Downturn Makes Little Difference At Macdonald Hotels
Macdonald Hotels, the UK's eighth-largest hotel chain, has announced its results for the six months to 4 October. Pre-tax profit of £7.5 million was up 7% on last year's comparable period, with turnover surging by 81% to £70.4 million. The group's 25 wholly owned hotels emerged relatively unscathed from the effects of the terrorist attacks in the USA and foot-and-mouth disease in the UK to post a 4% rise in occupancy to 66% and a 9% rise in RevPAR to £98.58. However, the group's 48 Heritage hotels, which it purchased earlier this year in a £235 million joint venture with the Bank of Scotland, suffered from their proximity to London, which has been badly hit by the loss of business from the USA. At these hotels, occupancy fell 4% to 70%, with RevPAR falling 3% to £93.28. Nevertheless, Macdonald Hotels sees great development potential in the Heritage portfolio, which will be expanded by up to 500 rooms thanks to a £60 million investment by the joint venture over the next five years. In addition, all Heritage hotels will take the Macdonald brand name by June 2002. Although the company sees considerable trading challenges ahead, it views the geographic spread and quality of its portfolio and the cost savings arising from the Heritage integration as just some of the reasons for future optimism.