THE INCREASING pace at which the leisure and hotel industry is consolidating is generating potential fees of more than u1m for top firms, says one lawyer in the City.
Eric Gummers, specialist partner for the leisure industry at City firm Amhurst Brown Colombotti, believes it is one of the fastest growing sectors worldwide.
"It may not be much longer before we see companies such as Seattle Coffee opening health clubs," he says.
"The leisure industry typically generates business for lawyers across the board, ranging from corporate, intellectual property and employment issues to joint venture and commercial law."
SJ Berwin property finance partner David Rylands comments: "From a property perspective, the leisure sector has developed significantly in the past five years." He says the hotel market is extremely active in the corporate sector.
Meanwhile, Linklaters corporate partner Patrick Plant says: "There is a huge branding exercise going on, particularly within the hotel industry.
"There are a number of large players that are expanding through mergers and takeovers - rather than organically. In any takeover or expansion programme, there is considerable scope for lawyers, particularly on the corporate side.
"You only have to look at the FTSE100 to see how much profit is generated in the leisure industry, and that it means good business for lawyers with a solid commercial practice."
There has been a flurry of activity over recent weeks. Whitbread is planning a u1.2bn bid for Greenalls in a move that would consolidate its standing as one of the UK's leading pub and hotel groups. It also wants to buy Brent House Hotel and build a 42-bedroom Travel Inn in Cheltenham.
Greenalls owns De Vere, which has 16 four- and five-star hotels, and a chain of high-quality managed pubs. The company also owns Village Leisure - an expanding health and fitness business that would complement Whitbread's David Lloyd Leisure.
Earlier this month, leisure group Ladbroke announced its terms of agreement to acquire the Glasgow-based hotel chain Stakis for u1.16bn. The 136-room Stakis hotel in Hanley is included in the deal.
The deal gives Ladbroke 93 hotels and makes the combined group the largest operator of four-star hotels in the country and the third largest hotels group in London - after Granada and Thistle.