Bits: LVMH (surprisingly) buys Belmond, Virgin Atlantic refreshes its Savings Account, Hilton launches Asia-Pacific sale

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News in brief:

Belmond hotel group in surprise sale to LVMH

LVMH, the luxury goods group behind Louis Vuitton and many other high-end brands, has emerged as the surprise winner in the race to acquire the Belmond hotel group.  It will pay $3.2bn including existing debt, which is loose change for a company with a market capitalisation of €130bn.

LVMH already has a small hotels presence with its Cheval Blanc brand.  These are genuine ‘uber luxe’ properties, however.  Belmond is generally made up of historic properties which are past their prime and in need of investment.  Other LVMH hotel interests include Fendi Private Suites in Rome and, via its Bulgari subsidiary, a 50% shareholding in Bulgari Hotels & Resorts.

It is possible – and this is just my guess – that LVMH will cherry-pick a few hotels, such as the Mount Nelson in Cape Town (below) and the Cipriani in Venice, and resell the rest.  I could be wrong though, as LVMH definitely has the money if it does decide to upgrade all 30+ Belmond properties.  I am pretty sure that the status quo won’t be maintained as LVMH is not interested in attaching its reputation to ‘past their prime’ hotels.

The reason that the sale price is so high is that Belmond owns the freehold or long leasehold to many of its properties.  This is probably why ‘asset-lite’ groups like IHG were pushed out, because they were less willing to dilute their return on equity by doing anything as radical as physically owning a hotel.

When IHG bought the UK’s Principal Hotels recently, for example, it teamed up with a property company so that it did not need to take on the assets.  That is fairly easy to do if you’re buying a group of UK city centre hotels but a lot trickier when the assets are spread across the globe as they are here, and also include rail and cruise operations.

Mount Nelson Cape Town

Virgin Money tweaks its miles-earning savings account

Virgin Money has launched a new version of the Virgin Atlantic 1-year Flying Club Savings Account.

This is an interesting product which no-one has tried before.  You make a one-off deposit of between £1 and £1 million into a one year bond.  No further deposits and no withdrawals are allowed over the one year period.  Instead of cash interest, after one year you will receive 1,600 Virgin Flying Club miles for every £1,000 you save.

Full details are on the Virgin Money website here.

In case you are wondering exactly how this works, and whether you can escape Income Tax if you pay it on your savings (you can’t), this is your answer:

Virgin Money pays you interest based on a rate of 1.36%

Your interest is immediately taken back and used to purchase Virgin Flying Club miles at – effectively – 0.85p per mile

In terms of the income tax position, the interest should be included on any tax return and will count towards your Personal Savings Allowance, like any other savings interest

In general, I would be a buyer of Virgin Flying Club miles at 0.85p – except for the fact that I am sitting on over 1.5m of them between my wife and myself and that’s probably enough for now!  You need to compare the notional 1.36% interest rate with comparable accounts from other institutions with a similar risk profile.

A new version of this account was launched this week.  The interest rate is unchanged, but the savings term if you apply today runs to 20th January 2020.  This means that you are actually putting your money away for 13 months.

You can find out more on the Virgin Money website here.

HIlton Asia Sale

Hilton launches a new Asia-Pacific sale

Hilton has launched a new sale covering its properties in Asia and Australasia.  See here for details.

It includes hotels such as the Millennium Hilton Bangkok pictured above.  You might also want to take a look at the brand new Waldorf Astoria Bangkok which looks very impressive.

The deals are valid for stays up to 30th September 2019 which is surprisingly long.  There is also no rush to book unless you are travelling immediately, as these deals are available until 2nd February.

The headline saving is ‘up to 35% off’ the standard flexible rate – albeit these bookings are non-refundable, and not all hotels offer 35% – so it is worth looking to see if any existing Hilton bookings you have should be rebooked. It may also be worth cancelling redemptions and rebooking for cash if the rate is low enough.

(The discount is smaller in Mainland China, Hong Kong, Macau and Taiwan, at up to 25%.)

If you are tempted by this offer, please also remember:

to register here for the ‘double and triple points’ promotion which runs until 3rd January

to claim your Hilton Honors status match here from any other hotel status you may have

Full details of the APAC sale can be found on this special page of hilton.com.

(Want to earn more hotel points?  Click here to see our complete list of promotions from the major hotel chains or use the ‘Hotel Promos’ link in the menu bar at the top of the page.)

Bits: Head into space with your Virgin miles, last call for Hilton 80%-100% buy points bonus, IHG 80% buy points bonus
Bits: €1250 British Airways Cape Town deal in Club World, 50% 'buy Avios' bonus, Cathay Pacific launches with AirPortr
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Comments

  1. @Rob – Off topic I know, but are you aware of Norwegian’s 737 Max that had to do an emergency landing in Isfahan, Iran? Flight was enroute from Dubai to Oslo. Story is interesting for two reasons – the 737 Max is now firmly in the spotlight after the Lion Air incident, and Iran is not going to be the easiest place to ship spares to, given the trade embargo.

    • Plus, if you were on that plane, would you now be banned from going to the US though your transit there was not your fault?

      • The women apparently weren’t allowed in because they didn’t have headscarves (bizarrely, surely they had something they could cover their hair with!) – would that mean they wouldn’t have an Iranian entry? I wonder if the men were able to opt to stay airside too.

      • Not really, as they never technically entered Iran. They’re all airside, probably similar to transiting via a major airport in Europe.

      • Lady London says:

        Yes. I think you would. It would be “computer says no”.

        Same as if your plane to the US gets diverted to Canada, you are in trouble if you do not have the new visa waiver (at least) for Canada (they have one now that is similar to the US one).

  2. ScienceTeacher says:

    The Shop Small offer has gone from my Amex cards. Anybody recall the end date? I thought it was tomorrow (Sunday 16th)!

    Cheers!

    • Shoestring says:

      Don’t worry, it’ll still work (common problem that it seems to disappear from saved offers, won’t be an issue)

  3. OT Amex lounge popup

    Was pretty busy today – arrived at 1530 to be told that it was at capacity and there was a waitlist. Headed over to Maison Bab round the corner which does good food and drinks and is a participating shop small venue.

    Approx 1 hour later I got a text saying it was my turn and I had to text YES within 10 mins if I still wanted my spot. On arrival, drinks service at the bar was fast and good, but canapés seemed sparse, there was nowhere left to sit, and the gift wrapping service had stopped accepting further gifts.

    Not quite as positive an experience as Rob et al reported yesterday but still worth a visit.

    • Shoestring says:

      So you got there late about 5pm (when the venue closes at 6pm), you got as many great free cocktails or other drinks as you wanted, but you’re complaining that food was low, place was popular & they stopped wrapping presents?

      Get real.

      • While many people here are obsessed with downing as much free alcohol as possible, not everyone is…

        If I turned up at 3.30PM (not 5PM…), had to wait an hour and then there was no food or gift wrapping service which I was expecting to be there, I’d also be slightly disappointed (though I’m not sure saying “not as good as the previously described visit but still worth going” really counts as complaining).

        Why this seems to personally offend you I have no idea!

    • apologies if my post which aimed to give a fair account of my visit today came across as complaining. I was trying to report my experience in the hope that it might be of some use for those planning to attend tomorrow and expect to be allowed straight in

  4. Actually, two of the stalls on the market used those iZettles. Didn’t know they would be off limits. You’d think that the people using them would be “small” by definition!

    Given that the market is there only one month a year, I’m not sure how the map could have helped so I just gave it a try. Might try and complain to Amex though only complained about another offer not tracking two weeks ago…

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