Featured in this EMEA Hospitality Newsletter - Week Ending 29 October 2004
A Ritz-Carlton Fills That Gap
Whitbread, Part 1. A Review Of The Results
Whitbread, Part 2. The Results Of A Review
Sannine Zenith Knows How To Climb Every Mountain In Lebanon
Accor Shines On
Golden Tulip (UK) Checks In Airside
Down To The Beach And Up The Canals With Sunterra
Nine Months At NH Hoteles
Hotel du Vin: The Exeter Exciter?
Bank Buys Split Stake
Holmquist Quest In Sweden

A Ritz-Carlton Fills That Gap
The Soviet-era Intourist Hotel – dubbed the 'rotten tooth of Moscow' – was pulled down in 2002. Since then, many have chewed over the problem of how best to fill the gap. Red Square Development wanted a Hilton hotel there; but the plans subsequently stalled, and in May this year Capital Partners acquired the site. And now, reports The Moscow Times, the new owner has hit on a solution: a 300-room Ritz-Carlton hotel. With the financial backing of Kazkommerzbank of Kazakhstan, Capital Partners is said to be ready to invest US$150 million in the hotel, which has an opening date set for the first quarter of 2006.

Whitbread, Part 1. A Review Of The Results Return to Headlines
Chairman Sir John Banham and his colleagues on the board expressed their confidence in Whitbread's prospects as the company published its results for the six months to 2 September 2004. Pre-tax profit before exceptionals rose 9.4% to £147.4 million and turnover was 4.6% up on the previous year's comparable, at £1.0 billion. The Premier Travel Inn brand returned figures befitting the leader of the UK budget hotel market: a 28% rise in operating profit, to £49.1 million, and a 24% rise in sales, to £142 million. With occupancy two percentage points higher at 84% and average room rate also climbing, the chain posted RevPAR of £35.83. In contrast, Whitbread's Marriott portfolio again found the market a challenge, although its results were all positive. Operating profit edged up by 1.4%, to £36.7 million, and sales of £196 million were 0.9% ahead of the previous year's figure. Ominously, though, Whitbread noted that the return on capital employed remained 'unacceptably low' at 6.2%.

Whitbread, Part 2. The Results Of A Review Return to Headlines
Whitbread's Chief Executive Alan Parker has been studying every aspect of the company's businesses, and, as many industry observers had been anticipating, the results of that review were announced alongside the interim financials. Mr Parker plans to increase capital expenditure on new sites – both in the UK and abroad, where appropriate – to between £150 million and £200 million a year from the next financial year onwards. Such an outlay will, for example, allow the Premier Travel Inn brand to expand at a rate of 1,500 rooms a year; the target set for the portfolio is 35,000 rooms by 2008. The Chief Executive also wants to raise at least £800 million through the disposal of assets, a process in which the Marriott hotels will be heavily involved. A policy of 'sale and manage back' will be implemented over the next two years: the company hopes to commit 12 Marriott hotels to the process in 2005/06, and in 2006/07 to conduct phase two; by that stage perhaps as much as half of the current portfolio will be involved. The managed portfolio of hotels is set to include the newly announced 156-room Twickenham Marriott, which Whitbread is to build in partnership with the Rugby Football Union as part of the proposed £70 million redevelopment of the South Stand at Twickenham Stadium; the flagship Marriott hotel to be developed in St Pancras in London; and the Marriott that will rise on a Whitbread-owned site in Leicester. Whitbread put the UK's entire stock of 11 Courtyard by Marriott hotels on the market back in May, and this month announced that it also plans to sell its hotel and restaurants in Germany.

Sannine Zenith Knows How To Climb Every Mountain In Lebanon Return to Headlines
The path to the proposed construction of what could be the largest tourism project that Lebanon has ever seen has proved to be almost as rocky as Sannine Mountain, the resort's intended home. Although Sannine Zenith Holding, the developer behind the US$1.2 billion Sannine Zenith resort, still needs government approval the company is confident, reports the local press, that the master plan can be finalised by autumn 2005. That plan is in the hands of Canadian firm Ecosign Mountain Resort Planners; this 96 million m² resort would be the company's first commission in the Middle East.

Accor Shines On Return to Headlines
Photovoltaic cells may be generating the power to light some of the rooms in the Ibis Porte de Clichy, but what is it that is inducing a warm glow in Accor? Probably the sight of a 4.5% rise (like-for-like) in total revenues over the nine months to 30 September 2004. The hotels division contributed some €3.8 billion to the grand total of €5.3 billion, a contribution built on a 5.4% increase (like-for-like) in revenue from the upscale and midscale hotels and a 3.6% increase across the company's economy hotels. Growth in like-for-like RevPAR over the nine months was everywhere positive: upscale and midscale European hotels (2.7%); economy hotels in Europe (2.8%); economy hotels in the USA (1.3%). After the upscale and midscale hotels in France and the economy hotels in the USA had experienced what Accor termed a 'lacklustre July-August tourist season', September saw business customers return and with them an upturn in Accor's confidence. It reiterated that its target for full-year pre-tax profit was €570 million to €590 million.

Golden Tulip (UK) Checks In Airside Return to Headlines
Golden Tulip (UK)'s ongoing quest to populate the UK and Ireland with Tulip Inns has taken it to the Emerald Isle for the first time. The company is reported to have secured a 25-year lease on a 155-room hotel to be built, and subsequently owned, by TBD Group Holdings at the Airside Retail and Business Park near Dublin Airport. Expectations are that the €20 million hotel will open in summer 2005. Dublin Airport is close to the Portmarnock Hotel and Golf Links, whose owners are hoping that the local council will approve its plans to add a 39-room extension. The wait for approval is over for businessman Jerry Collins, though; he has been cleared to build a hotel as part of a €30 million mixed-use development in the town of Banteer, Co. Cork.

Down To The Beach And Up The Canals With Sunterra Return to Headlines
Vacation ownership company the Sunterra Corporation has added to its portfolio of European resorts with the acquisition of Jardines del Sol for an undisclosed sum. The resort on the island of Lanzarote in the Canaries offers 54 villas. Sunterra can now introduce its customers to some of England's waterways too, as the Club Sunterra portfolio has affiliated eight narrow boats operated by Alvechurch Waterway Holidays. While you are becalmed in a lock, spare a thought for Pestana Group, which will be rekindling memories of Portugal's proud seafaring past by voyaging around the west coast of Africa to the island republic of São Tomé e Principe. The company is due to step ashore in February 2005 to take over the management of the 70-room Rolas Island Resort.

Nine Months At NH Hoteles Return to Headlines
NH Hoteles saw EBITDA for the first nine months of its financial year rise 23.8% to €127.3 million. Total revenues of €689.4 million were 3.1% up on the previous year's comparable. Mentioned in the Spanish chain's dispatch for making worthy contributions to the EBITDA total were the hotels in Switzerland, Austria and Hungary, which saw a 39% increase, and those in Germany, which posted a 13.3% increase in EBITDA. Marketwide occupancy increased by 3.4% to finish on 62.5%. The Sotogrande resort in Spain was singled out for praise for more than quadrupling its EBITDA, to €50.3 million.

Hotel du Vin: The Exeter Exciter? Return to Headlines
Boutique chain Hotel du Vin, which Marylebone Warwick Balfour acquired earlier this month, is reportedly vying with a consortium of businesses based in Exeter for ownership of the city's Rougemont Castle. In neighbouring Cornwall, a new private owner has arrived to replace the former owners of the Cliff Head Hotel. The 58-room property on Carlyon Bay sold for an undisclosed sum off an asking price of £3.65 million. In south Wales, meanwhile, Alfred McAlpine Capital Projects has begun work on a 111-room Express by Holiday Inn next to Cardiff International Airport. The £5.3 million property is set to open in summer 2005. The task that the owners of the Sackville Hotel in Hove on the south coast of England have set themselves is the complete refurbishment of the property. The owners are reportedly hoping that the £5 million project, which requires council permission to proceed, will see the 45-room hotel regain its five-star status.

Bank Buys Split Stake Return to Headlines
The Croatian Privatisation Fund is reported to have accepted Hypo Alpe-Adria-Bank's offer of €11.7 million for a 68.08% stake in Hotel Split, which stands in the city of Split. The Austrian bank, which thereby takes its total holding to 85.5%, will now spend a reported €14.2 million over the next three years on renovation work designed to raise the 143-room property from three-star to four-star status. Further east, in the Ukraine, Soyuz Contract Investment is on a mission to build a hotel and office complex in the country's capital Kiev. Elsewhere in eastern Europe, vacation ownership company Interval International has affiliated the 22-unit Club Unicum, a boutique-style resort in the town of Hévíz in southwestern Hungary.

Holmquist Quest In Sweden Return to Headlines
The Swedish press reports that entrepreneur Hilding Holmquist, who already owns a number of hotels in northern Sweden, is set to build another. The town of Haparanda, which lies at the southernmost end of the border between Sweden and Finland, is the chosen location for a hotel and conference centre together costing a reported €33.3 million. Construction work on the property is scheduled to finish in August 2005.

Absolute Share Price Performance Over the Past Week 21/10/04-28/10/04

Accor - The company's sales met the expectations of both UBS, which keeps a 'Neutral 2' rating, and Deutsche Bank, which maintains its 'Hold' rating.

Whitbread - Though the interim results met expectations, the markets were reportedly disappointed that the asset disposal programme was not extensive enough.

NH Hoteles - UBS said that the company's results were broadly in line with its expectations, although hotel operating margins were weaker than expected. UBS keeps its 'Reduce 2' rating.