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| Hospitality Magazine column Rethink for landlords For some time hospitality operators have been concerned at the rapid escalation of both rents and leases being charged. The property boom has seen landlords’ expectations for rent continue to escalate. If hospitality operators were concerned about the level of these rentals prior to the economic crunch then they are much more concerned now. The level of rents and the intransientness of many landlords is forcing some operators to consider their business viability at that location. It’s now time for landlords to rethink their investment strategies and take a longer term view of their expected return on investments. Surely landlords are better to be getting some rental income, albeit less than they are currently receiving, and see a viable business continue to operate and continue to be able to pay the rent. Rental income every week is surely better than hospitality fitted-out premises sitting idle. It does not take many weeks of no rent to reduce the real rental return to which a hospitality operator could have afforded. The Hospitality Association’s data would suggest that the number of hospitality properties turning over is slowing as new buyers are struggling to get credit and at the same time the number of operators simply walking away from their business is growing. Enlightened landlords need to and should take a more flexible and reasonable approach to their rental demands, which will not only secure their long term investment, but assist hospitality operators surviving in what is an increasingly challenging environment. This is a time for compromise and practicality – not greed. Bruce H Robertson |
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