HVS Hospitality Enews Europe - W/e 3 May 2002
Optimistic Whitbread Rolls OnWhitbread has reported its results for its financial year ending 2 March 2002. Pre-tax profit before exceptionals, which relate to the demerger of its pubs and bars division and the imminent sale of the Pelican Group restaurant chain, fell 36% to £213.4 million, a figure which was in line with market expectations. Group turnover was down 22% to £2 billion.
Whitbread has reported its results for its financial year ending 2 March 2002. Pre-tax profit before exceptionals, which relate to the demerger of its pubs and bars division and the imminent sale of the Pelican Group restaurant chain, fell 36% to £213.4 million, a figure which was in line with market expectations. Group turnover was down 22% to £2 billion. Whitbread's hotel division, from which the company derives over one-third of its profits, pulled its weight and contributed sales of £581.8 million, an increase of 3.7%. The Marriott hotels contributed £404.5 million of this total, although their operating profit fell 8.9% to £71.6 million in the wake of the events of 11 September. Conversely, operating profit at the Travel Inn hotels rose 6.7% to £60.2 million. According to its Chairman Sir John Banham, Whitbread has made a promising start to its new year despite Marriott hotels in London experiencing softness. Chief Executive David Thomas added that with £250 million to spend on organic growth this year, the company would grow through acquisition should the right opportunity arise.
Six Continents has signed a management agreement with Spanish developer Med Group for 20 new Express by Holiday Inn hotels in cities such as Barcelona, Madrid, Valencia and Málaga. Six Continents plans to open more than 60 hotels carrying the brand over the next seven years. Elsewhere, Six Continents has also opened the 134-room Holiday Inn Vilnius in the Lithuanian capital.
Whitbread's Chief Executive David Thomas has confirmed that the underperforming Pelican Group restaurant chain will be sold within weeks, six months after the 154 outlets were first put up for sale. According to The Sunday Telegraph newspaper, the likely buyer is the private equity group ECI Ventures, which is expected to pay the book value of £50 million for brands including Café Rouge and Bella Pasta. Despite growing the chain in the six years it owned it, Whitbread never saw much return on its £133 million investment and has now incurred exceptionals totalling £175 million in writing it off.
Troubled Choice Hotels Europe (CHE Group) has plunged further into the red, recording a pre-tax loss of £4.2 million in its full year to 31 December 2001 compared with a loss of £0.2 million the previous year. The fall was attributed not only to the aftermath of the events of 11 September and the outbreak of foot-and-mouth disease in the UK but also to costs, which included those arising from the closure of ten loss-making leased hotels in Germany. Group turnover also fell, by 9.2% to £86.4 million. The group's owned and leased hotels in the UK and its hotels in France and Belgium showed an identical decline in like-for-like occupancy of 0.4 percentage points to 65.2% and 57.6%, respectively. The corresponding RevPAR remained essentially flat at £23.69 and £18.32. Chairman Andrew Speak considered that the group had now stabilised, while Finance Director David Cook said CHE Group might pull out of hotel ownership and would begin its recovery through sale and leaseback deals. To this end, the group is currently in the process of arranging a deal for its 155- room Quality Hotel Royal in Kingston upon Hull.
Hilton International is reportedly in talks with Turkish company Almer Turizm on the operation of the €22.2 million 430-room, five-star Almer Hotel that is due to open in Kayseri, central Turkey, in June this year. If Hilton takes up the hotel it would bring its Turkish portfolio to eight. Meanwhile, Pandox has sold two hotels in Sweden for a total of approximately €6.5 million. The 101-room First Hotel Jörgen Kock in Malmö and the 101-room Scandic Hotel Säffle were both sold to undisclosed buyers. The sale allows the company to focus on its larger hotels and provides cash for possible acquisitions.
Starwood Hotels has signed a management agreement with PKO BP bank, Warta Hotels development and construction companies NV Besix and NDI for a second Sheraton hotel in Poland. The €38.4 million 238-room Sheraton Cracow will complement the 350-room Sheraton Warsaw Hotel and Towers. Elsewhere in eastern Europe, Best Western International will bring its hotel portfolio in Romania to five when it officially opens the €6.7 million 132-room, three-star Best Western Bucovina-Club de Munte in the northeastern town of Gura Humorului in July this year.
NH Hoteles has added another two hotels to its ever expanding portfolio in Spain. It has a presence for the first time in Santiago de Compostela courtesy of an €11 million 159-room, five-star property which slips into its NH Gold Collection category and which is set to open in 2005. The company also has a second hotel in Cordova: a 65-room, three-star property which will adopt the NH brand from 1 June to become the NH Califa. Elsewhere, Hoteles Catalonia now has a sixth hotel in the Balearic Islands after it paid a reported €14 million for the 159-room, three-star Ses Estaques in Ibiza.
As part of its previously announced plan to make the UK and Ireland its second-biggest European market outside Scandinavia, Radisson SAS should have its first hotel open in Glasgow in October this year. This €73 million 247- room, four-star property will add to openings already planned this year in Leeds and Limerick. By 2004, Radisson SAS will have added hotels in Letterkenny, Liverpool and at Stansted Airport to its portfolio. In addition, the company is in talks to manage hotels in Aberdeen, Edinburgh, Newcastle, Reading and Bristol, and in the Irish towns of Cork and Tralee.
Luxury hotel chain Shire Hotels has opened the 123-room Thorpe Park Hotel & Spa in Leeds, bringing its UK portfolio to nine, some 819 rooms. Elsewhere, Thistle Hotels has renamed two of its hotels in London. The Heathrow Park Hotel is now known as the Thistle London Heathrow, while the Thistle Kings Cross becomes the Thistle Islington. And finally, according to a report in The Business newspaper, Peter de Savary, owner of the luxury Skibo Castle hotel in Scotland is looking to buy and redevelop properties in its likeness from Tuscany to the Bahamas.
Accor saw its sales for the first quarter edge up 0.9% to €1.67 billion, with hotel revenue increasing 1.4% to €1.14 billion. The company exceeded its own expectations on RevPAR, which, although down by 3.6% at its European leisure and business hotels and 4.5% at its US economy hotels, was up 3.8% at its economy hotels in Europe. Meanwhile, Poland's Orbis, in which Accor holds a stake of almost 25%, has reported a net loss of €4 million and a 15.4% fall in turnover to €35.3 million for its first quarter ending 31 March 2002.
French hotel and luxury goods company Société du Louvre has posted a 2.3% increase in its first-quarter turnover to €153.9 million. Although turnover at the company's economy hotels rose 11.3% to €70.9 million, it dropped 7.2% at its luxury Concorde hotels to €51.7 million. The company said that although RevPAR at its luxury hotels over the period was still depressed, it had recovered in comparison to the fourth quarter of 2001.
Queens Moat Houses (QMH) has issued a trading update for the first 17 weeks of 2002. QMH saw RevPAR rise by 1.7% at its hotels in the Netherlands but fall 2.4% in the UK and 3.9% in Germany. The company remained cautious on the prospects for trading in the short term, given the prevalent economic climate, but is confident that it can take advantage of any improvement in trading conditions.
Billionaire Saudi businessman Prince Al-Walid bin Talal bin Abdul Aziz has formed a new company, Kingdom Hotel Investment Group (KHI), which brings together his ten hotels in the Middle East. KHI, a venture unique in the Middle East and one which is reportedly valued at US$1 billion, will invest in new hotels in the region in a programme of aggressive expansion, with the aim of readying itself for flotation in the next three to five years.
The Moroccan government has initiated its Plan Azur, which aims to attract local and international companies interested in developing resorts at five sites on the country's Mediterranean and Atlantic coastlines. The US$5.2 billion plan, funded half by the government and half by the private sector, is designed to create 40,000-50,000 hotel rooms to boost tourist numbers to 10 million by 2010.
The share price received a boost with news that billionaire businessman Amancio Ortega, much respected by the markets, had raised his holding in NH Hoteles to 5%.
Lehman Brothers placed a 'Buy' rating on the stock as Accor met expectations on first-quarter revenue and exceeded its own expectations on RevPAR.
Certain analysts are concerned at the company's falling yields and its heavy debt.