Dear BIL, No Deal: Thistle - Thistle Hotels' Chairman David Newbigging has dismissed as opportunistic an unsolicited takeover offer from BIL International. The Singaporean investment firm, which already holds a 45.8% stake, pitched its offer at 115p a share in cash, representing a 15% premium on Thistle's share price at the close of trade on 20 February 2003. The hotelier, however, preferred to see the offer as representing a premium of 4% on the average share price over the three months to 20 February, a premium which Mr Newbigging regarded as wholly inadequate, valuing Thistle Hotels as it did at some £554.7 million. BIL remains unshakeable in its belief that the company can flourish only if it is wholly privatised, even though certain analysts were inclined to concur with Thistle that the offer does not reflect the company's underlying value.

Accor The Profit Prophet - Accor had been saying since at least last November that its pre-tax profit for the full year 2002 would be very close to €700 million. And, happily, the company's forecast proved right, as Accor complemented last month's unveiling of full year sales by announcing a pre-tax profit of €703 million, down 7.3% on the figure for 2001. Total group sales were down 2.1%, at €7.1 billion. Despite the current economic conditions, the company said it would be looking at increasing its market share and continuing to expand. Although this expansion might not necessarily come by way of a large acquisition, according to CEO Jean-Marc Espalioux, it could come, he noted, by the company's striking an association with a regional or national chain similar to the one made with Dorint Hotels & Resorts; Accor took a 30% stake in Germany's biggest hotel operator in October last year.

Thistle Make Grim Reading - The slowdown in the global economy, coupled with the loss of income from the 37 hotels Thistle Hotels sold to Orb Estates in April 2002, was responsible for a 43.2% slump, to £27.9 million, in Thistle's pre-tax profit for the year ending 29 December 2002. Turnover dropped 37.8% to £190.0 million. RevPAR across the company's portfolio of 56 hotels fell 5.6% to £47.73, with the 18 owned or leased hotels, from which Thistle expects to derive much of its future revenue, recording a 6.8% fall, to £56.81. However, Chief Executive Officer Ian Burke noted that revenue from these 18 hotels, 16 of which are in London, in the first eight weeks of Thistle's new financial year was 1% ahead on the previous year's comparable period, a beacon of hope in what Mr Burke called the uncertain economic climate of the months ahead.

M&C Are OK - Millennium & Copthorne could not bring itself to look on the bright side, even though it posted an 11.1% increase in pre-tax profit, to £60.2 million, for the year ending 31 December 2002. The company, which has 91 hotels worldwide, expected 2003 to be another challenging year, given the current global economic and political situation, although it added that it was well positioned to meet any immediate challenge. Group turnover in 2002 slipped 4.7% to £567.5 million, and although total occupancy rose 2.1 percentage points to 67.2%, it was unable to prevent RevPAR falling 5.2% to £44.17.

Travel Inn Broadens The Smiles - As if to emphasise its position as the UK's largest brand, boasting as it does 16,600 rooms, Travel Inn turned in a star performance over the 51 weeks to 22 February 2003. Whitbread's trading update for that period showed that the chain's like-for-like sales had grown 6.0% on the comparable period a year ago. Whitbread stated that its Marriott hotels had outperformed the four-star sector in terms of RevPAR, but the portfolio as a whole returned like-for-like sales down 0.4%. Total group sales for c ontinuing businesses were 4.0% ahead on last year.

Pritzker Family Links Its Chains - The Pritzker family of Chicago has announced plans for the reorganisation of the Hyatt Corporation, a move designed to pave the way for the hotel company's programme of acquisition. Hyatt Hotels Corporation (HHC), which is responsible for 122 hotels in the Americas, will unite its operations under the presidency of Douglas Geoga with those of Hyatt International, the sibling of HHC that is responsible for 90 hotels in the rest of the world. Under the auspices of the Pritzker's Global Hyatt initiative, Mr Geoga plans to acquire upscale properties and may possibly venture into other market sectors to acquire new brands. While claiming that the chain could double in size in the next few years, Geoga noted that it might be at least 12 months before any deals are signed. The Pritzker family is reported to be content to see the Hyatt Corporation grow, having no plans at present to float the business on the stock market.

A Taste Of Cadbury - Simon Matthews-Williams, the former Managing Director of Centre Island Hotels, has paid property group Wiggins £1.7 million for the Cadbury House country club in Congresbury, North Somerset. He now plans to add a block of 55 guest rooms to create a luxury hotel, and is reported to be in talks with Best Western International in regard to strategy. Up in the Midlands, meanwhile, the 88-room Holiday Inn Rugby/Northampton in Crick has reopened after a £1.4 million renovation. Elsewhere in the UK, Dr Diljit Rana, the Managing Director of property company Andras House, has signed a franchise agreement with Cendant Europe to open the £12 million Days Hotel Belfast this May. The 244- room property will be the largest hotel in Northern Ireland.

Dream Island To Become Reality - Work is set to start in the next few days on the construction of the Dream Island Resort, a man-made island that will lie off the coast of Bahrain, northeast of the capital Manama. The US$132 million project, the brainchild of Canada's Strategic Internet Investments, will include a world-class hotel as part of a mixed-use development that will cover 41 acres and take two years to complete.

Dorchester Group Goes Shopping In Milan - Starwood Hotels & Resorts will say goodbye at the end of June to one of its four hotels in the northern Italian city of Milan. The Dorchester Group, owner of four luxury properties, including The Dorchester on London's Park Lane, has agreed to pay €275 million for the 404-room Hotel Principe di Savoia in an unencumbered deal. The hotel was one of 25 in the Ciga Hotels portfolio, a collection of some of Europe's finest de luxe hotels which Starwood formally put up for sale in January 2002.

Five Go On The Market In Budapest - Pannonia Hotels, the Hungarian arm of Accor, is to embark on a sale and leaseback of five hotels in Budapest. The properties, together valued at a reported US$223 million, include the 74-room Pannonia Hotel Emke and one of the three Ibis hotels in the city. Pannonia would take a lease of at least 20 years on each hotel and use the money raised to fund further acquisition in Hungary.

MWB Is The Bank's Manager - The Times reports that property company Marylebone Warwick Balfour (MWB) is to assume the management, through its ServeCo service company, of the Royal Bank of Scotland's (RBoS) portfolio of 22 hotels. ServeCo will oversee the £250 million upgrading and updating of the portfolio, one which is valued at a reported £1.6 billion, and will advise RBoS on the hotels' brand and market status. As the newspaper suggests, this deal throws a lifeline to MWB, which announced last spring that it would have sold off its assets by the end of 2005.

Turkish Delights - Mövenpick Hotels & Resorts has opened its first hotel in Turkey, the 249-room, five-star Mövenpick Hotel Istanbul. Turkish hotelier Dedeman Hotels & Resorts, meanwhile, has headed out of the country and opened the US$12 million Hotel Dedeman Grand Chisinau in the capital of Moldova. Not only is the 143-room property Moldova's first five-star hotel it is also the company's first hotel outside Turkey.

IHIF Berlin Conference - The London office of HVS International is again delighted to be a sponsor of the hugely successful hotel investment conference, held each year in Berlin to coincide with ITB, the major travel industry trade show. IHIF starts on Tuesday evening, 11 March, and runs through to Thursday afternoon, 13 March; more than 1,000 delegates will be attending this most impressive networking and educational event. Russell Kett, Managing Director of HVS International, will be chairing a panel session on Hotel Branding on Wednesday afternoon, and presenting the HVS European Cup for Hotel Investment on Thursday morning. This is an innovation for this year's conference, and is designed to challenge delegates to predict the five European cities where hotel values rose the most in the past year, and the five cities whose hotel values exhibited the largest decline. The winner will be presented with a special trophy. Russell will also be launching the 2003 edition of HVS International's European Hotel Valuation Index at the conference, which provides key trends in hotel values across 28 major European cities. We look forward to welcoming our clients and friends at the HVS booth within the exhibition area throughout the event, and hope you will have a most pleasant, productive and profitable conference.

Absolute Share Price Performance Over the Past Week 27/02/03-06/03/03

Thistle Hotels - The share price was riding high, inspired by BIL International's offer.

Whitbread - Market rumours suggest that Whitbread is ripe for takeover, news which, when combined with a good trading update, conspired to raise the share price.

Jarvis Hotels - Last week's warning on full year profit had a predictable effect on the share price.

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