Saudi Arabia’s Public Investment Fund (PIF) has purchased a 49% stake in Rocco Forte Hotels, a luxury hotel group owned by Sir Rocco Forte. The deal, valued at £1.2bn ($1.6bn), includes plans to double the chain’s size over the next five years with new hotels in the Middle East, Italy, and the US.
As part of the agreement, Italian sovereign wealth fund CDP Equity will exit the business, along with four of Forte’s sisters. However, Forte and his sister Olga Polizzi will retain a controlling 51% stake. The PIF will also invest tens of millions of pounds to support the expansion of the hotel portfolio.
Rocco Forte Hotels, which currently operates 14 hotels across Europe, aims to open three new hotels by 2025, including one in Dubai, marking its return to the Middle East. The PIF’s investment in Rocco Forte Hotels is part of its strategy to diversify Saudi Arabia’s economy and reduce its reliance on fossil fuels.
Turqi Alnowaiser, deputy governor at PIF, stated that the investment reflects the fund’s belief in the potential of the hospitality and tourism industry. The PIF will have two board seats, while the Forte family will have three.
The luxury hotel sector has performed well despite the pandemic, with Rocco Forte Hotels recording group revenues of £293.5mn ($402mn) in the year ending April 2021, up from £166.5mn ($228mn) the previous year. The investment from PIF is expected to provide financial stability and enhance the company’s reputation in the industry.