HVS Hospitality Enews - W/e 1 August 2003

Swallow After some eight months on the market 13 Swallow hotels have flown the Whitbread nest and landed in the lap of REIT Group. It paid £52 million for the properties, which will in turn be leased to Maycastle, part of the London Inn Group, which will be paying Whitbread £5 million for the right to operate the hotels. When the sale completes next month Maycastle is likely to change its name to Swallow Hotels Limited and run the hotels under the Swallow name, Whitbread having also sold the brand as part of the deal. The hotels, which total 1,148 rooms and span the UK from Dundee in Scotland to Ipswich in eastern England, are all that remain of the 38 Swallow hotels that Whitbread acquired in January 2000; 23 were subsequently converted to the Marriott or Renaissance brand, with the twenty-fourth opening last week as the London Marriott Hotel Kensington and number 25, the Nelson hotel in Norwich, likely to join the Marriott brand soon.

Skye Closing In On Macdonald Hotels The founding fathers of Macdonald Hotels have formed a new company, Skye Leisure Ventures, expressly for the purpose of making an offer of 260p a share for Macdonald Hotels. The bid, which will be upped only if another party decides to compete, represents a premium of 21.8% over Macdonald Hotels' closing share price on 17 June 2003 and values the company's existing issued share capital at some £156.8 million. Skye, which has Macdonald Chief

Executive Donald Macdonald and non Executive Chairman Frank O'Callaghan in its ranks, feels that Macdonald Hotels has been consistently underrated by the stock market ever since flotation in 1997.

Mövenpick 'Yes' To Yemen Mövenpick Hotels & Resorts is to step onto Yemeni soil for the first time after agreeing to manage a 330-room luxury hotel in Sana'a owned by the International Company for Touristic Investments. Across the border in Saudi Arabia, the Elaf Travel & Tourism Company, which holds the master franchise in that country on several of Accor's brands, is to manage the Mercure Habbah-I-Lah in Mecca. Looking westwards from Mecca, towards Morocco, is Le Meridien, which is to have a fourth hotel there. The 402-room Le Meridien Palais des Roses, which is owned by Helios International, is due to open in Agadir this September. Not to be outdone the town of Asilah further north along the coast will receive a four-star hotel and a five-star hotel as part of a US$54.9 million complex to be built from the start of next year.

InterContinental Hotels Injects Properties Into Turkey August will see Turkey harvest two new properties from InterContinental Hotels Group. The 130-room Holiday Inn Bursa will be followed by the 219-room Crowne Plaza Hotel Izmir, which is owned by local company Özdilek; both hotels complement the recent opening of the Holiday Inn Istanbul City, the 148-room property formerly known as the Hotel Olcay. Istanbul also features in the plans of the city's Chamber of Commerce and the Turkish Union of Chambers and Commodity Exchanges, which want to build a US$35.4 million five-star hotel of between 600 and 800 beds on a plot they acquired from the government for US$8 million. Also putting on its hard hat is Anemon Turizm, which wants to build a 188-room, five-star hotel as part of a US$10 million complex in the northwestern city of Eskiþehir. Taksim Otelcilik is not building, but it is selling; six of its ten Turkish hotels will be placed on the market towards the end of the month.

Accor Balloons In Walloon While strolling through southern Belgium recently, franchises in hand, Accor met Belgian real estate company Immo-Sambre. Their union has spawned four hotels with Accor brands: the Hotel Raymond in Mons will become a 72-room Ibis; the La Foret, also in Mons, will open at the end of the year as a 65-room Mercure; a Novotel will open in Liège; the identity of the brand of the fourth hotel, in Gosselies near Charleroi, was not disclosed in the report, though.

A New Era For The InterContinental May Fair? Reports suggest that Radisson Edwardian Hotels may be on the verge of purchasing the InterContinental May Fair London, the 290-room hotel that has been the subject of sales talk ever since InterContinental Hotels Group cancelled a proposed £60 million refurbishment last November. If, however, it does not succeed, then Radisson can at least throw itself later this year into the building of a £35 million 155-room, five-star property at Syon Park in west London and spend time now pampering the 148-room Radisson Edwardian Berkshire Hotel on Oxford Street with a £13 million make-over designed to raise the property's star rating from four to five.

Strategic Semi-Withdrawal From Paris Chicago-based hotel investment company Strategic Hotel Capital (SHC) has sold its freehold interest in the Paris Marriott Hotel Champs Elysées to Deutsche Immobilien Fonds of Hamburg for an undisclosed sum. SHC does however retain the leasehold on the 174-room property, an interest which is subject to a long-term management agreement with Marriott International. Also making news on the continent is Park Plaza Hotels Europe, which has made the 150-room Park Plaza Trier in western Germany its first franchise; further pursuit of this franchise strategy will be led by Hans J. Keller. And the latest entrant into the Design Hotels collection is the 18-room Hotel Greulich, which has opened in the Swiss city of Zürich.

Quartermile Enters The Final Furlong Southside Capital and its partners Bank of Scotland, Taylor Woodrow and the Kilmartin Property Group now only await the nod of approval from the Scottish Executive and they can proceed with their Quartermile scheme, a £400 million redevelopment of the site of the old Royal Infirmary in Edinburgh that will include a five-star hotel. Elsewhere in the city, Paramount Hotel Group has sold the 66-room, three-star Old Waverley Hotel to Saphire Ridge for an undisclosed sum. Meanwhile, Canadian firm Future Inns wants to build a £15 million 200

room, three-star hotel in Cardiff, one of six it wants to establish in the UK over the next three years. Across the sea in Ireland, the Tower Hotel Group and Monarch Properties are combining to build the €25 million 144-room, four-star Castleknock Hotel and Country Club on the western outskirts of Dublin.

NH Hoteles: Back In Black NH Hoteles has completed the presentation of its results for the six months to June by revealing that EBITDA was down 33.4% on last year's comparable at €70.3 million. The company was left with a net income for the period of €26.3 million; this was 40.0% less than NH Hoteles made the previous year, although it could have been worse given that the company ran up a loss in the first quarter. NH Hoteles pronounced itself satisfied with the EBITDA figure and felt itself to be on course for recovery.

Latvia Looks To Kempinski To Restore Sanitorium To Health Ominasis Latvia, the owner of the Kemeri health spa and sanitorium in the Latvian town of Jurmala, is hoping that Kempinski Hotels & Resorts will agree to transform the building into a 132-room hotel by 2005. Nearby in the capital Riga the populace has been cured of its wait for the 38-room, four-star Hotel Bergs, which has become the latest addition to the city's hotel stock.

Jarvis Hotels: Tough John Jarvis, Chairman of Jarvis Hotels, said he expected trading conditions to remain tough, as indeed they had been over the preceding year. Mr Jarvis illustrated the point by revealing that total turnover for the first 12 weeks of the company's new financial year was down 2.7% on the comparable period a year ago. Jarvis Hotels saw its enforced faith in the leisure market rewarded with rooms turnover from that segment running 2.0% ahead; sadly, this performance was undone by a 7.4% drop in revenue from corporate rooms.

Three Days One Summer The applause to greet the opener had scarcely died away at the cricket ground in Derby, where Kew Green Hotels has the 100-room Days Hotel, before Cendant Europe declared that it would be following on this month with the Days Inn Dundee and the Days Hotel Birmingham West. The Scottish hotel, developed by Pygmalion Properties, has 68 rooms and will be operated by Just Hotels. The West Midlands property, developed by BIC Hotels, has 133 rooms and was formerly the Howard Johnson West Bromwich.

Accor Suggests It Might Well Rain In September Though it is fairly sunny for Accor at present, the company indicated that the slow business that clouded its second quarter could well lead to gloom come 10 September when it reveals the full set of interims. Total like-for-like revenue in the six months to 30 June was down only 0.4% on the previous year's comparable at €3.3 billion. Accor's upscale and midscale European hotels and its economy hotels in the USA were united in both suffering falls in like-for-like RevPAR of 3.5%.

De Vere Group Pulls Leaver De Vere Group has announced that Carl Leaver, presently Managing Director of Travel Inn, will succeed the retiring Paul Dermody as its new Chief Executive on 1 September. Whitbread will replace Leaver with Mike Tye, currently Managing Director of its Costa coffee outlets.

Macdonald Hotels The share price responded warmly to the news of Skye Leisure Ventures'

takeover offer.

Accor Morgan Stanley keeps its 'Equal-weight' rating; Accor's interim revenues were

broadly in line with the broker's expectations. CAI Cheuvreux raised its rating

from 'Underperform' to 'Outperform'.

NH Hoteles The company's interim EBITDA beat Morgan Stanley's forecast; the broker

retains an 'Equal-weight' rating on the stock.