HVS Hospitality Enews - W/e 19 July 2002

Hilton International has made its debut in Kuwait with the opening of the US$100 million 147-room Hilton Kuwait Resort in Mangaf. Hilton announced in May that it intended the resort to be the first of 11 hotels which it would open in the Middle East. The company is set to open its first hotel in Qatar in 2004, and is developing six hotels in Egypt and two in each of Saudi Arabia and Lebanon. It was in Lebanon where Hilton finally said farewell to the ill-fated Beirut Hilton. Thanks to the civil war the hotel never welcomed a paying guest in its entire 27-year existence, and has now been demolished. The hotel's owner Société Méditerranée des Grands Hotels has plans to bring in an as yet unnamed international operator to take charge of the US$100 million 420-room, five-star hotel which will rise on the site by mid 2004.

NH Hoteles recorded an 11.6% increase in its consolidated sales for the first half of 2002 to €414.3 million. The rise was due in part to a contribution of €34 million for the months of May and June from German hotel chain Astron Hotels, the company in which NH Hoteles took an 80% stake back in February. Without this contribution, the results would have been more modest: sales at the company's Spanish hotels were essentially flat at €175.4 million, whereas among its hotels in Belgium and the Netherlands they declined 1.3% to €151.4 million. Average occupancy across the company's comparable hotels was 67.0%, down 2.8 percentage points on the same period a year ago, with RevPAR falling by 3.8%. Away from the sales talk NH Hoteles revealed new hotel project number 38: the €17 million refurbishment of the landmark Palacio de los Ferrera in the northern Spanish coastal city of Avilés, just west of Gijón, to create an 80-room, five-star hotel that is due to open in April 2003.

AC Hotels has given the northwestern Spanish town of Ponferrada (León) its first four-star hotel after opening the 60-room AC Hotel Ponferrada. The company has invested €60 million in nine hotels in the region, five of which are now open. Meanwhile, in the southwest of Spain, property company Navicoas has joined forces with the municipal authorities of Sanlucar to build an €8.5 million 86-room, four-star hotel in Cádiz. Work to renovate the seventeenth-century building that the hotel will occupy is due to begin in September, with the hotel expected to open in 2004. Over the border in Portugal, the government is poised to sell five or six 'regional' pousadas from the 43-strong state-owned Pousadas de Portugal chain. Those pousadas under the hammer no longer fulfil the chain's concept and will be replaced by 2006 with five 'historical' pousadas in five separate locations across the country. Elsewhere, the regional government of the Azores will contribute €5.1 million of the €28.3 million to be invested in the construction of two four-star hotels: one on São Miguel and the other on Terceira.

Starwood Hotels & Resorts has scotched rumours which surfaced last week linking it with a €20 million acquisition of the up-market 90-room Morrison Hotel in Dublin. Earlier reports had indicated that the hotel was being lined up to be the first in Europe to take Starwood's W brand. The company confirmed that Dublin had indeed been considered as a possible location in which to make an acquisition, although it went on to state that Ireland in general, together with London, was of more particular interest. Certain industry insiders are reportedly of the opinion that Starwood would not make an outright purchase of the Morrison Hotel and name Rocco Forte Hotels as a more likely candidate for this honour.

The Bineval charitable fund is set to build two hotels in the centre of St Petersburg. In partnership with the Austrian contractor Shomburg, it will begin work on a US$14 million 200-room, three-star hotel and will follow this, if

planning permission can be secured, with a US$112 million four-star hotel complex. Meanwhile, Umaco, which operates two hotels in Moscow, has far grander plans for the Black Sea resort of Sochi. Together with the city authorities it is looking to raise a reported US$1 billion to fund the construction of a chain of 58 hotels which Umaco itself will operate.

A third hotel will now feature on the Princes Dock development in Liverpool after the Mersey Docks and Harbour Company received council approval for its revised plans. The new addition is set to occupy an 11-storey building facing the Pier Head and will join the already operational 159-room Crowne Plaza Hotel and the proposed 151-room Malmaison hotel. The Malmaison chain is owned by Rezidor SAS Hospitality, which, according to a report in The Times, is in talks with Carlson Hospitality with a view to taking over the Country Inns & Suites by Carlson and Park Inn brands in Europe.

Corinthia Hotels International has announced that it is to build a flagship fivestar hotel in Istanbul. The company currently has five hotels in Turkey, and is also looking to increase its worldwide portfolio by expanding into Croatia, Poland and China among other countries. Elsewhere in Turkey, Akbank is providing a €100.6 million loan for the modernisation of the six state-owned hotels on which Radisson SAS, Millennium & Copthorne and Swissôtel recently secured two management contracts apiece. Of this money, €40.6 million will be spent on the 446-room, five-star Grand Hotel Efes in Izmir, which will reopen in two years' time as the Swissôtel Izmir. Meanwhile, the Kayseri Youth and Sport directorate has opened a tender for the ten-year contract to operate the 53-room Ercýyaþ Turistik Daðý Hotel in the central region of Kayseri.

Germany's Maritim Hotels has secured the contract to manage a 440-room hotel in the Cairo suburb of Heliopolis from 1 January 2003. Maritim sees the hotel, which is owned by Arab World EgyptAir Hotels, as being the first of three hotels which it wants to establish at resorts in the country. Elsewhere in the region, the third and final stage of the US$54 million refurbishment of the Le Royal Méridien Beach Resort & Spa at Jumeirah in the emirate of Dubai has begun. The refurbishment started 18 months ago and should be complete by mid September.

US businessman Paul Oberschneider is looking to sell three luxury hotels which he owns in the neighbouring Baltic states of Latvia and Estonia. Ignoring the protests of the hotels' operator Consul Hotels International, he tried to interest an unnamed French company and businessmen from Estonia and abroad in the 56-room Park Consul Grand Palace Hotel in the Latvian capital Riga, and the 27-room Park Consul Hotel St Petersbourg and the 23-room Park Consul Hotel Schlössle in the Estonian capital Tallinn. However, his efforts have so far been in vain as he has not received an acceptable price; the Park Consul Hotel Schlössle was on offer for a reported €6.4 million. According to reports, Mr Oberschneider's willingness to sell may be linked to the upcoming court battle between his companies and Consul over a long-standing contractual dispute.

According to its Chairman Mike Bailey, Compass Group wants to operate some Travelodge hotels and Little Chef restaurants under franchise, even though it announced last month that it had put both chains up for sale. The purpose behind this move is twofold. First, 38 of the group's 47 Moto motorway service stations have a Little Chef restaurant. Second, Compass wants to take Moto into Europe and could pair up the motorway service stations with Travelodge hotels. Compass revealed last December a desire to take the Travelodge brand to the continent and had planned to open one hotel in each of Madrid and Barcelona in summer 2003.

The 119-room, de luxe four-star Apex City Hotel has opened in Edinburgh to become Apex Hotels' fourth property in Scotland. The new £15 million addition stands next door to the Apex International Hotel. Meanwhile, the new headquarters of Six Continents Retail in Birmingham city centre is set to feature a 120-room hotel in addition to offices. In nearby Stratford-upon-Avon, in Warwickshire, plans for a 68-room budget hotel look set to be approved, despite protests from local hoteliers and others.

Countryside Strategic Projects is planning to build a 94-room hotel as part of a £10 million mixed-use development in Chelmsford, Essex. Countryside, which claims that a national chain would operate the hotel, is also keen to develop a hotel at the new railway interchange being proposed on a site to the northeast of the town. Elsewhere, the former Woodlands Manor country house hotel in Great Leighs, near Chelmsford, is to reopen next year as the 35-room Black Notley Manor. The hotel is owned by Essex County Showground, which is currently developing the £40 million Great Leighs Racecourse adjacent to the hotel.

Rumours persist that Six Continents may acquire NH Hoteles. The good interim sales figures from the Spanish group thus gave Six Continents' shares a lift, a rise cemented by a 'Buy' rating from Credit Suisse First Boston.

The company's good interim results helped the share price recover slightly from the battering it had taken earlier in the week amid fears that the current Spanish tourist season will be one of the worst on record.

The share price rose after Hilton was given a 'Buy' rating by Credit Suisse First Boston, which also named Hilton as the pick of the European hotel groups.