The Hoxton Hotel was founded and created by entrepreneur Kurt Bredenbeck through his corporate vehicle Quest Hotels Limited. The Hoxton is based upon the ‘luxury-budget’ concept devised by Bredenbeck specifically for this project. This innovative idea has now become the basis for an entirely new market segment within the international hotel industry.
The Hoxton opened to create acclaim in September 2006 after several years of planning and development. During the process, Kurt reviewed over 100 sites across London and put together offers on several before agreeing to acquire the Great Eastern Street site in October 2001, just one month after the 9/11 attacks, a time when most hotel companies were pulling out of their project commitments.
Working with his team and advisors, Kurt developed a detailed series of business plans with long-term financial projections for the hotel, put together the development and funding budgets, wrote the design and development specifications, and identified and hired the team of professionals both in-house and external which designed, developed and opened the hotel on time and budget.
Lead finance for the project was provided by Bridges Ventures, a relatively new regeneration-oriented fund set up by Sir Ronald Cohen to invest in new businesses which aimed to deliver social and regeneration benefits along with positive financial returns. The investment fulfilled one of Bridges key impact themes – investing in underserved areas. The creation of The Hoxton played a critical part in the regeneration of Hackney in the early 2000’s which was in the bottom 3% of deprived wards in England, and, as a result sparked a creative and entrepreneurial regeneration of an entire Borough.
“The foundation of The Hoxton played a critical part in the regeneration of Shoreditch and Hackney. The example of The Hoxton Hotel demonstrates how visionary concepts and decisive financing can transform industries and areas alike. We have played a clear role in promoting the regeneration of Hoxton and Shoreditch”.
Bridges Sustainable Growth Fund
Upon opening, The Hoxton became an instant success and future classic. The hotel was immediately named by GQ magazine as one of the “100 Best Things in the World”, and won the accolade of a top place in Conde Nast Traveller’s Hot List of the best and coolest new hotels on the planet. The hotel operated at near 100% consistently and is generally considered to be the most successful and profitable hotel of its type in the United Kingdom. The Hoxton has won numerous awards of the years including notable being named ‘Best UK Hotel’ three years in a row at the Guardian and Observer Travel Awards.
With the founding of The Hoxton, Quest was named by online magazine Real Business (www.realbusiness.co.uk) one of ’50 to Watch’: ‘Targeted at the mid-market, Quest Hotels cream business away from Holiday Inns and Travelodges by providing a superior service, at a tiny premium. Kurt Bredenbeck helped to make boutique hotel One Aldwych a success. Quest’s hotels are “individually branded intelligently upholstered, and doubtless hugely profitable”’.
One of the most successful new hotel ventures to debut in the UK in the past decade, the industry’s first ‘luxury-budget’ hotel achieved record-breaking levels of sales and profitably. In doing so it not only created a whole new market place now filled with copy-cat ‘luxury-budget’ hotels, but also originated a new international hotel destination in Shoreditch and Hoxton, East London
After 12 years of ownership, Quest Hotels and Bridges Ventures announced the sale of the hotel to the Mittel family of India and their London-based investment vehicle Ennismore Capital. Until its sale, Bredenbeck remained the largest non-investor individual shareholder along with a syndicate of professional investors including Bridges Ventures. The purchase price is undisclosed, although Quest and its advisors believe it to be the highest transaction price achieved in the UK on a per room basis for an independent budget hotel.
The sale crystallised a landmark return to the hotel’s investors, achieving nearly 50% IRR over the eight-year period from the initial investment. On completion, after repayment of the company’s remaining debt facility, the net sale proceeds realised more than 10x cash return on the initial equity investment for its shareholder group – a record-breaking result.
On completion of the sale, The Hoxton founder Kurt Bredenbeck commented:
“I would like to thank our extremely dedicated and hard-working team at The Hoxton. As the founder of the hotel, I could not be more proud of their tremendous achievements over the past five and half years since opening, including, amongst many other accolades and awards, the Guardian and Observer Travel Award for ‘Best UK Hotel’ for three consecutive years.
In addition, I’d like to extend my acknowledgement and appreciation to our investors over the past decade or more since I started the company, including specifically our lead financial investor, Bridges Venture Capital. Their enthusiastic support for my concept, vision and work – to create the hotel industry’s first ‘luxury-budget’ hotel – located in what at the time was my local neighbourhood parking lot – were key elements to achieving the dream I set out those many years ago to make the world’s best budget hotel”.