Acquisition of leading international chain of luxury hotels
Le Meridien consisted of the The Meridien Hotel Group, the Principal Hotel Group and the Cumberland Hotel, comprising 134 mostly four- and five-star hotels in prime locations around the world, including 76 management contracts. Terra Firma acquired the business in 2000.
Le Meridien offered the opportunity to achieve a step change in performance through room modernisation and space optimisation. Hotel-by-hotel business plans were developed, identifying alternative use for substantial quantities of under-utilised and unused space. A new modern bedroom format was designed to be rolled out across the portfolio, to achieve increased room rates.
The conversion of unused and underused space to alternative use and the upgrading of bedroom facilities was slowed down or postponed in the aftermath of the 9/11 attacks and their devastation of the hotel industry.
The Le Meridien investment has been fully realised. The Meridien Group got into financial difficulty in the first quarter of 2003, mainly due to the downturn in the hotel industry in the aftermath of the September 11th attacks in 2001. At the end of 2003, the Meridien Group was restructured and recapitalised.