NH Hoteles' First Quarter Is Outwardly Respectable

NH Hoteles has reported its results for its first-quarter ending 31 March 2002, results which, for the first time, incorporate the activities of its NH Mexico division. The company saw net profit rise 53.1% to €22.2 million, thanks in part to a capital gain of €15.8 million from the sale and leaseback of four Spanish properties in February. Total revenue rose 6.1% to €175.5 million. Certain analysts, however, prefer to focus on EBITDA for a clearer picture of how the economic slowdown is affecting the company. NH Hoteles laid part of the blame for an 11.5% decline in EBITDA to €40.6 million, a figure lower than analysts' expectations, on the Easter holidays' falling in the last week of March. However, analysts consider that the company's fortunes, supported by its costsaving plans, should improve over the coming months. Analysts were also disappointed by the company's like-for-like sales, which were down 4.9% in Spain and 4.6% elsewhere in Europe.

ICE Spies Its Opportunity

Nicholas Miller of Kingston Smith & Partners, the liquidators acting for the company Dewrun, has sold the freehold interest in the 72-room, three-star Quality Hotel Kensington, in London, to the International Currency Exchange (ICE). ICE, which is based in Piccadilly, paid an undisclosed sum off an asking price of £7.5 million for the hotel, which ICE will use as the foundation for further expansion. Meanwhile, over the border in Scotland, the Paramount Hotel Group has put the landmark 66-room, three-star Old Waverley Hotel in Edinburgh up for sale with an asking price of approximately £5.5 million. According to Paramount's Finance Director Ian Goulding, the company has recently been selling hotels that do not meet its criterion of having 100 rooms or more.

Choice Gives Us Five In Spain

Choice Hotels International has kept a New Year's resolution by making its debut in Spain with the addition to its portfolio of five hotels, a total of 518 rooms. The 90-room Quality Hotel Fataga at Las Palmas in the Canary Islands is joined by four hotels in and around Barcelona: the 94-room Quality Hotel Bel Air, the 42-room Comfort Hotel Abbot, the 234-room Clarion Hotel Don Jaime and the 58-room Comfort Hotel Alfa Penedes. Choice Hotels will add further hotels in Madrid, Alicante and Bilbao, and aims to have 20 hotels in Spain by the end of the year.

AC For JV

AC Hotels has paired up with Corporación Financiera de Galicia, a wholly owned subsidiary of Spanish savings bank Caixa Galicia, to form a 50:50 joint venture called AC Desarrollo de Hoteles. The new partnership's first move will be to invest €13.5 million in the construction of a 100-room spa hotel, which is set to open at the end of 2003 in the northwestern Spanish town of Allariz, Orense, Galicia. A four-year plan is designed to give the joint venture a total of 600 rooms, which it aims to achieve by opening one four-star AC hotel in each of the cities of A Coruña, Vigo, Oporto and Lisbon.

Kuwait Waits At Front of Queue For Hilton

Hilton International is set to make its debut in Kuwait in June when the Hilton Kuwait Resort will be the first of 11 hotels that Hilton is currently developing in the region to open. The company recently announced that it should have its first hotel in Qatar by 2004, having signed an agreement with Doha Hotels, and is developing six hotels in Egypt, and two in each of Saudi Arabia and Lebanon. Hilton is also reported to be evaluating the possibility of broadening its scope in the region by flexing the Scandic and Conrad brands. Elsewhere, the company should have its seventh hotel in Turkey on 16 May when the 277-room Hilton Konya opens in the central region of the country.

Shangri-La Finds An Ideal Home In The Middle East

Shangri-La Hotels, which is based in Hong Kong, will venture out of the Asia-Pacific market for the first time in March 2003 when it assumes management of the de luxe, 301-room Shangri-La Hotel Dubai at the Al Jaber complex. This initial foray will be followed up in July 2003 with the 250-room, four-star Traders Hotel in Deira and early in 2005 with an 800-room luxury resort in the Omani capital Muscat. According to its Vice President for Marketing Peggy Angeles, Shangri-La has plans to secure management contracts on a further six to eight properties in the Middle East before it turns its attentions to Europe and the USA.

Rotana Hotels To Leave A Footprint On Palm Island

Rotana Hotels is to commit a reported €75.5 million towards the construction of a hotel on the €3 billion man-made Palm Island resort development in Dubai. Rotana, which currently manages 15 hotels in the Middle East, will be followed onto the island by the Al Habtoor Group, which is to build a hotel on The Palm Jumeirah half of the development under the auspices of its Metropolitan Hotels International arm.

Accor Tightens Its Belt

According to its Chief Financial Officer Benjamin Cohen, Accor will spend approximately €700 million on development this year, a reduction of 24% compared with 2001. Mr Cohen explained that the cut in spending, which had been forced by the prevalent economic climate, would at least allow the company to trim its debt to equity ratio by 1.6 percentage points to 65%. Straitened financial circumstances notwithstanding, Accor has announced plans to increase its existing portfolio on the Arabian peninsula to 28 hotels, a total of more than 6,000 rooms, by 2005. According to its Regional Director of Operations and Development Christophe Landais, Accor is responding to the region's strong growth as a business and leisure destination, and will open four of the properties this year, in Bahrain, Yemen and the emirate of Abu Dhabi.

Open And Shut Cases: Halcyon's Days Are Numbered

An 'affordably chic B&B hotel' is how Firmdale Hotels describes its latest London property, a 44-room hotel that is due to open in Knightsbridge on 16 May. Firmdale currently has four hotels, some 198 rooms, and the 40-room Number Sixteen bed and breakfast establishment in London. As one hotel in the UK opens, so another two are set to close. First to disappear will be the 42-room, four-star Halcyon hotel in west London, which opened in 1985 and which was described by its present General Manager Will Oakley as one of the first boutique hotels. The doors will close at the end of May after the hotel's owner, the Halcyon Hotel Corporation, decided to put it to other uses. Next to close, on 4 August, will be the 173-room Birmingham Grand Moat House hotel after Queens Moat Houses (QMH) surrendered its lease. QMH reached its decision after concluding that the investment needed to bring the hotel's facilities up to brand standards was not viable, especially since its lease was due to have expired in 2014. The hotel will revert to its owner Hortons' Estate.

Miscellaneous Adventures In Europe

Ramada International will this month be dipping its toe into management waters for the first time since its incorporation by Marriott International when it opens its third property in Italy, the Ramada Hotel Occhiobello. The four-star hotel, located in Occhiobello near the city of Ferrara in the north of the country, has been enjoying a renovation, which has taken its room count from 37 to 120. Meanwhile, the Dutch Von der Heyden Group will open the €11.5 million 72-room, four-star boutique Sorat Grand Hotel Lublinianka in the Polish city of Lublin on 13 May, some six months behind schedule. Germany's Sorat Hotels will be managing the property. Elsewhere, Portugal's Pestana Hotels is reportedly looking to venture into Spain, Morocco and Tunisia, and possibly further afield into Angola and Cape Verde.

Orient-Express Hits The Buffers But Expects To Rebound

According to its Chairman James B. Sherwood, the aftermath of the events of 11 September continues to have an effect on Orient-Express Hotels as the company's results for its first-quarter ending 31 March 2002 show only too clearly. EBITDA fell 34% to US$9.7 million, with revenue falling 7% to US$53.7 million. Comparable RevPAR worldwide was also down, by 12% to US$154. Nevertheless, President Simon Sherwood predicted that the company would have a satisfactory year and felt that all hotel companies would have excellent

third and fourth quarters.

Fitness First Stretches To Curzons

Whitbread has worked out a £6 million cash deal with Fitness First for the sale of Curzons Management Associates, the operator of Whitbread's 12 Curzons

fitness clubs in central London. For its outlay, Fitness First inherits approximately 13,000 members and brings to 38 the number of clubs it operates in the capital. It will spend the next six to 12 months upgrading the clubs and integrating them into its portfolio. Curzons was first put up for sale a year ago with a price tag, according to reports, of between £15 million and £20 million, as Whitbread preferred to concentrate on growing its David Lloyd Leisure health and fitness chain. Indeed, the company officially opened its forty-ninth David Lloyd Leisure club only last week at Nonsuch High School for Girls at Cheam in Surrey. Whitbread's ultimate aim is to have a total of 100 clubs.

Jarvis Hotels The share price rose after a mystery investor took a 3% holding in the company.

Queens Moat Houses The share price rose again after Westmont Hospitality Group took its stake in the company from 7.97% to above 10%.

NH Hoteles

Lehman Brothers lowered its rating on the stock from 'Buy' to 'Market Perform'

to reflect its disappointment at NH Hoteles' first-quarter results on an operating level.

Stephen Rushmore
President
516-248-8828, ext. 278
HVS