Name: Viv Watts
Title: Co-founder, AGO Hotels
What I do: I set up AGO Hotels at the end of 2020 alongside Lionel Benjamin. We now have a portfolio of 15 hotels across the UK. Outside this, I am also managing partner at Oasis Holding – a diverse investment portfolio across the UK and Middle East that includes controlling interests in a range of companies spanning real estate investments, developments, industrials, FMCG and international trading.
Why I got into the property industry: I have always been a big fan of bricks and mortar – in an ever-changing world, one constant is the need for spaces; these may change in form but do not change in substance. Through my investments in property, I already owned a few small hotels. I chose to expand this further by teaming up with my now-business-partner Lionel Benjamin and hotel group Accor by launching a hybrid lease platform during the pandemic. It came as a result of obvious demand for an alternative to fixed and turnover leases fuelled by the use of contentious CVAs by well capitalised hotel groups. As a result, we formulated a hybrid profit lease platform delivering fixed index-linked rent plus an operational profit share, by focussing on effective and dynamic asset management.
How I did it: I have a professional background in trading, capital markets, private equity and investment, which I leveraged to build up a diverse portfolio of companies. From my experience, I’ve found that within real estate investments, hotels have a somewhat unique returns profile as their product is difficult to replace through alternative sales channels, ie retail has come under pressure from online retailers, services can be delivered through e-commerce or remotely, but the bricks-and-mortar offering of hotel rooms has proven to be highly resilient in the long-term. Compared to other property asset classes facing much broader challenges, hotels retain the pricing flexibility to combat inflation and an ever-changing cost base. I continue to believe that despite the world around us changing rapidly and going through the ups and downs, opportunity abounds, and I have always sought to adapt my investment objectives to suit prevailing market conditions. In summary, being adaptable and a lifelong student is paramount to growing a business over time, and I have avoided a “get-rich-quick” mentality, instead seeking to build value over the long term.
My first proper job: I began my career in debt capital markets (Merrill Lynch) before moving into private equity in Saudi Arabia, specialising in all aspects of direct investment and portfolio management. However, long before that, my first paid job was during my GCSEs, prepping vegetables for a local carvery at £3/hour (I won’t say which one). While I was in high school, and even working in banking, I always had one or two projects on the side, from becoming a Herbalife reseller (using my veg-prep money), chauffeur driving (pre-Uber), to manufacturing shoes in China. Lots of pain and little gain at times, but always valuable lessons.
My first big break: Unfortunately, I never won the lottery, or anything close. I even find it hard to believe that most people who find success in business haven’t done so without a journey of persistent hard work, building on every small victory and learning from every setback. From selling Herbalife to flipping old cars, I learned to continually re-invest whatever money I could make. To this day I still find myself buying generic alternatives to known brands just because it seems to make sense. My first ‘big break’ came when I left my job and was living off savings while trying to establish a trading business. Within six months I closed my first trade (exporting furniture) and in a single trade made more than a year’s income – and I was in banking before! This taste of ‘what could be’ if I could succeed in business fuelled me and within six months, I established Oasis which has now grown to own a diverse range of properties and companies.
My inspiration(s): I grew up in a very humble, conservative, Christian home and have always believed in every person having a purpose. I can’t say I have mine all figured out yet, but have had instilled in me from an early age the design in humanity to be significant and make an impact on the world around us, whatever form or scale that might be. Of course, individuals along the way in my journey have had a big impact on me and I am grateful to be able to surround myself with people who motivate and encourage higher thinking, both personally and professionally.
What’s the biggest challenges you have faced: In the context of hotel investment, I would say that being completely aware of CAPEX requirements at individual hotels is vital and challenging. It may sound crazy, but many investors “buy the lease” without even looking at the asset (guilty). Having an acute awareness of the asset’s condition is paramount to understanding the longevity of your investment, and the underlying ability to generate long term returns. You make the ‘easiest’ money when you buy, and understanding capex and buying right underpins a successful investment.
My greatest achievement/proudest moment to date: I’m not really one to look in the mirror and pat myself on the back, probably because I hang out with much more successful people and feel I always have a lot to learn and a long way to go. Looking at some of the businesses I have started, forming AGO Hotels succeeded against all the odds, being birthed from an entirely unpredictable set of circumstances that arose from the unprecedented Covid-19 pandemic. While some of the biggest hotel operators in the UK were failing to pay rent to their landlords, Lionel Benjamin and I forged a partnership with Accor Hotels which incentivised hotel owners to join our platform and participate in a transformational hybrid lease which offers far more secured rental income plus a share of their hotel’s profits. Since launching in January 2021 (hello five-month-lockdown, nice to meet you!) we have grown the portfolio to 15 hotels across England, Scotland and Wales. I have very high expectations and hopes for AGO so watch this space.
The biggest misconception people have about the property industry: Probably the assumption that developers always make all the money and get the blame for how developments are shaped, when in reality they have the greatest exposure and least control. A lot of hard work goes into building a property portfolio that many will not see or be able to appreciate unless they walk that road. My view is that money gained quickly can be lost quickly, but a stable and strong investment portfolio built over time on solid foundations will stand the test of time.
My biggest bugbear about the industry/the one thing I would change about the industry: Planning laws ….
Why I’m so passionate about DE&I: I support diversity, equity, and inclusion within our industry and beyond. By creating opportunities for everyone we’re not only ensuring equal access but also empowering our industry to bring bigger and better results. Embracing DE&I is vital to long-term success and prosperity.
Where I’d like to be in five years’ time career-wise: The last three years has taught us that it’s hard to look too far into the future given the uncertainty the industry and the global economy have faced. However, in the immediate future, we hope to increase the size of our portfolio by adding more quality hotels in the right locations, as well as continue to provide a favourable hybrid lease to the landlords in our portfolio. We’re also keen to explore our options overseas. Furthermore, outside of just operating budget hotels, AGO is considering moves into other forms of serviced accommodation…
Who I’d invite, living or dead, to a dinner party: Bear Grylls.
What I do in my downtime: What is that? Growing up in South Africa, I love being outdoors, whether it’s enduro riding, shooting, swimming, bonfires, I make the most of family time and getting my hands dirty in the fresh air!
The job I’d be doing if I was not doing this: When you’ve worked for yourself for long enough, it’s hard to imagine going back to a 9-5. I loved working in banking and imagine I’d have been very happy continuing in the sector, but would have always had that entrepreneurial itch to scratch.
My advice for someone just starting out: Good question. Firstly, buy aggressively and don’t overpay! Secondly, the location of where you’re buying needs to be considered carefully as even if it is a leased property, you need to be comfortable with the underlying trading potential. Finally, I would say focus your spending (CAPEX) on things that will drive customer satisfaction and room rate. Avoid focusing on arbitrary brand satisfaction.
My motto/mantra: Everyone has their own unique race to run in life. Run to win your race.
