Subsequent events

12 Months Ended

Dec. 31, 2017

Subsequent Events [Abstract]

Subsequent events

Subsequent events

On February 8, 2018, Belmond Ltd. announced that through indirect subsidiaries it had acquired the Castello di Casole resort and estate in Tuscany, Italy, for approximately €39,000,000 ($48,000,000). The acquisition was financed using cash on hand. The resort and estate will be rebranded upon the Company assuming management of the property.

The resort and estate comprise the 39-key Castello di Casole hotel, together with 48 residential plots, of which 16 remain for sale, with three subject to non-binding reservation letters of intent to purchase and two expected to be converted into new villas as part of the hotel inventory. Starting in 2018, the Company expects to invest €7,300,000 ($9,000,000) in a phased refurbishment of the hotel over four years, including the addition of two new villas on two residential plots that will be retained, bringing the resort’s total key count to 41. In addition, the Company expects to sell the remaining 14 land plots, including the three that are subject to reservation letters, over the coming years, effectively reducing the Company's net investment in the estate.

The '21' Club sustained water damage in early January 2018, which has resulted in the restaurant's closure until spring 2018. The Company expects that its insurance policy will provide property damage and business interruption loss.

The Company intends to reinvest the insurance proceeds at Belmond La Samanna alongside additional capital to restore and improve the asset, but we have concluded that such an investment cannot be justified without a material change in the cost structure of the operation. Consequently, the Company has entered into a formal administrative process with the local labor authorities in order to achieve a material restructuring of the property's workforce. While we cannot give any assurances that this restructuring will be approved by the French authorities, we believe that it is a necessary condition to re-opening Belmond La Samanna.