build on the success of the Bournemouth International Centre. A hotel of the quality proposed would certainly help to boost corporate trade and attract high spending guests to the town.”
Councillor Broadhead, added; “Like many local authorities across the country, Bournemouth is using its advantageous funding opportunities to create a portfolio of income generating assets. It is more important than ever that we target capital investment on projects that provide facilities and opportunities for future generations, and one of the benefits of the hotel development proposal is that the return on investment can make a significant contribution to the protection of frontline services. It really does tick a lot of boxes – adding to the growth of ‘Boomtown Bournemouth’ whilst generating income to make sure we protect services for council tax payers.”
Peter Gunn, Chief Executive of BH Live, the company who operate the BIC, said; “The BIC is one of the largest venues for conferences, exhibitions, entertainment and events in southern England but the lack of an integral or extremely close hotel to the Centre is preventing the town from attracting some of the national and international organisations.
“Competition across the conferencing sector is intense and over the years we have seen new locations emerging which means more established destinations like Bournemouth have to invest and reinvent themselves to ensure that they retain their share of this highly competitive market.
“A great deal has already been achieved in Bournemouth and the development of a new quality hotel adjacent to the BIC will be a valuable addition, and make a significant advantage to the town.”
The name of the preferred bidder, including the hotel operator and financial business case, is expected to go before Full Council on 6 March 2018. Due to the procurement requirements governing this process the details and information around the proposals are commercially sensitive.