HVS Hospitality Enews Europe - W/e 8 November 2002
No Fireworks From Jarvis Hotels - The need in the current climate to replace corporate business with leisure business and the concomitant 2.7% decline in average room rate caused Jarvis Hotels' turnover to fall by 1.0% to £89.3 million in the 28 weeks to 12 October. Pre-tax profit before exceptionals fell 2.5% to £11.7 million, thus realising the company's warning issued in July to expect lower profits over the period. Occupancy across Jarvis's 69 hotels was down 0.2 percentage points on last year's comparable period to 70.0%, with RevPAR falling 3.0% to £36.59. With trading at its UK regional hotels showing signs of steady improvement, and with trading in London also on the upturn, Jarvis Hotels, though cautious, considers itself well placed to meet the future. That future will see the company's continued drive to evolve into a hospitality management services business. It was helped on its way this week, after shareholders voted in favour of the £150 million sale and leaseback of nine properties to a consortium of investors advised by Lioncourt Capital. Jarvis now holds a management contract or an operating lease on 22 of its 69 hotels, with 42 held freehold and five on occupational leases. The company has not ruled out further sale and leaseback deals, although these would reportedly be struck on individual hotels only.
Accor Still Expectant After Nine Months - Accor is confident that full year pre-tax profit will come in at €700 million, even though it has revised its forecast for full year RevPAR and recorded a decline in sales for the nine months to 30 September. Consolidated sales fell 1.7% to €5.4 billion, with the company blaming the economic slowdown and a weaker US dollar for trimming hotel sales by 0.6% to €3.8 billion. Total like-for-like sales in the third quarter in isolation, however, were ahead by 1.0%. RevPAR across the company's European economy hotels was 2.9% ahead on last year's comparable period but down at their US counterparts and at European business and leisure hotels by 4.2% and 2.2%, respectively. August's full year RevPAR figures of 3.6% growth for European economy hotels and 1.8% for European business and leisure hotels were trimmed to 3.2% and 0.1%, respectively, while negative growth of 1.5% at the US economy hotels was widened to 3.0%. Aside from the results, it was reported that Accor had paid nearly €39 million for a 64.9% stake in El Gezira Hotels & Tourism, the Egyptian company in which Accor expressed an interest last month.
Le Meridien's Sparklers; Hilton's Rooms Rocket - The 292-room, five-star Le Meridien Waldorf is the latest of Le Meridien's London hotels to submit to a programme of renovation, following in the recent footsteps of the Le Meridien Grosvenor House and The Cumberland Hotel. Like the Cumberland, the Le Meridien Waldorf will incorporate elements of the company's new Art + Tech design in its £20 million refurbishment, which will take 12 months and will include the addition of 12 guest rooms. Le Meridien has also disposed of the second of six former Principal hotels which it put up for sale in May. The 80-room, three-star North Stafford Hotel in Stoke-on-Trent went to Britannia Hotels for £3 million. Le Meridien has also announced the resignation of Tony Troy, its Regional Managing Director for the UK and Ireland. Hilton Group, meanwhile, is spending £27 million on adding 233 rooms to the 565-room Hilton London Gatwick Airport. Up at Manchester Airport Bewley's Hotel Group has acquired the Holiday Inn Garden Court Hotel from the Manchester Airport Authority. The 226-room hotel, Bewley's second UK property, had an asking price of £16 million, and will trade as a Bewley's Hotel from January 2003. Work to add 100 guest rooms will begin immediately. A luxury hotel could feature as part of a new £200 million stadium which Brentford Football Club wants to build on land owned by the Strategic Rail Authority at Kew Bridge in west London. Any work is subject to planning permission and government approval. Elsewhere, a private buyer has paid an undisclosed sum to Marston Hotels for the 86-room, three-star Hogarth Hotel in Earl's Court, southwest London.
Orb Handles Thistle With Kid Gloves - Orb Estates has issued a statement denying that it is in formal discussions with Thistle Hotels regarding the Jersey-based investor's possible takeover of the hotelier. Orb did note, however, that acquisition of Thistle was one of its various strategic options, and added that if it were to make a bid then this would be at a modest premium to the hotelier's current share price. The statement came amid speculation that BIL International was looking to sell its majority 46% holding in Thistle, speculation which BIL and Thistle separately quashed in statements of their own. However, Thistle's statement added that a leading shareholder in BIL itself was in talks with a party looking to buy its stake. One report named that shareholder, which holds a majority 22% stake in BIL, as the Camerlin Group of Malaysia, and the party, not named by Thistle, as none other than Orb Estates. Certain analysts consider that Thistle will eventually fall into private hands, but if these hands were to belong to Orb, they would at least be ones familiar to Thistle: Orb Estates acquired 37 Thistle hotels in a £600.4 million sale and leaseback deal in March.
Jurys Commits Itself To A Hotel In Dublin - Jurys Doyle Hotel Group is looking to add to the ten hotels it already has in Dublin by constructing what would be its third hotel in the Irish capital to take the Jurys Inn brand. The company is reportedly close to finalising a deal with Shelbourne Developments to build the €25 million 200-bed hotel near Parnell Street in the city centre. Jurys Doyle is also supporting Ryanair's plan, the €114 million T2 project, to build a second terminal at Dublin Airport. The group could possibly stake a claim on a three-star property, one of two hotels - the other a four-star property - to be built as part of the project. The O'Callaghan Hotel Group is also supporting Ryanair's plan.
Whitbread Spares A Crust For New Opportunities - Whitbread is to contribute a total of £15 million over the next three to four years to a £145 million private equity fund established by newly formed venture capitalists Langholm Capital. For its money Whitbread should acquire a stake of between 5% and 10% alongside partners including Unilever, which will take a 40% holding, and the Dutch Rabobank. The fund is committed to finding business opportunities serving the best interests of the partnership as a whole, and according to Whitbread Chief Executive David Thomas, the fund will allow it to explore new ideas that could provide long-term growth opportunities.
Hamburg Is Best Western's Next Port Of Call - Best Western International has opened the freshly renovated 113-room Best Western Hotel Hamburg International, thereby bringing to five the number of hotels it has in the northern German city. In the Latvian capital Riga, the US company PBR Hotels is keen to take full ownership of the 361-room Radisson SAS Daugava Hotel by acquiring the remaining 45% it does not already hold in Polarbek Daugava, the hotel's owner. The stake, which is held by the city council, is reportedly valued at anywhere between US$3.3 million and US$8.3 million, and the sale process could take up to six months to complete.
A Knight Of The Boardroom Table - Sir Anthony Jolliffe, a former Lord Mayor of London, will lead the Hospitality Investors Group's expansion into Europe and Asia after he was installed as the group's new Vice Chairman. Sir Anthony lines up alongside the likes of Tom Huffsmith, the former President of Regent International Hotels, who was installed as the new President of the private equity group in September.Absolute Share Price Performance Over the Past Week 31/10/02-07/11/02
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