HVS Hospitality Enews - W/e 15 February 2002
Six Continents has used the occasion of its annual general meeting to issue a trading update for the first 16 weeks of its new financial year to 19 January. For its hotels, the period under review is the 13 weeks to 31 December.
The group has performed in line with expectations and although travel within the USA has picked up, the company has noted no similar recovery in transatlantic travel. Consequently, although RevPAR at the Holiday Inn and Express by Holiday Inn properties has matched or exceeded that at the brands' respective competitive sets, it has suffered sharp falls at Inter-Continental hotels, particularly in North America. However, on a month-by-month basis, between October and January, the company saw signs of recovery in North America, although it found discerning a pattern for EMEA more difficult. Hotel operating profits are running with an average monthly decline of £15 million, with the Inter
Continental refurbishment programme expected to wipe £28 million off EMEA profits for the current financial year. However, on the plus side, the company can expect to see first-time contributions from the Posthouse hotels in the UK. Meanwhile, in an earlier announcement, Six Continents unveiled Chris Ward as its new Vice President of Strategy for the Americas. Mr Ward is charged with developing and implementing the company's five-year plan in the region.
The opening of the £10 million 80-room Myhotel in Glasgow has been postponed until January 2003, with a spokeswoman for the boutique hotel chain refusing to give a reason for the delay. Plans for the hotel were conceived two years ago, with the aim of making it the first hotel to have a feng shui theme. Although it stressed that the Glasgow project was still under consideration, Myhotel has been looking at other sites in the UK, and recently agreed to build an 80-room property in Brighton at The Square development.
'The most difficult quarter that we have ever experienced' was how Arne Sorenson, Chief Financial Officer of Marriott International described the company's fourth quarter ending 28 December 2001. The aftermath of the events of 11 September, the current economic climate and charges of US$271 million conspired to push the company into the red; it posted a fourth-quarter loss of US$116 million, compared with a profit of US$149 million for the previous year's comparable period. Revenue for the quarter fell 9.7% to US$2.87 billion, and RevPAR fell 25%, fulfilling predictions made last month by the ompany's Chief Executive Officer Bill Marriott Jr that RevPAR for the quarter would decline by 20-30%. However, Mr Sorenson predicted that RevPAR would rebound to a growth of 14-20% by the fourth quarter of 2002. He added that with hotel occupancy stabilising, earnings for 2003 should be stronger. Meanwhile, Marriott International's partner Ramada International has announced the rebranding of the 308-room former Forum Park Hotel Geneva as the Ramada Hotel Geneva Airport.
Countrywide Leisure Management, a hotel management and development company based in Ripon, North Yorkshire, has secured the right to franchise the Golden Tulip and Tulip Inn brands in the UK and Ireland. The award was made by the Netherlands-based management enterprise which recently acquired the Golden Tulip Worldwide franchising company from NH Hoteles. Peter Roberts, Countrywide's Managing Director, now plans to spend a reported £200 million over the next three years on franchising the brands to 30 new or existing threestar or four-star properties in major cities in the UK and Ireland. Countrywide currently manages the 111-room Golden Tulip Manchester and the 121-room
Despite the continuing uncertainty in trading conditions, De Vere Group has enjoyed a promising start to its new financial year. Group turnover for the first four months is up 10.7% on last year's comparable period, while an increase in leisure break business over the festive season helped boost like-for-like RevPAR at its De Vere Hotels by 3.1% and by 1.1% at its Village Hotels over the first four months. The group also revealed that the refurbishment of the De Vere Cavendish remained on schedule for completion in autumn 2002 and that its 11 Greens health and fitness clubs were trading in line with expectations.
Rezidor SAS Hospitality, the former SAS International Hotels, which operates the Radisson SAS and Malmaison brands, has returned upbeat results for the full year 2001. The group saw hotel revenue increase 5.3% to euro 1.09 billion, having over the year increased its number of operational hotels by 12. Operating revenue increased by 2% to euro 379 million. Occupancy at the group's comparable hotels was down one percentage point on the previous year to 68%, with RevPAR falling 3% to euro 71. Expressing his satisfaction with the group's financial performance, Kurt Ritter, President and Chief Executive Officer, stated that Rezidor was on course to become one of Europe's leading hospitality management companies. He added that the group had minimised the impact of the economic situation by adapting its costs.
The acquisition of the Hotellus chain in April 2000 and hotel properties including Mr Chip in Stockholm and Hotel Högvakten in Helsingborg helped boost Pandox's net operating profit by 17% to euro 51.8 million for the full year 2001. The Swedish hotel company, which owns 46 properties, some 8,469 rooms, HVS International, London Office HVS Hospitality Enews - 3 of 4 in Sweden and northern Europe, also saw property revenue increase by 15.6% on the previous year to euro 62.3 million. Commenting on what he regarded as being another excellent year for the company, Chief Executive Officer Anders Nissen said Pandox had been relatively well-protected in the aftermath of the events of 11 September thanks to the company's active risk management and the nature of its market segment.
Hungary's biggest hotel group Danubius, which controls some 6,900 rooms, has recorded full year 2001 results that have been blighted not only by the fall in the number of North American travellers but also by a rise in the number of rooms in Budapest's four-star and five-star hotels and the strength of the Hungarian forint. Charges of approximately euro 1.5 million, relating to restructuring and redundancy in the wake of the events of 11 September, helped push pre-tax profit down 12% to euro 17.9 million. However, the group did see revenue rise by 9.4% to euro 141.2 million. Meanwhile, the group has reportedly triumphed with its bid of approximately euro 24 million for a 67% stake in Slovenske Liecebne Kupele, a 1,600-room hotel complex in the Slovakian town of Piestany.
According to a report in The Sunday Telegraph newspaper, PR consultant Matthew Freud has rekindled his interest in acquiring the 12-strong Curzons health and fitness club portfolio from Whitbread for a reported £12 million. Mr Freud and his business partner, the confectionery heir Joel Cadbury, are looking to expand their business through leisure enterprises and would see Curzons as a complement to their £13 million Third Space gym which opened in London in May 2001. They reportedly came close to securing a deal late last year, before Whitbread opened talks with other parties fearing that Longshot Health & Fitness, of which Freud and Cadbury are directors, would be unable to meet the price in the economic climate then prevailing. Whitbread put Curzons up for sale in April 2001, preferring instead to concentrate on its David Lloyd health and fitness chain.
Pub retailer and brewer Greene King has put five freehold hotels, one pub and ten pub-restaurants up for sale. Greene King inherited the properties when it purchased Old English Inns in September last year in a deal which valued Old English Inns at £102.6 million. The five hotels, some 148 rooms, include the Blue Boar Hotel in Maldon, Essex; the Angel and Royal Hotel in Grantham, Lincolnshire, and the Angel Hotel in Abergavenny, Monmouthshire. These three hotels have a combined asking price of £2.35 million, although in common with all the properties up for sale they will be sold off individually.
Moscow's city government is to divest itself of its interest in 12 hotels by holding a series of auctions and investment contests over the coming year. The first auctions, which will begin in the first quarter of 2002, will involve four of the hotels, some 1,298 rooms, with the largest stake up for grabs being the 30% in the 644-room Zarya Hotel. Investment contests will start in the second quarter of 2002 with 100% stakes in the 925-room Ostankino Hotel and the 479-room Zolotoi Kolos Hotel up for sale. A highlight of the third quarter of this year will be the sale of a controlling stake in the 475-room Renaissance Moscow Hotel.
Accor Casinos' bid for ownership of Compagnie Européenne de Casinos (CEC) has received the backing of CEC's board, which may have brought relief to investors fearing a prolonged takeover battle with Groupe Partouche.
The share price has responded to the company's indication that it is trading in line with expectations. Before Six Continents' AGM, Lehman Brothers had reiterated its 'Strong Buy' rating on the stock.
The share price slipped following an overnight fire on 8-9 February at Hanover's 100-room hotel in Basingstoke. The company has stated that it has sufficient insurance cover to meet costs.