Global Hospitality News: eHotelier Newsletter

Macdonald Hotels has appointed Patrick Dempsey as its new chief executive, allowing founder Donald Macdonald to become executive chairman.

Dempsey, 44, joins from Compass UK where he is chief exec of its fine dining division Restaurant Associates. Before Compass he was MD of Posthouse and is acknowledged to have been behind its successful repositioning as a mid-market brand before it was sold to Bass, as was.

Before Posthouse he spent twenty years with Forte Hotels.

(Reuters) - Host Marriott Corp. reported a widened loss in the first quarter as the war in Iraq kept travel slow and the weak economy kept both business and leisure customers at home, the largest U.S. hotel owner said on Wednesday.

The company also forecast a loss for the second quarter and full year and warned it was unlikely to pay shareholders "a meaningful dividend" because of the expected weakness.

Hopes for Host Marriott had been tempered by a slew of warnings from lodging companies, including Marriott International Inc, the hotel manager which is the sister company of hotel owner Host.

Property owners shoulder the brunt of slow travel, compared with management companies that earn some fees unrelated to hotel traffic.

Bethesda, Maryland-based Host Marriott reported a loss of $43 million. or 16 cents per share, compared with a loss of $8 million, or 3 cents per share, in the year-ago quarter.

Funds from operations, a measure of cash flow closely followed in the real estate industry, fell to 16 cents per share from 24 cents per share.

Analysts polled by Reuters Research, a division of Reuters Group Plc, had forecast funds from operations of 11 cents to 18 cents per share, with the consensus at 15 cents.

Revenue fell to $805 million from $787 million. The company's revenue per available room (RevPAR), a barometer of strength in the hotel industry, fell 5.5 percent on a combination of declining prices and slipping occupancy rates.

Host Marriott said it expected RevPAR to drop 6 percent to 8 percent in the second quarter and 2 percent to 3 percent for the full year.

Based on the RevPAR outlook, the company forecast a second-quarter loss of 9 cents per share to 12 cents per share, and a full year loss of 57 cents to 65 cents.

Funds from operations is expected to reach between 20 cents and 23 cents in the second quarter and 73 cents to 81 cents for the full year, the company said.

Marriott International and other rivals expect room revenue, the industry's key barometer of strength, to shrink 1 percent to 2 percent this year, even with modest improvement in the second half of 2003. Hotel executives have warned that the soft economy is still a major hurdle to clear before the industry returns to health.

Shares of Host have risen 31 percent since mid-March, largely due to anticipation that a short war in Iraq could clear the way for businesses to resume travel. But they are still down 9.5 percent this year, compared with a 10.5 percent rise by the Standard & Poor's index of hotel companies, mostly managers.

Hyatt's goal is simple: differentiate the sub-brands

TravelWeeklyEast.com - With Hyatt International, Grahame Carder’s mission is simple: To communicate the differentiation in its sub-brands from the Park to Grand, Regency and Resorts.

The vice president of marketing acknowledges that the company is facing an issue of branding as it grows its four brands in the region.

“Over the next three years, you will see Hyatt communicate, hopefully, articulately and credibly, the issue of sub-brands which are fundamental to our expansion,” he said.

Asked why Hyatt, which had a strong core brand, was going down the same path as other hotel companies which had also created sub-brands and were facing an issue of brand-blurring, Carder said, “It’s a vehicle for expansion and differentiation.

“Depending on the size of the city, we can plant more flags and create more differentiation. The challenge is us managing the perceptions.”

· Park – small, upscale, discreet, boutique, personal experience. For both business and leisure customers. Usually found in a premier location in a premier city, for example, Sydney, Tokyo, Paris.

· Grand – bigger, more theatrical, grand entrance, grand ballroom, lots of activity and energy, lots of restaurants, a centre of social activity and community.

· Regency – big or small, more functional, simpler than the Grand, good solid product. Found in both gateways and secondary cities, more widespread.

“Because the challenge of marketing a resort is very different to that of marketing a city hotel. Planning for a resort takes two to three years out in the wholesaler market but in a city hotel, you can open much faster. With Beijing, we opened in six months, that would be impossible with a resort,” said Carder.

Of the brands, Grand is the most dominant in Asia. Its newest Grand opened in Tokyo this month and Dubai saw a Grand opening last month.

Carder said Hyatt hotels could be distinguished by two key factors – a sense of community (“you know you are in Tokyo when you are at the Grand Hyatt Tokyo”) and a passion for food & beverage.

“That passion runs very deep and powerful. It is not just about restaurants but the whole role of food and drink in delivering experiences.

Caterer.com - Bosses at Le Méridien are to present a rescue plan to the hotel chain's bankers next month after spiralling debts forced investors to hand over control of the group to its lenders.

The move last week came after a collapse in trading left Le Méridien with a value of just £700m and debts of £1b.

Le Méridien was bought from Compass two years ago for £1.9b in a deal masterminded by former Nomura financier Guy Hands. Investors including the Royal Bank of Scotland, Japanese bank Nomura, Abbey National and venture capital firm Alchemy Partners have lost their investment.

The company has sold a number of hotels recently, including three hotels in the UK for £45m and the Ritz hotel in Madrid, Spain, for £85m. Although the current environment is not perfect for selling hotels, Le Méridien is likely to sell more hotels whenever the opportunity arises.

Le Méridien is also in the midst of a massive renovation of many of its hotels, installing state-of-the-art Art & Tech rooms. Much of the work has been done, but it is unclear what will happen with the remainder of the work.

FVW - German-American joint venture Arabella Sheraton is interested in buying Steigenberger Hotels. Industry sources confirmed to FVW that the Munich-based group was ready to pay EUR 150 million for the Steigenberger hotel operating company. This manages 78 properties, mostly in Germany, operating under the Steigenberger, Maxx, Esprix and Intercity brands. The buildings themselves would remain in the ownership of the Steigenberger family. The interest of Arabella Sheraton, headed by property magnate Stefan Schörghuber, follows long-running industry speculation that the Steigenberger family was prepared to sell its renowned hotel chain.

Australian travellers will have access to an influx of domestic and international travel specials, as suppliers strive to overcome the ongoing effects of the SARS virus.

Australia’s leading last-minute accommodation service, Wotif.com, suggests accommodation discounts in excess of 50 per cent will be available over the coming months, as suppliers aim to fill rooms left unsold as a result of the dramatic drop in international travel.

Domestic flight providers moved early, with QANTAS’ ‘Massive Million Seat Sale’ and Virgin Blue’s ‘Out of the Blue sale’ offering millions of post-Easter seats at discounts of up to 45 per cent on popular domestic routes.

Accommodation providers are now following suit, posting deep accommodation discounts on the Wotif.com website for stays throughout Australia and over 20 other countries worldwide.

According to Wotif.com CEO and founder, Graeme Wood, accommodation and flight providers are offering rock-bottom prices in an effort to turn increasing consumer interest into bookings.

“There’s no doubt the travel bug is biting. Customers who have been playing the waiting game or holidaying close to home are eager to take their long-awaited trips,” says Wood.

“Customers are snapping up deals within minutes of them appearing on Wotif.com, which suggests there are a lot of hungry travellers out there who are willing to go if the price is right.”

All indications suggest even greater discounts are on the way, as SARS continues to hamper the Australian tourism industry and limit travel opportunities in the East.

“Some hotels in Asia are running at as low as 10 per cent occupancy and are desperate to fill hotel rooms at almost any price,” says Wood.

“But this is just the beginning. The deals that follow the alleviation of SARS will be like nothing we’ve seen before.”

Global Finance readers select Shangri-La as the best hotel chain in Asia/Pacific

Shangri-La Hotels and Resorts was named the "Best Hotel Chain in Asia/Pacific" for the second year in a row by readers of Global Finance.

Makati Shangri-La Hotel, Manila; the Shangri-La Hotel, Kuala Lumpur; and Pudong Shangri-La, Shanghai also garnered honors, each winning "Best Hotel" in their respective cities for the quality of their facilities and exemplary service. The award, part of the magazine's "World's Best Hotels and Airlines" survey, appears in the June issue of the publication.

Global Finance has a readership in more than 160 countries of 285,000 chairmen, presidents, chief executives, financial officers and treasurers, who make strategic business decisions for large global companies and financial institutions. The magazine's travel preferences survey of the "World's Best Hotels and Airlines" was conducted by e-mail among a sample of 10,000 of their readers.

Shangri-La Hotels and Resorts is the largest Asian-based luxury Hotel company in the region with almost 20,000 rooms and 39 hotels located in the Chinese mainland, Fiji, Hong Kong, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Taiwan and Thailand.

For more information visit www.shangri-la.com

Spanish hotel chain Sol Meliá is open for strategic alliances to expand its presence in the European market, according to CEO Sebastián Escarrer. The family-owned, listed company, number three in Europe, was particularly interested in new locations in major cities and in improving its position in Germany, France and Britain, he told FVW in an exclusive interview. "We will increasingly concentrate on strategic alliances in important markets as well as in regions where we need to catch up," he said.

Sol Meliá, with 350 properties under the Meliá, Tryp, Sol and Paradisus Resorts brands, saw net profits drop 12% to EUR53 million last year on turnover of EUR 1 billion. Escarrer, son of company founder Gabriel Escarrer, said the group would also increase its direct marketing efforts by enabling internet bookings for its properties, creating joint programmes with airlines and also through its new operator Meliá Viajes. Escarrer forecast that 2003 would be a difficult year in Europe but stressed bookings for Caribbean properties were increasing both from the North American and German markets.

Summary: Maritim Adventures - The Cream From Devon And Guernsey - Ritz Cracker - There's No Hiding From Kempinski - Marriott's On Fire - Less CHI For CHE - New Name, Old Woes - Raffles Held By War - Introducing A New Species: EuroTulip - Up The Palace - The Case Of The Hotel Transaction - Signing On - Make Your Stay In Estonia A Unique One - A Liking For Lithuania - Oil And Water - Dublin Demolition

Maritim Adventures

Germany's Maritim Hotels is to have a second hotel in Berlin, one which will be able to cater for more than 5,000 conference delegates when it opens in summer 2005. SEB Immobilien-Investment is to inject some €170 million into the construction of the 505-room, four-star-plus hotel, which Essen-based real estate company Viterra Development will start building this month. The new property will be a companion for the Maritim proArte Hotel, which is itself capable of housing more than 1,500 delegates.

The Cream From Devon And Guernsey

Von Essen Hotels has brought its property portfolio to nine with the acquisition, for an undisclosed sum, of the privately owned Lewtrenchard Manor, which is located near Okehampton in Devon. The company, which is also eyeing two properties in Scotland and two in the Lake District, now plans to open up seven rooms at its latest purchase to take the room count to 16. In another sale concluded in Devon, Torbay Hotels paid an undisclosed sum for the privately owned three-star Lincombe Hall Hotel in Torquay. The 44-room property had an asking price of £1.5 million. Out in the English Channel, meanwhile, CI Traders is to spend £20 million on its St Pierre Park Hotel in St Peter Port on Guernsey to not only give the Channel Islands its first five-star hotel but also to enhance the company's chances of securing Guernsey's first casino licence.

Ritz Cracker

Orient-Express Hotels has confirmed last month's press rumours by paying €125 million for the Hotel Ritz in Madrid. The company, which will manage the 167-room property under a long-term contract, entered into a joint venture with Spanish investment firm Omega Capital for the purpose. The partners will now make €25 million worth of improvements to their new purchase. Elsewhere in Spain, a group of German investors is to start work next year on the construction of a 38-room hotel in Ujué in Spain's northern Navarre region. The investors will carry out the work on the €4.8 million property, which is due to open in April 2005, under a joint venture with Sodena, the regional government's own venture capital company. Down in the south of the country, meanwhile, NH Hoteles has opened its third hotel in Marbella, the €24 million 199-room, five-star NH Alanda. Southern Spain is also the target of Velada Hoteles, which is looking to open two tourist complexes, bearing a total of 305 luxury apartments, in Estepona. The money spent on these two projects, a reported €75 million, adds to the €27 million Velada has spent on the 258-room Hotel Velada Madrid, which opened this month.

There's No Hiding From Kempinski

For what will be hotel number 13 in Germany, Kempinski Hotels & Resorts has journeyed to the eastern region of Harz, where it will convert a former nursing home into the Kempinski Resort Hotel Albrechtshaus Harz-Magdeburg. The 150-room property is due to open in 2005. These are busy times for Kempinski, which has also enhanced or refurbished four of its existing properties. The Le Mirador Kempinski on Mont Pèlerin, on which the company signed a management contract in January, now has Switzerland's first Givenchy spa, while the Hotel Adlon Kempinski in Berlin has opened the Adlon Palais conference facility. The Kempinski Hotel Corvinus in Budapest has emerged refreshed from a two-year, €6 million renovation, and the Kempinski Hotel Taschenbergpalais in Dresden has reopened after work to repair flood damage. Kempinski has also found time for a trip to Mali in West Africa, where the fivestar Kempinski El Farouk - Bamako will open this summer. The 90-room property will be the company's third hotel in Africa.

Marriott's On Fire

Despite the war in Iraq and the weakness of the global economy, Marriott International has enjoyed a good start to the year, seeing net income from continuing operations for the first quarter ending 28 March rise 6% to US$87 million. For this performance the company could thank its hotels outside the USA, which saw RevPAR 6.8% ahead on last year's comparable period. This figure contrasted with the 4.1% decline in RevPAR (calculated for three months ending 31 March) across Marriott's operated hotels in the USA. With the onset of Sars adding to the current troubles of the world, the best Marriott can predict at the moment is that second-quarter RevPAR at comparable managed hotels in the USA will be 4% lower than it was a year ago and that total profits from its hotels worldwide in the second quarter will also be down, at between US$180 million and US$190 million.

Less CHI For CHE

An anonymous group of five private investors has paid Choice Hotels Europe (CHE Group) more than €1.3 million for a 25% stake in Choice Hotels Ireland (CHI). CHI currently has 22 Irish hotels in its portfolio, although, according to CHI's Managing Director Frankie Whelehan, the new investors are more interested in financing the expansion of the company across the water in the UK using CHE Group's existing structure. Mr Whelehan noted that the cities of Bristol, Manchester, Glasgow and London were of particular interest.

New Name, Old Woes

The freshly minted InterContinental Hotels Group (IHG) has held a mirror up to its former self and grimaced at the reflection. A combination of war in Iraq and the continued weakness of the global economy conspired to make miserable the three months to 31 March 2003, the final three full months in the life of Six Continents. IHG noted that profits were substantially lower than they were over the corresponding period a year ago, with hotels in the Europe, Middle East and Africa (EMEA) region bearing the brunt. The reality of US travellers preferring to stay on home soil was neatly illustrated by the RevPAR figures for the month of March: down 9.6% at owned and leased InterContinental hotels in EMEA, but ahead 3.7% across the same hotels in the USA. IHG drew some consolation from seeing good progress made in its cost reduction programme - savings of at least £25 million are anticipated for the year to 31 December 2003 - and from the reopening of the InterContinental Le Grand Hotel Paris after its 18-month renovation.

Raffles Held By War

The new preoccupations of many hoteliers - the war in Iraq and the spread of the Sars virus - are perhaps weighing heaviest at the moment on Raffles Holdings. The fingermarks of these twin problems were left all over the results posted by the Singaporean company for its first quarter ending 31 March. Raffles, which numbers the Swissôtel portfolio among its possessions, saw net profit fall 94.2% to US$141,000, although it should be noted that last year's comparable was boosted by exceptional items. Turnover, however, rose by 2% to US$53.2 million. Problems now and problems ahead for Raffles' recently installed President and Chief Executive Jennie Chua to contend with; the company can see no salvation in the second quarter and already expects that its performance for this year will be worse than it was last.

Introducing A New Species: EuroTulip Golden

Tulip Hospitality, the parent company of Golden Tulip Hotels, has taken a 20% stake in EuroTulip Hospitality Management, a new company that will, in its first venture, take over the leases on six former Euroase hotels in the Netherlands. Of the properties, four fly the Golden Tulip flag and two the Tulip Inn, and all six hotels, which together total 557 rooms, are owned by Hooge Raedt Group, which takes a 30% holding in EuroTulip. Also taking a 30% stake is AHM Hotel Group, which is hoping to use the new company as a vehicle forits plans to expand its current portfolio of 14 hotels.

Up The Palace

Hungarian property developer Gresco will be celebrating the fruits of its US$120 million investment later this year when the Four Seasons Hotel Gresham Palace opens in Budapest. The 179-room property will be Four Seasons' first hotel in Hungary. Elsewhere in the country, a 200-room hotel will feature as part of a US$66.3 million thermal complex to be built near the northeastern town of Egerszalók by the Szalók Holding Company.

The Case Of The Hotel Transaction

Private property company Golfrate has paid Lydford Estates £12.6 million for the freehold interest in the 119-room Sherlock Holmes Hotel. The four-star lifestyle hotel stands, appropriately enough, on Baker Street in central London. Elsewhere in the capital, the Crown Estate will apply for permission this October to proceed with The Quadrant, a mixed-use development, to include hotel space, which will cover an area centred on Regent Street. The plan, part of the Crown Estate's £500 million redevelopment strategy for the area over the next ten years, will also encompass work on the existing Regent Palace Hotel.

Signing On

When it was younger and had the operation of conference centres as its primary care, First! Venues could be satisfied with its name. But now with two hotels in the West Midlands to look after and a third on the way, its outlook has changed and so has the company name; to emphasise the hotel aspect of its operations, First! Venues will henceforth be known as the Signature Hotel Group. Elsewhere in the Midlands, developer Wilson Bowden has won its longrunning battle to redevelop the Grade II listed Regent Hotel in Leamington Spa, while in nearby Rugby unnamed developers are negotiating with the local council for permission to build a hotel of at least 120 rooms in the town centre. And if you are into leather, then head for Walsall, where developers are planning to build a hotel fitted throughout with the material.

Make Your Stay In Estonia A Unique One

UniqueStay may not want its name to change but it certainly intends that its first hotel, in the Estonian capital Tallinn, will not remain unique for long, as the company plots to expand the brand, and a superior brand called BoutiqueStay, throughout the Baltic region. Indeed, this initial 17-room, three-star hotel will have a second for company by the end of 2003, with a third UniqueStay set to open next year in the Latvian capital Riga. According to UniqueStay director David Heir, Lithuania will be the next country to be targeted.

A Liking For Lithuania

According to its Senior Vice President and Chief Operating Officer Marcus Bernhardt, Radisson SAS Hotels is considering doubling its Lithuanian hotel portfolio to four. He has suggested that one of the two new hotels might take the Radisson SAS brand, with the other being part of parent company Rezidor SAS Hospitality's ongoing push to widen Europe's exposure to the Park Inn brand. In nearby Estonia, meanwhile, the Reval Hotel Group has reopened the 397-room Reval Hotel Olümpia in Tallinn after its US$2.3 million, three-month renovation.

Oil And Water

Oil companies from the autonomous region of Khanty-Mansiysk in western Siberia are to finance the development of a hotel on a man-made island to be built in the Black Sea. The Yugra resort, in which representatives of the Krasnodar Territory also have an interest, will cost a reported US$128 million. If guests tire of the island then they may like to journey across the sea to the Bulgarian shore and stay at a four-star hotel being built at the Riviera resort by local developer Glavbolgarstroy. The hotel, which can hold up to 350 people, is due to open next summer. Further inland, fellow construction company Anel 98 expects to finish work on the four-star Anel Hotel in Sofia this September. According to reports, the 50-room property, in which Anel 98 has invested more than US$1 million, might be operated by Accor.

Dublin Demolition

The Fitzwilliam Hotel Group (FHG) has been given permission to wield the sledgehammer and demolish and rebuild the façade of its Royal Dublin Hotel. In addition to a facelift, the 120-room property will be extended, work that will add another 31 rooms. The group might also add a fifth hotel to its collection by converting a former Aer Lingus booking office that stands next to the Royal Dublin Hotel. FHG purchased the office last year for some €1.9 million. Meanwhile, across the border in Northern Ireland, a building that formerly housed First Trust Bank in the town of Dungannon looks set to be converted into a hotel after planning permission was granted.

Caterer.com - BIL International, hotel group Thistle’s largest shareholder, has increased its bid for the company by £72.4m.

BIL, which already owns 46% of Thistle, is now offering £627.1m for the remaining shares of the beleaguered hotel group. In March, BIL offered £554.7m for the company.

Arun Amarsi, chief executive of BIL, said: “Our all-cash offer represents certain value today for Thistle shareholders, compared with the risk of retaining an investment in Thistle with its historic underperformance, compounded by a deteriorating competitive environment against a backdrop of increased geopolitical risk and economic uncertainty.”

BIL has only managed to secure less than 0.5% of Thistle’s shares since launching the bid.

Thistle said it had noted BIL’s announcement and was consulting with its advisers to consider its response and would make an announcement shortly

FVW - Club hotels have still got good potential for future growth in both the premium and mass market segments, according to top hotel managers. New trends, quality services and value for money will be the keys to success, they predicted in an FVW special discussion.

The German market for club holidays has a total potential of 4.5 million clients, including 1.5 million in the premium segment, said Karl Pojer, managing director of the TUI-owned Robinson chain. Last year some 1.2 million clients booked a club holiday, including 400,000 in the premium segment. "There is massive potential above all in the medium-market segment. When each of us stays in his segment, then everyone has enormous growth opportunities," he told fellow managers.

Club holidays are now complex holiday experiences ranging from all-inclusive to sport and wellness activities. But prejudices still remain among consumers, said Petra Sikorsky, managing director of Thomas Cook-owned Aldiana. "Lots of people still connect club holidays with animateurs pulling people out of their deckchairs and forcing them to join in the activities," she commented. Another factor is that resort hotels are offering more and more activities and thus approaching the club product range. "The normal resort hotels are adapting more and more to club hotels and are offering ever more entertainment, sport or wellness. The difference lies in quality. These days any hotel with two baths calls itself a wellness hotel," agreed Pojer. He said that he saw the market as divided into the "big brands" Robinson, Aldiana and Club Med and the mass of other hotels.

But Michael Musehold, sales director of Alltours, which operates the Club Alltoura brand, stressed: "In terms of quality, a Club Alltoura is by no means worse than a Robinson." Ralf Horter, managing director of 1-2-Fly, the TUI budget brand, added that the operator's Fun Clubs were clearly "in the C class" targeting extremely price-conscious families. "We don?t have to be in the front row and we pass this on to our clients." He defined a holiday club as one with a "comprehensive concept independent of the location"

The various holiday clubs also have differing strategies for all-inclusive offers. Aldiana, for example, charges guests extra for sports. "Not everyone plays all kind of sport. Therefore guests only pay for what they use," said Sikorsky. But Robinson chief Pojer countered: "I cannot tell our clients to pay for a tennis court and floodlights. Our sports range is included in the price." And Club Med's Georges added: "It would be unthinkable for Club Med not to offer sport all-inclusive." 80-90% of the French group's clients used some kind of sports facility compared to "40-50% in other clubs" he said.

The two top factors for the future were location and new trends, said Sikorsky. "That includes not only new types of sport but also lifestyle or nutrition trends. You always have to be ahead of customer expectations." Pojer added: "The trend is continuing towards wellness. Another trend is entertainment instead of animation: the whole club is the stage." In line with the trend towards higher-value club holidays, Club Med was expanding its top range with new wellness centres or business and reducing its simpler club locations, commented Eric Georges, director for Germany, Austria and Eastern Europe.

Difficult search for new locations

In terms of locations, Sikorsky said the search for new locations was getting more difficult and the company was thus taking over existing properties. Pojer said his priority was profitability rather than the number of locations. "In our portfolio are only locations which earn money. A location that does not do this does not come into the portfolio or will be disposed of."

Long-haul locations had the additional problem that they could not be filled by one operator or source market alone. "If we filled our hotels with guests from other markets, we would have problems with our German clients. Our clients expect a German product and German guests." Similarly, Robinson had 80-85% German clients, noted Pojer. "In general, in clubs everything that exceeds 25% can be a disturbance for the customer structure."

(netimperative) - Hotel bookings website All-Hotels.com claims to have bucked the trend of falling room rates, while recording a 50% year-on-year bookings rise between March and April despite tough market conditions.

The company, part of UK travel group Online Travel Corp, recorded an average London room rate during the period of £107, which it said contrasts to the recent trend of falling revenues in the capital, with average room rates during March costing £88 according to a survey from hotel consultant PKF.

All-Hotels.com also said it booked 15,987 room nights between 17 March and 17 April 2003, compared with 11,354 during the same period in 2002.

The announcement is welcome news to the online travel industry, which continues to be affected by world events, including the war in Iraq and the spread of the SARS virus.

All-Hotels said it was attracting more last minute customers, with one in five users booking hotel rooms during the period within three days of their trips.

FVW - The German tourism industry hopes the end of armed hostilities in Iraq will generate a recovery in the poor summer 2003 sales to date. Business in March, however, suffered from tension in the Middle East region followed by the outbreak of war, according to the latest monthly survey of some 1,780 German travel agencies by the TATS organisation. Leisure travel sales slumped 27.6%, airline ticket revenues dropped 19.6%, leaving overall turnover down 22.2%. These heavy declines were on previous year levels which themselves represented sharp declines on 2001. The cumulated values for the first quarter of 2003 showed overall turnover down 10.5%, including a 13% fall in tourism sales and 8.5% drop in airline ticket revenues.

Newsletter - May 2, 2003