Asset-light strategy
Part of Gaymer-Jones’ strategy was to develop Sofitel into an asset-light business, focused on hotel management — which also freed up capital. This has involved selling off owned properties while maintaining the operating agreements.
“We own 21 hotels, by the end of the week this could be 20,” Gaymer-Jones says, speaking in March in reference to a Paris property the chain was on the verge of selling.
“We are very focused on being a manager, perhaps being an owner gives us an edge because we have an understanding of what the owners see as to how hotels should be managed, but Sofitel’s strategy is to reduce its asset ownership.
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“We put the money from these investments back into our hotels. It’s not like we don’t want to own any hotels, if we find hotels in certain locations around the world in high-value key markets we would put our own investment in again,” he says.
However, when asked how many properties the firm would ideally still own in five years time, Gaymer-Jones replies six or seven: “And the reason we keep six or seven is because some of the time they’re leases and it’s very difficult to get out of a lease”.
Regionally, Sofitel currently has significant share ownership in Morocco, as well as investments in Cairo and Mauritius.
Gaymer-Jones adds: “We will hold onto some hotels until we feel the time is right to sell —– obviously you sell when there’s huge demand.
“Also, we want to make sure we sell to owners who are really interested in being partners with Sofitel. For existing hotels the owner is bound to maintain the management agreement with us, so we sell on the basis we have the rights to develop the hotel and maintain the standards”.
Today, the group’s hotel count — including owned and operated, and operated-only properties — stands at 120 in 40 countries, including a handful of operating Legend and So branded properties.
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