Alias deal paves the way for timeshare room sales

Alias Hotels has been sold for £30.4m to a joint venture between the Alias management team and GuestInvest, the company behind the UK's first scheme to sell individual hotel bedrooms to investors.

Alias founder and director Nicholas Dickinson said the deal would kick-start the development of the brand, which he believes has the potential to grow from five to 80 properties in the UK before expanding to the Continent.

Alias has not opened a new hotel for two years, a fact Dickinson blamed on lack of funding rather than lack of opportunity. Small firms, he said, were barred from the sale-and-leaseback route of splitting property ownership from management because big investors were not interested in buying individual properties.

Alias will now generate cash from GuestInvest's model of selling individual hotel rooms to a variety of investors along time-share lines.

The deal will put 153 Alias bedrooms up for sale for an average cost of £200,000 apiece over 99 years. "This is a unique way of growing a hotel brand," Dickinson said.

The hotels included in the scheme are the Rossetti in Manchester, Kandinsky in Cheltenham and Barcelona in Exeter. The St Louis in Liverpool will join the GuestInvest scheme when it opens in spring 2006, but the Seattle hotel in Brighton, which is a leasehold, will be run along more traditional lines.

The plan is to open at least two hotels a year offering the room investment scheme but Dickinson stressed that openings would not be limited to the GuestInvest model.

The immediate goal is to grow to 15 properties within the next four years, with sites in Bristol and London already under consideration.

Money raised from the sale of Alias will go to shareholders of former owner Luxury Hotel Management, which will then be wound up. Its other brand, the four-strong Luxury Family Hotels chain, was spun off a couple of years ago as a precursor to the sale of Alias.

The Guestinvest proposition - GuestInvest allows small investors to buy individual hotel rooms for an average £200,000 over 99 years.

• Investors can stay in their rooms for as long as they want. They will receive 45% of the profits generated from the hotel letting the rooms for the rest of the time.
• Purchasers of rooms in GuestInvest's pilot scheme in London's Notting Hill, the Guesthouse West hotel, have enjoyed a 6.5% rate of return to date.
• GuestInvest received more than 10,000 enquiries for the 20 bedrooms available at Guesthouse West.
• The one Guesthouse West investor who has sold his room made a 10% gain on the original price.