HVS EMEA Hospitality Enews - Week Ending 1 August 2008

The latest hospitality news from Europe, the Middle East and Africa

Rezidor's Norwegian Adventure

Rezidor Hotel Group has announced that it is to add three new hotels to its growing portfolio in Norway. An existing 42-room hotel in the city of Arendal, in southern Norway, is to be rebranded as the Park Inn Arendal in the third quarter of 2008, and a year later, after the addition of an annex, the hotel will operate with 114 rooms. Also in Arendal, Rezidor plans to create one of Norway’s largest resorts on the island of Tromøya, home to Norway’s Hove music festival, just outside of Arendal: the 290-room Radisson Sørlandet Resort Tromøya will open in the third quarter of 2011 directly on the waterfront. Rezidor then turned north and travelled to Oslo to announce the 300-room Park Inn Gardemoen Airport. This hotel is expected to open in the third quarter of 2010 in the terminal building at Oslo Airport, Gardemoen where it will join its sister property the Radisson SAS Airport Hotel.

A Radisson Grand For Rostov-on-Don

Rumours abound that Rezidor Hotel Group has signed a management agreement with Moscow-based Panavto for a Radisson Grand hotel in the city of Rostov-on-Don, in south Russia. Construction on the 528-room hotel is scheduled to start in the second quarter of 2009 and it is expected to open at the end of 2011. A reported €140 million is to be invested in the project. This will be the second Radisson hotel in the city along with the Radisson SAS Don Hotel.

A Swap Of Assets for Whitbread And Mitchells & Butlers

When Whitbread found that it couldn’t develop a Premier Inn hotel alongside 44 of its pub restaurants, owing to planning constraints, it didn’t despair...it just decided to swap them for some new hotels! The company has announced that it is to acquire 21 Express by Holiday Inn hotels, with a total of 1,245 rooms, through an exchange of 44 Whitbread pub restaurants (currently trading under the Brewers Fayre and Beefeater brands) with Mitchells & Butlers. This exchange of assets is based on an equivalent EBITDA of approximately £9 million and a value estimate of £78 million for each asset. The hotels will become part of Whitbread’s Premier Inn portfolio upon completion of the deal, which is expected on 19 September 2008.

An Element Of Luxury For Abu Dhabi

Starwood Hotels & Resorts Worldwide has got together with Abu Dhabi National Exhibitions Company (ADNEC) to bring its Element brand to the EMEA region. The first Element hotel to be developed outside of North America will be located at ADNEC’s micro-city Capital Centre development in the UAE’s capital Abu Dhabi. The hotel is expected to open in 2011 with 266 rooms.

A Fairmont For Abu Dhabi Creek

Abu Dhabi has proved to be a popular destination this week as Fairmont Hotels & Resorts has travelled to the emirate to announce the Fairmont Abu Dhabi Creek. The 369-room beachfront hotel will open at the AED800 million (US$217 million) Abu Dhabi Creek Business Resort development in 2009; it is the second project Fairmont has announced for the emirate as a Fairmont hotel is scheduled to open at the Abu Dhabi Marina development in 2011.

InterContinental Heads Downtown In Kuwait

InterContinental Hotels Group (IHG) has joined up with Kuwait-based Bukhamseen Holding Group once more to develop another property in Kuwait. IHG have signed an exclusive agreement for the 200-room InterContinental Kuwait Downtown, which is scheduled to open at the beginning of 2010. IHG currently manages two properties for Bukhamseen in Kuwait, a Crowne Plaza and a Holiday Inn, and the two companies recently announced two new Staybridge Suites properties for Kuwait City. However, IHG didn’t hang around in Kuwait; the company has also announced this week that it has signed a 15-year management contract with Ukraine-based company ITT-Plaza to bring the Ukrainian capital Kiev its first Crowne Plaza property. The 225-room Crowne Plaza Kiev will kick off in time for the UEFA European Football Championship, which is to be jointly hosted by Ukraine and Poland. This will be IHG’s third hotel in Kiev: the InterContinental Kiev and the Holiday Inn Kiev are due to open at the end of 2008 and 2009, respectively.

A New Ramada For Romania

Romanian company ABA Turism has signed an agreement with Trend Hospitality, which holds the franchise rights to the Ramada brand for Romania, Bulgaria and Moldova, to develop a three-star Ramada hotel in the Romanian city of Oradea. ABA Turism plans to invest €15 million in the 131-room hotel which is expected to be completed by June 2010. There are currently five hotels in Romania operating under the Ramada brand: three in the capital Bucharest, one in the city of Iasi in the northeast and one in Sibiu in Central Romania.

A Sofitel Opens At Heathrow

No need to worry if your flight is delayed at Heathrow’s Terminal 5 (T5) you can now stay in the Sofitel London Heathrow. The five-star, 605-room hotel opened yesterday at Heathrow Airport and it is linked directly to T5 by a bridge. The hotel is owned by Arora International Hotels under a Franchise agreement with Accor Hotels & Resorts. This is the third Sofitel hotel in the UK, along with the 186-room Sofitel London St James and the 518-room Sofitel London Gatwick, which is also owned by Arora. The London office of HVS is delighted to have advised Arora Hotels on their bid to be awarded the opportunity to develop the Sofitel at T5.

Rezidor Hotel Group Announces Its Second Quarter Results For 2008

Rezidor Hotel Group has recorded a revenue increase of 12.3% to €221 million for the second quarter of 2008, with a like-for-like RevPAR growth of 12.4%, compared to 4.2% for the first quarter of the year. Revenue from January to June 2008 increased by 7.5% to €398 million from €370 million for the same period in 2007, and like-for-like RevPAR for the first half of 2008 grew by 7.9%. the company’s President and CEO Kurt Ritter commented that “Since January 2007 we have opened 6,900 rooms, of which 93% are fee based. 2008 will be another record year in terms of contracting new rooms and growing our pipeline.”

Sol Melia Announces Its First Quarter Results For 20080

Sol Melia has recorded total revenue of €295 million for the first quarter of 2008, an increase of 1.9% on the same period in 2007. Total revenue for the company’s owned and leased hotel business was recorded at €230 million, an increase of 1.5%. RevPAR for owned and leased hotels decreased by 0.8% for the first quarter of the year. Sol Melia’s Co-Vice Chairman and CEO Sebastian Escarrer stated that the first quarter results “are negatively impacted by a combination of factors” and that “Going forward, current booking positions point towards a positive summer season.”

Kiessling's Corner

Gabriele Kiessling, HVS Analyst, Madrid, is here with this week's news from Spain. The hotel chain Kris Hotels is to extend its portfolio with the acquisition of a new establishment in proximity of Madrid’s Barajas Airport, close to the IFEMA and the Palacio Municipal de Congresos. The Suites Kris Aeropuerto, which is expected to open in September 2008, will have 300 one-bedroom and two-bedroom apartments. Furthermore, the hotel will offers various rooms catering to different types of events and five executive suites. The hotel chain Cordial Canarias Hotels & Resorts has increased its portfolio with a new aparthotel in Gran Canaria, which opened recently at the end of June. The three-star, 303-unit Cordial Mogán Valle offers swimming pools, a gym, spa and wellness facilities and a convention room with capacity for 220 people. The new establishment is located in Puerto de Mogan harbour, known by its visitors as little Venice. This hotel is the fifth Cordial establishment in the Canary Islands. The company is planning to enlarge its hospitality portfolio in the future.

Absolute Share Price Performance Over the Past Week 24-31 July 2008

Accor - Accor has reported a 6.2% decrease in sales for the first half of the year. The company has said that it was hit by business disposals, the strength of the euro against the dollar and a weakening US economy.

Sol Melia - The company has said that its performance for the first half of the year was negatively affected by factors including the timing of this year's Easter break, the general elections in Spain and currency depreciations.

NH Hoteles - Jefferies International Ltd has commented that the company is reviewing its expansion plan.

For the latest in the hospitality industry, please visit: http://www.hvs.com. You are also welcome to contact the following personnel.

Russell Kett, Managing Directorrkett@hvs.com
Charles Human, Managing Director – HVS HWEchuman@hvshwe.com
Hadrien Pujol, Directorhpujol@hvs.com
Demetris Spanos, Managing Director – HVS Athens
Hala Matar Choufany, Director – HVS Dubaihchoufany@hvs.com
Christopher Mumford, Managing Director – Executive Searchcmumford@hvs.com
Philip Bacon, Managing Director – HVS Madrid and Managing Director, EMEA & Asia – HVS Shared Ownership Servicespbacon@hvs.com
Louise Fury, EMEA Hospitality Enews Authorlfury@hvs.com