Hotels tycoon: Stop crazy plan for quarantine
BILLIONAIRE hotelier Surinder Arora has always seen himself as a ‘ Mr Optimistic’, but the Government’ s plan to introduce 14-day quarantine rules tomorrow is casting a cloud over his business.
‘We are going to be hit, big time,’ says Arora, whose string of airport hotels such as the Renaissance at Heathrow and the Sofitel at Gatwick rely on a steady stream of business travellers and holidaymakers jetting in to Britain. ‘The Government needs to show we are open for business, not closed for business.’
Arora’s office overlooks the runway at Heathrow and last week he watched planes land from all over the world with no health checks in place. ‘While I was sitting there, I saw two aircraft land and take off from China; I saw an Egyptair plane; I saw four different planes from Emirates; I saw a couple of planes from Qatar; and a Kenya Airways plane from Nairobi,’ he says.
‘Yet if you were landing at the airport, or going through the airport, there were no checks. It seems strange that during the worst possible time – in February, March and
‘We now need to move the economy forward’
April – that was the time when we should have had quarantine.
‘To introduce it now, when the other nations around the world are opening up their borders, is crazy – what are we trying to achieve?’
Arora, 61, is one of Britain’s richest men, amassing a £1.26 billion fortune from his Arora Group spanning hotels, construction and property after starting out as a junior clerk at British Airways with a second evening job as a wine waiter.
He came to Britain from Punjab, India, in the 1970s aged 13 and lived in Southall, an area of West London dubbed ‘Little India’.
He recalls that when he wanted to go back to India to visit relatives, he had to pass health checks. ‘I had to show my certificate that I had had my jabs and malaria tablets,’ he says. ‘That kind of thing is more sensible than quarantine. Now we need to all work together safely to move the economy forward.’
Arora owns the properties for his 15 hotels – and often builds them too – and the hotels are run through partnerships with major chains such as Marriott, Hilton and Accor, who receive royalties for the right to use their ‘flag’ and booking systems.
Before t he pandemic, Arora Group was on track to make profits of around £25 million to £30 million for the year to March 31, on turnover of around £ 200 million. He says his assets, which include valuable swathes of land at Heathrow, Gatwick and Stansted, are worth ‘around £2 billion-plus’.
But the coronavirus crisis has brought his business to its knees. His four and five-star hotels cost between £4.5 million and £5 million to run each month during lockdown, and with no revenues coming in since March, he is looking for up to £50 million financing to tide him over. Half will come from a state-backed business interruption loan and the rest from his lenders, RBS and Santander. His hotels will be used as collateral.
When asked to put a number on the hit to the business he has built from scratch, Arora says he feels like crying.
‘Harriet, I’m going to have tears in my eyes; it’s going to be huge,’ he says. ‘This year we have written off our business altogether.
From April until the end of the year, I don’t expect to make a penny profit.’
The pandemic also means his grand plans to lead Heathrow’s expansion projects have been ‘kicked into the long grass’.
Over the past few years, he has spent ‘tens and tens of millions’ drawing up £14.4 billion plans to build a third runway and a sixth terminal. But the coronavirus travel ban, which is expected to dent passenger demand until 2023, now means the third runway ‘no longer makes economic sense’.
The case for a sixth terminal remains ‘strong’, Arora says – but he doesn’t expect to file a planning application until at least next year. Due to the slump in passenger numbers, he will scale back his proposals for the West Terminal to a £2 billion to £3 billion project that will accommodate half the number of passengers, down from 40 million to between 15 and 20 million.
In the meantime, Arora is refurbishing two hotels at Gatwick, at a combined cost of £45 million, and opening a £ 150 million five- star hotel near Windsor Great Park in Berkshire. The Fairmont will have a 600-seater ballroom, an 18-room spa and offer guests horse and carriage rides in Windsor Great Park.
Last week, he reopened the 460room Arora hotel in Crawley near Gatwick to key workers, in line with the Renaissance Hotel at Heathrow, which has remained open to offer discounted rooms to NHS staff and cabin crew.
The rest will open from July 4 with safety measures such as Perspex screens at check- in, floor markings at the bar, and providing extra room service while the restaurants run at reduced capacity.
Despite his vast wealth, Arora says he still leads a ‘normal’ life, shopping at Sainsbury’s on Saturdays and eating at Nando’s. He is certain that applying ‘ common sense’ is the way for Britain to fight back from the economic crisis. ‘This horrible disease isn’t going away – it could be 18, 24 months before we get a vaccine. So we need to start living some kind of new normality.’
He c a l l s t he Government’s response to the crisis ‘incredible’ but has one gripe – the furlough payments have been ‘too generous’. Arora used the job retention scheme to furlough 2,000 of his 3,000 staff but says payments should have been capped at 50 per cent.
‘Why the hell are we giving 80 per cent furlough?’ he says. ‘So many people are reluctant to go back to work. If we had done 50 per cent, it would have been painful, don’t get me wrong – but we would have saved at least £3 billion to £4 billion every month.’
Recalling his early career, when he worked 18-hour days to hold down two jobs at once, he adds: ‘I’ve always said in life, there is never a free lunch. Our future generations will end up paying for it [furlough] for generations to come.’
‘So many are reluctant to go back to work’