Middle East & Africa:  2002 – A challenging but encouraging year

Released today at the Arabian Travel Market (ATM), Deloitte & Touche’s annual review of hotel performance throughout the Middle East & Africa indicates 2002 was a challenging year for the hotel industry across the region still reeling from the recession of 2001 and the changing travel patterns following the events of September 11.  For the full year of 2002, Middle East hotels across the region reported an average increase in revPAR of 5.2% over 2001 levels.  

A 5.5% increase in occupancy was offset by a 0.3% fall in average room rates, as hoteliers sought to discount rates to stimulate demand in these tough trading conditions.  The trend in North Africa was somewhat different, with overall revPAR declining 3.3% over 2001 levels.  Despite a 5.1% increase in occupancy, average room rates fell 8% as hoteliers discounted rates in order to stimulate demand.

According to the HotelBenchmark Survey most countries within the Middle East managed to improve revPAR during 2002 with four markets reporting double-digit growth. Of the 28 markets monitored on the survey nearly 60% managed to improve revPAR during these difficult times.  Kuwait and Beirut were the regions star performers reporting increases in revPAR of over 19%.  Bahrain and Riyadh also reported double-digit revPAR growth of 10%.  The increase in revPAR was generally driven by a growth in occupancy rather than an improvement in average rate. 

Hotels on Jumeirah Beach Dubai enjoyed the highest revPAR in the region for a fourth year in succession at US$121, up 8.5%.  Occupancy levels have recovered to 2000 levels although the average rate is still under pressure with rates an average of US$7 lower than those achieved in 2000.  The absence of any new additions to supply during 2002 helped support the 7.9% recovery in occupancy levels.  Encouragingly, the five-star sector on Jumeirah Beach has consistently increased its performance in terms of revPAR, despite the addition of nearly 1,100 five-star rooms in the last five years.  Hotels in the city centre also experienced strong demand growth during 2002 with occupancy increasing 8.7%.  This performance was all the more encouraging given the addition of the 393-room Fairmont hotel to the market.

Hotels in Egypt came under significant pressure during 2002 with revPAR falling 13.6% in US dollar terms.  Unlike many other Middle Eastern countries the Egyptian Pound is not linked to the US dollar and so exchange rate differentials hampered performance, as in local currency Egyptian hotels managed to curtail the decline in revPAR to just 0.6%.  The performance in Egypt has not recovered since the events of September 11.  Although the occupancies in most markets have been stable, the average rate in US dollar terms has declined as many hotels contracted competitive rates with the European tour operators anticipating reduced visitations in the aftermath of the attacks on the World Trade Centre.  Luxor reported a 21.3% decline in the average rate for 2002 whilst the decline in Cairo was 20.6% and in Hurghada 15.1%.  Although hotels in Sharm el-Sheikh experienced a fall in average room rate of 14.5%, this was offset by a 22.4% improvement in occupancy, so leaving the city with positive revPAR growth for the year.

Commenting on the results, Julia Felton, director of travel, tourism and leisure at Deloitte & Touche said, “Given the tough trading conditions during 2002 - with the three major global economies spluttering and the consequences of the US corporate accounting scandals, the industry had much to focus on in the early part of the year.  Despite an overall 10.6% increase in international tourism arrivals to the region during 2002, the industry had to adapt to changing demand patterns as corporate demand dwindled and was replaced by lower-rated leisure demand.  This put average room rates under pressure as hoteliers sought to adjust to this shift in business mix.  The first three months of 2003 have also been tough with revPAR falling 22.9% in March as many travellers opted to defer travel plans until a resolution in Iraq was evident.  We are however, hopeful for the longer-term prospects in the region as many governments seek to diversify their primarily oil-based economies by developing their tourism products.  This in turn should increase the profitability of hotels in the region, provided that supply growth does not exceed the expected increase in demand.

Performance of the selected Middle East markets 2002

Source: HotelBenchmark Survey by Deloitte & Touche

Copies of the HotelBenchmark Survey Annual Review – Middle East 2003 are priced at £250 per copy and are available by e-mailing us at HotelBenchmark@deloitte.co.uk or telephoning us on +44 20 7007 3974.

The HotelBenchmark Survey contains the largest independent source of hotel performance data outside of North America and tracks the performance of over 6,000 hotels. The HotelBenchmark Survey – Middle East & Africa collects occupancy and average room rate data from over 400 hotels representing nearly 90,000 rooms every month, making it largest independently run hotel performance survey in the region. For further information or details on how to join the survey please visit us www.HotelBenchmark.com or contact Lorna Clarke on +44 207 438 2870.

Deloitte Touche Tohmatsu is one of the world’s leading professional services organizations. The member firms of Deloitte Touche Tohmatsu deliver world-class assurance and advisory, tax, and consulting services. With more than 119,000 people in over 140 countries, the member firms serve over one-half of the world’s largest companies, as well as large national enterprises, public institutions, and successful, fast-growing global growth companies. Our internationally experienced professionals strive to deliver seamless, consistent services wherever our clients operate. Our mission is to help our clients and our people excel.

Deloitte Touche Tohmatsu is a Swiss Verein, and each of its national practices is a separate and independent legal entity.

The dedicated Travel, Tourism, and Leisure practice serves owners, investors, operators and developers throughout the world.

Authorised by the Financial Services Authority in respect of regulated activities.  The information contained in this article is correct at the time of going to press. For further information on Deloitte & Touche UK, you can access our website on www.deloitte.co.uk.

For further information, please contact:

Sameer Kazi, Deloitte & Touche (M.E.)
+971 4 3313211
www.deloitte.com  

Charles Gurassa tipped for top Whitbread jo

e-Tid.com -  London Times tips Gurassa for top Whitbread job Charles Gurassa, who is to leave TUI Northern Europe on 1 June, is being tipped as a possible chief executive of leisure group Whitbread.

According to the Times, analysts believe 47-year-old Gurassa would be a strong candidate to succeed current Whitbread chief David Thomas, who is due to retire from the role in 14 months’ time.

Gurassa, already a non-executive director of Whitbread, told the Times: ‘My immediate aim is to enjoy the summer with my kids. I then intend to embark on a portfolio career, with a series of venture capital, non-executive and pro bono roles.’

While declining to comment on the Whitbread position, Gurassa added: ‘My preference is the portfolio route…Obviously if any chief executive opportunities were to come up then I might have a look at them, but it is not my preferred route.’

Gurassa announced yesterday he was leaving TUI, which under its previous guise as Preussag paid £1.8bn in May 2000 for the Thomson Travel Group, where he was chief executive. He is thought to have collected around £3.3m for his share options and bonuses from the takeover.

(Reuters) - Interstate Hotels & Resorts on Tuesday reported a quarterly profit, after a loss a year earlier, helped by a gain from early repayment of a loan, but lowered some forecasts for 2003 due to the weak travel sector.

The company said it earned $4.4 million in the first quarter, or 21 cents per share, compared with a loss of $2.2 million, or 11 cents per share, a year earlier, on a proforma basis, before the company was formed by a merger of MeriStar Hotels and Resorts and Interstate Hotels Corp.

The company said its 2003 net operating income would be $9.7 million to $13.7 million with earnings per share of 14 cents to 26 cents, excluding items. For the second quarter it said its results would range from a loss of 2 cents a share to a profit of 1 cent per share.

The company said it lowered its 2003 guidance for earnings before interest, taxes, depreciation and amortization by 8 percent to $31 million to $35 million.

Hotel chains grew Internet reservations by 75%

According to a new report by TravelClick, Internet reservations received at the central reservation offices for the major chains grew 75% in 2002 over 2001. And big surprise - the increase was driven primarily by the brands' own Web sites.

Despite the impressive growth of the Internet, the report shows that over twice as many reservations come through GDS channels than via Internet sites.

"Electronic channels are the primary source of central reservations office bookings," said Bruce W. Mainzer, senior vice president of marketing for TravelCLICK. "While the Internet channel contribution is growing, hotels still need to focus on the GDS to ensure that they are maximizing ADR and occupancy."

The 33 major chain and brands participating in this survey reported that 13% percent of their total CRO reservations were received from their brand Web site in 2002 (i.e. marriott.com, hilton.com, etc.), while six percent of all reservations were sourced from third-party Internet sites. Less than half, or 42%, of reservations were made via phone to the CROs.

The top ten third-party Web sites for hotel bookings to brand CROs were, in order: Priceline, Expedia, Travelocity, Orbitz (which moved from #7 to #4 since 2001), Lodging.com, TravelNow, Hotwire, WorldRes, TravelHero and USA Hotelguide. Some well-known third-party Web distributors, such as Hotels.com, did not place in the top ten on this list because these sites usually obtain rates and inventory directly from individual properties rather than from a brand or chain CRO.  

Marriott Wins Round in Suit Filed by Hotels in New Orleans

New York Times  -  A judge in New Orleans has declined to issue a temporary restraining order against Marriott International to prevent it from managing a luxury property in the city.

The ruling is a setback for the owners of three nearby luxury hotels that have accused Marriott of competing unfairly. The hotels are managed by Ritz-Carlton, which is owned by Marriott.

Whitehouse Hotel Limited Partnership and a related entity, W. H. Holdings, both of Dallas, filed a lawsuit last month against Marriott and its unit, the Ritz-Carlton Hotel Company L.L.C. They contended that Marriott's management of the former New Orleans Grand Hotel under its luxury J W Marriott flag would financially imperil their own properties, the Maison Orleans, the Ritz-Carlton New Orleans and the Iberville Suites

Last month, Marriott, which is based in Bethesda, Md., began operating the hotel, as the J W Marriott New Orleans.It was known until this year as Le Meridien New Orleans.

The three Whitehouse/W. H. Holding properties are managed by the Ritz-Carlton Hotel Company of Atlanta. Those hotels, as well as the J W Marriott New Orleans, are in or near the French Quarter and the main business district, a highly competitive area for hotels.

Judge Roland L. Belsome of Civil District Court for the Parish of Orleans declined on May 1 to grant the temporary restraining order. A Marriott spokesman, Scott C. Carman, said the company was pleased with the decision. He declined to comment on the lawsuit's accusations of financial mismanagement and deceptive practices.

Lawyers for Whitehouse and W. H. Holdings will soon ask the court to take up those charges, said a lawyer for Whitehouse, William E. Wallace III of Milbank, Tweed, Hadley & McCloy in Washington. He said the lawsuit had added the CNL Hospitality Corporation of Orlando, Fla., as a defendant. CNL bought the J W Marriott New Orleans last month from Lasalle Hotel Properties of Bethesda, and hired Marriott to manage it.

At least four other owners of Marriott-managed hotels have filed lawsuits against Marriott in recent years, accusing it of financial mismanagement or of unfairly opening competing hotels nearby.

Wyndham Reports $107 million 1st Qtr Net Loss,
EBITDA Falls 23% from a Year Earlier 

Wyndham International, Inc. (AMEX:WBR) today reported results for the first quarter ended March 31, 2003.

"The lodging industry is still operating in a difficult environment that has been made even more challenging by world events. The flexibility and focus of our operations created the environment that allowed us to manage through these tough times," stated Fred J.  Kleisner, Wyndham's chairman and chief executive officer. "We will remain nimble to react to changes in our industry and we intend to make the necessary adjustments to our business operating plan in order to continue generating positive cash flow and maintain a financially sound Company."

Company Performance:

On an actual basis, earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted, was $87.9 million for the three months ending March 31, 2003 versus $114.3 million for the same period in 2002, an increase from the original guidance of $82.0 million to $87.0 million, based on market share gains and strong operating margins. On a pro forma basis, EBITDA, as adjusted, was $87.0 million compared to $99.6 million for the same quarter last year. Wyndham reported a net loss of $107.4 million and a pro forma net loss of $20.6 million for the first quarter, versus a $343.2 million net loss and an $18.7 million pro forma net loss for the same period in 2002. After the effect of the Company's preferred dividend, this resulted in a net loss of $0.87 per share and a pro forma net loss per share of $0.35 for the quarter.

Total Company comparable owned and leased revenue per available room (RevPAR) was $78.03, a decline of 2.0 percent versus the same period in 2002. This decline was comprised of a 6.8 percent decline in average daily rate and a 3.2 percentage point decline in occupancy.

Branded Performance:

The performance of the comparable Wyndham branded owned and leased properties continues to outperform our non-Wyndham branded properties, posting a RevPAR of $88.27, a decline of 0.8 percent versus the first quarter 2002. The results are comprised of a 4.6 percentage point increase in occupancy and a 7.2 percent decline in average daily rate.

Wyndham branded owned and leased properties ended the quarter with a RevPAR penetration index of 101.7 percent, a 360 basis point improvement over the same period last year.

"Given the fact that the first quarter 2002 benefited from pent-up demand from the fourth quarter 2001, we are particularly pleased with how well the Wyndham branded properties performed. Our strategy of continuing to build occupancy and our brand loyal customer base has been a contributing factor in achieving these results," added Kleisner.

Financial Highlights:

At the end of the first quarter, liquidity was approximately $273.0 million. The Company defines liquidity as revolver availability, plus cash in our overnight investment account. As of March 31, 2003, cash and equivalents were $223.1 million inclusive of $146.2 million of restricted cash. Cash and equivalents increased by $42.0 million from the $181.0 million on hand at the end of 2002 due primarily to cash generated from operations and asset sales.

The Company's total debt was $2.8 billion as of March 31, 2003, approximately the same as the end of 2002. The breakdown of the debt at quarter-end was as follows: Revolver $171.4 million; IRL's $447.7 million; Term Loans $1.175 billion; and Mortgage and other indebtedness $1.034 billion.

Said Mr. Kleisner: "We have continued to maintain strong liquidity, overcoming the obstacles the industry has endured over the past year and a half. As we have done in the past, we will continue to manage cash very tightly and make prudent spending decisions given the current economic conditions."

Wyndham is currently in the process of refinancing its 2003 and 2004 mortgage pool maturities and extending the maturity dates by five years. The debt maturities coming due include the $146 million Lehman I pool and the Bear Stearns pool currently at $126 million, maturing in June 2003 and July 2004, respectively. Additionally, four property-specific mortgages totaling $77 million will mature in 2004. The Company fully expects to refinance or extend all remaining 2003 and 2004 maturities.

Future Guidance:

For the second quarter 2003, RevPAR is forecasted to be negative 2.0 to 4.0 percent versus the same period last year and EBITDA, as adjusted, is forecasted to be between $75.0 million and $80.0 million. As stated during the 2002 year-end earnings call, original EBITDA guidance for the full year 2003 was $300.0 million to $305.0 million. Given the effect of asset sales, the guidance for the full year 2003 EBITDA is being adjusted to $290.0 million to $300.0 million. Full year 2003 RevPAR is estimated to be negative 1.0 to 2.0 percent versus full year 2002.

Operating Strategy:

Wyndham maintained its consistent management of expenses to counteract the margin compression associated with revenue growth through occupancy gains. The Company reduced operating expenses and corporate expenses in order to mitigate the increases in fixed costs. Increased fixed costs included property insurance, health insurance and property taxes.

Wyndham was prepared, and when necessary, implemented the "war plans" to neutralize the impact on operations associated with Operation Iraqi Freedom. Since the war began in mid-March, Wyndham had only $7.2 million of cancelled group business, of which, 54 percent rebooked.

Disposition and Development:

Wyndham remains committed to its business plan focused on growing the Wyndham brand, through new franchise and management agreements, as well as to dispose of all non-strategic assets.

"Since June 1999 when we re-capitalized the Company, Wyndham's vision has been very clear: sell all non-strategic assets to reduce debt, and focus on our proprietary brand to build a differentiated hotel experience," stated Kleisner. "With over $1.5 billion in asset sales complete and the Wyndham brand continuing to gain market share due to its award-winning, personalized service approach, we believe our strategy is successful and well positions us for better economic conditions."

Wyndham recently sold, or is in the process of selling, approximately $97 million in assets. Terms of the transactions were not disclosed and the net proceeds from the sales were, or will be, used to pay down debt. The assets include:

• Eight (8) Wyndham Garden Hotels. The properties, located in Charlotte, N.C.; Brookfield, Wis.; Novi, Mich.; Dallas; Pleasanton, Calif., Wood Dale and Schaumberg, both in Ill.; and Overland Park, Kan., retain the Wyndham flag through a new franchise agreement, operated by Aimbridge Hospitality.
• The Bourbon Orleans - A Wyndham Historic Hotel in New Orleans. The property remains in the Wyndham portfolio pursuant to a  20-year management agreement and will undergo an $11 million renovation.
• Marriott Hutchinson Island Beach Resort & Marina in Stuart, Fla.
• Twenty-two acres of excess land located at the Wyndham-owned Boulders Resort & Golden Door(R) Spa in Carefree, Ariz.
• Meadows del Mar, an 18-hole golf course and hotel/timeshare development site. Wyndham sold its 50 percent interest.

The Company has continued its strategic growth path to expand the Wyndham brand through new management and franchise agreements. A joint venture between a wholly owned subsidiary of Wyndham International closed on the construction loan for the next phase of Las Casitas Village-A Wyndham Luxury Resort, the only five-diamond Caribbean resort in Puerto Rico. Additionally, Wyndham has entered into an agreement with Cinnamon Hill Club Limited to provide resort amenities and services to a soon-to-be-built equity membership and real estate ownership community, Cinnamon Hill at Rose Hall. The new community will be built on land adjacent to the Wyndham Rose Hall Resort & Country Club in Jamaica.

The brand recently gained three new Wyndham franchise or management agreements, including the Wyndham Phoenix, the Wyndham Martineau Bay Resort & Spa in Vieques, P.R., and the Wyndham Louisville International Airport in Kentucky.

A subsidiary of Wyndham International announced on April 28, the lease termination of 15 Summerfield Suites(R) by Wyndham properties by Hospitality Properties Trust (HPT). Wyndham is still in negotiations on the final franchise agreement of the 15 Summerfield properties and on the outcome or 12 Wyndham Hotels and Garden Hotels. The financial impact of the lease terminations represents an improvement to the subsidiaries' cash flow on an annualized basis of approximately $14.3 million. The terminations also result in a non-cash write-off of approximately $150 million for the leases' remaining book value, of which $104.3 million was written-off in the first quarter 2003 and the remainder will be written-off in the second quarter 2003.

Wyndham Brand:

The Wyndham brand continued strong performance and gained in market share each month during the first quarter 2003, led by Wyndham ByRequest, which continues to be the driver that defines the brand and builds customer loyalty. Membership grew to approximately 1.4 million active members with year end goals to reach 1.7 million members. The Wyndham ByRequest free long distance call offer continues to be a compelling point of differentiation to the premium business traveler as well as a powerful booking tool with corporate travel accounts.

Reservations at the Company's central reservations office were up year-over-year despite the impact of Operation Iraqi Freedom on the travel industry. The brand's proprietary website, www.wyndham.com, experienced record bookings - doubling its bookings year-over-year. Importantly, the room rates for these online bookings are up almost $7.00 year-over-year. The upward trend can be attributed to Wyndham WebRates(R), that was expanded to seven days a week at all properties. The company continues to aggressively manage the online market place in order to ensure proper price positioning of its room inventory.

Moving forward into second and third quarters, Wyndham is building off of the ByRequest momentum with the launch of a summer and fall promotion with Nickelodeon as well as the start of a Kids ByRequest program geared around giving a personalized guest experience to children.

This summer, Wyndham Resorts teams up with the number one kids' show on television, Nickelodeon's SpongeBob SquarePants(TM), to offer families the SpongeBob Splash Party Package, available May 30 through Labor Day at nine participating Wyndham Resort properties throughout the Caribbean and Florida. After Labor Day, a new promotion, SpongeBob Sleepover Package, will be offered on weekends at all Wyndham Hotels & Resorts properties. The Nickelodeon partnership and this fall's launch of Kids ByRequest allows Wyndham to positively position itself to the leisure traveler, which continues to be a strong market for the travel industry  

ATM 2003: 5.16pc growth in Dubai hotel guests

Gulf News  -  The number of hotel establishment guests in Dubai registered an increase of 5.16 per cent during the first quarter of this year, compared with the corresponding quarter last year, according to the Depart-ment of Tourism and Com-merce Marketing (DTCM).

The number of hotel establishment guests during the first quarter of this year rose to 1,263,128 compared with last year's 1,201,200. Statistics for hotel establishments for 2002 established that Dubai has the highest tourism growth in the world.

According to a report published by the World Tourism Organisation, Dubai registered more than a 30 per cent strong rebound in terms of international tourist arrivals and occupied the top place in the most frequently visited destinations.

The report places Hong Kong, France, Turkey, Bel-gium, China and Germany behind in terms of visitor inflow.

Mohammed Khamis bin Hareb, DTCM director, Operations and Marketing, said that this increase is laudable considering the fact that during the last few months, tourism in the Middle East as well as all over the world suffered a setback.

"To come out with a positive figure during this period is a great achievement and Dubai has done it again by cruising ahead," said bin Hareb.

He stated that Dubai's marketing strategy is focused and in line with current developments and can face any challenge.

"We have formulated our marketing plans in a flexible manner and can be manoeuvred as per circumstances and varied situations," he said.

Bin Hareb noted that besides being one of the most frequented destinations, Dubai is also one of the safest places in the world.

"The fact that the visitors kept coming to Dubai speaks about the safety standards of Dubai. The emirate caters to the requirements of visitors from all the corners of the world. Dubai's state-of-the art infrastructure and facilities as well as the varied activities it offers are hard to find in any other place," he said.

IHG in talks to sell £130m May Fair Hotel

Times Online  -  The newly demerged hotel arm of Six Continents, InterContinental Hotels Group (IHG), is in talks to sell the luxury May Fair InterContinental in London’s West End to a consortium of investors including Cola Holdings.

The hotel, worth an estimated £130 million, was put up for sale last year by IHG after it received a number of unsolicited approaches. It decided to put a planned £60 million refurbishment of the 289-room hotel on hold while it investigated a possible sale.

Cola Holdings, a family-run business controlled by Bakir Cola, owns several London hotels including the Westbury in Mayfair, Harrington Hall in Kensington and Kingsway Hall just off the Strand. It also owns the De Vere Park in Kensington and in October last year bought another hotel from IHG, the 550-room Kensington Posthouse, for £70 million.

As with the Posthouse, Cola is believed to be planning to redevelop at least part of the freehold May Fair InterContinental site as luxury flats. There are suggestions that it may create a boutique hotel and some offices as part of the redevelopment.

One City source suggested that the Abu Dhabi Investment Authority (Adia) has also been looking at the May Fair, possibly as part of the Cola consortium. The Adia already owns the five-star Lanesborough hotel on nearby Hyde Park Corner which it took off the market last year after failing to find a buyer at the mooted £120 million asking price.

IHG is preparing to conduct what its chief executive, Richard North, described as an “asset by asset review” of the hotels, where the group has an equity involvement as part of a strategic shake-up initiated ahead of last month’s demerger. Mr North said this could result in further disposals.

A spokesman for IHG said: “The position on the May Fair is still under review. We continue to review all our options and will make an announcement in due course.”

Le Méridien pushes ahead with regional expansion

New hotels in Kuwait, Dubai, Abu Dhabi and Tashkent

With several major hotel projects underway, and more in the pipeline, Le Méridien Hotels & Resorts is committed to its expansion strategy in the Middle East and West Asia region where it will double its presence within five years. 

Regional managing director Sami Zoghbi confirmed the green light for projects in the UAE, Kuwait and the CIS, emphasising the potential for growth throughout the region. 

“Whatever problems have emerged in the short-term, we know that this is one of the most dynamic environments for the hospitality sector in the world, and Le Méridien will grow in tandem with the economic development here,” he said. 

The showpiece of the recently announced expansion is a six-project deal in conjunction with Kuwait-based A’Amal Holdings, under which Le Méridien has taken over management of the 75-room Ritz Kuwait Hotel and will supervise an extensive refurbishment of the property. 

Following this refurbishment, the hotel will be rebranded as Le Méridien Kuwait and a second 120-room tower and convention centre will be added to the complex. Two designer Art+Tech hotels will also be constructed in the emirate within two years, as well as a residence tower in Salmiya. 

Meanwhile, Le Méridien will also manage the first hotel on the Dubai Marina, scheduled to open in late 2004, and named Grosvenor House Hotel and Hotel Apartments, West Marina Beach by Le Meridien. 

“Grosvenor House, Dubai will be a landmark in the newest development area of Dubai. This 46-storey tower will offer unrivalled views in this prime leisure and residential project, and we are also looking at other plans for expansion in the city as it continues its headlong growth,” said Zoghbi. 

Meanwhile, the luxury hotel group will introduce its premium Royal brand to the UAE capital later this year when the Abu Dhabi Grand is renamed as Le Royal Méridien Abu Dhabi following a nine-month renovation and expansion programme. 

Zoghbi explained: “Abu Dhabi also offers considerable scope for expansion as the federal capital of the UAE. Le Royal Méridien Abu Dhabi is well placed to exploit its potential with a location on the corniche, which is currently the focus of development as an entertainment, heritage and leisure centre too.” 

The hotel complex will have an additional 120 extra rooms in a second tower, as well as a new lobby and banqueting and conference centre, while a separate entertainment centre will introduce new food and beverage concepts, and an extensive pool and leisure complex is also under construction. 

In addition, the existing tower of the Abu Dhabi Grand will be renovated as part of the overall project, with a final completion date of early 2004. 

In the downtown business district of Dubai, the group will add a second all-suite property, Dar Al Sondos Suites by Le Meridien, to complement its hugely popular Al Sondos Suites by Le Meridien. 

Farther afield, the group has signed an agreement to take over management at the oldest hotel in Tashkent, the capital of Uzbekhistan, relaunching the 256-room property as Le Méridien Tashkent Palace in April. 

Recently been refurbished to five-star standards, the hotel enjoys a prime location on the Broadway opposite the grand opera house, and includes a full range of business and recreation facilities including a rooftop restaurant, jazz bar, large courtyard, health club and pool, ballroom and meeting rooms. 

“A major strategy for Le Meridien has been to pioneer development in both new destinations and new accommodation sectors, and this is amply demonstrated in our recent openings,” said Zoghbi. 

“Not only have we opened an all-suites property in Dubai recently – Al Sondos Suites by Le Meridien – but last year we also launched the first full resort on the east coast of the UAE with Le Méridien Al Aqah Beach Resort.”   

He said the group would continue to explore all avenues for growth with investors in the region’s hospitality sector:  “With the experience of Le Méridien and the buoyancy of the regional economy, it’s a win-win situation for all concerned.” 

Zoghbi confirmed that negotiations are ongoing with regard to new properties in the UAE, Riyadh, Makkah and Doha, plus Trivandrum and Hyderabad in India. 

Jurys warns as conditions remain ‘challenging’

e-Tid.com  -  Irish hotel group Jurys Doyle today warned pre-tax profits in the six months to end-June 2003 would fall short of year-earlier levels.

Speaking at the group’s AGM, chairman Richard Hooper blamed slow economic growth, war in Iraq and the outbreak of SARS for the shortfall.

‘Current economic forecasts for consumer and corporate spending indicate that trading conditions are likely to remain challenging for the immediate future,’ Hooper said. ‘If these business trends continue into the second half of the year, our pre-tax profits, excluding depreciation and profit on disposals, will continue to be adversely affected.’

For the first quarter of 2003, pre-tax profits were ‘slightly ahead’ of the same months of last year, but trading continued to be affected by a combination of weak global economies and geopolitical uncertainty. The two Jurys hotels in Washington DC also had to contend with disruption to business caused by unusually inclement weather during the winter.

Nevertheless, overall occupancy rates in line with the first quarter of 2002 and increased average room rates resulted in improved revenue per available room (revPAR) in each of the group’s divisions in Ireland, the UK and the USA.

Pat McCann, Jurys Doyle chief executive, added the group’s expansion plans, which will see six new properties – four in the UK, one in Dublin and one in Boston – open by the end of 2004, would not be affected by current trading conditions.

Jurys also announced it had appointed Brian Collie, BAA’s group retail director, to its board as non-executive director. Collie, who joined the airport operator in 1992, also holds a non-exec position on the board of lastminute.com.

London Enews May 2 2003 – HVS International

Summary:  No Weed, But Thistle Ultimately Gives In - Whitbread Prizes Go To Travel Inn - Fermenting Change - Hotel Dreams Of Jeanette - Ramada Gets To Work In Sweden - Three Steps To Heaven - By George! He’s Got It - NH Hoteles Fit To March - This Globe’s Worth A Spin - Starwood Felled - John Lennon And Wings - Broadening Horizons

No Weed, But Thistle Ultimately Gives In

It resisted as long as it could but after seeing BIL International take control of 52.7% of the shares, Thistle Hotels could do little else but reluctantly encourage shareholders to accept a £627 million unconditional takeover offer from the Singaporean company. However, Thistle, defiant to the end, continued to grumble that BIL's improved offer of recent days, 130p a share, was still too low. BIL wants to take Thistle Hotels into the private sector, an environment which BIL feels will best serve the interests of Thistle Hotels.

Whitbread Prizes Go To Travel Inn

'These are good results', exclaimed both Chairman Sir John Banham and Chief Executive David Thomas as they admired Whitbread's figures for the year ending 1 March 2003. And few could argue with a 14% increase, to £214 million, in group pre-tax profit and a 15% increase in turnover, to £204 million, from the star performer: Travel Inn. The hotel chain, which has since gone on to record growth of 4.0% in like-for-like sales for the first eight weeks of Whitbread's new financial year, saw occupancy rise one percentage point to 82%, an increase which boosted RevPAR to £32.78. Travel Inn is to be rewarded for its performance with the bulk of the £275 million expansionary capital expenditure set aside for the year ahead, and with a possible voyage of expansion outside the UK. The chain's figures were in marked contrast to those returned by Whitbread's Marriott-branded hotels, which saw sales slump 3.1% to £392 million. It was such a good year that even the previously disappointing Beefeater restaurants increased their sales, by 0.8%. That was too little too late, though, as Whitbread revealed that 34 of the 51 outlets it put up for sale in January had now found buyers.

Fermenting Change

Scottish & Newcastle (S&N) has launched the sale of its entire Managed Retail business as it looks to spend less time in pubs and invest more in brewing. The sale of a business that has a net book value of some £2.3 billion will see S&N part company with 1,450 pubs and Premier Lodge, the third-largest budget hotel chain in the UK, with 8,200 rooms. The company hopes to have a deal done by the end of 2003, and has already indicated where its future lies by announcing a £278 million takeover of Bulmer, the UK's leading cider maker, and closing in on the remaining 51% of the shares it does not already hold in Portuguese brewer and distributor SCC.

Hotel Dreams Of Jeanette

Jeanette Montgomery, once in charge at One Devonshire Gardens in Glasgow, is now heading a £9 million project that will see Mar Hall on the banks of the River Clyde transformed into a five-star hotel to rival not only her former place of work but also, with its championship golf course, the likes of Gleneagles. The 53-room hotel should be at least partially open by December. Acclimatising to Scotland for the first time, though, is Von Essen Hotels, which has continued its recent acquisitive spree by paying Nexus Hotels a reported £10 million for the 27-room Dalhousie Castle Hotel in Bonnyrigg on the outskirts of Edinburgh. The Scottish capital itself has been the setting for Choice Hotels Europe's (CHE Group) latest disposal. On this occasion, though, the sale was made not for debt reduction purposes but rather because CHE Group considered that the Quality Commodore Hotel would not have generated acceptable returns on the money needed to bring the property up to standard. An unnamed private buyer paid £1.55 million for the 87-room hotel. Meanwhile, Edinburgh-based AWG Developments wants to build a 140-room hotel as part of a £20 million mixeduse development in Aberdeen.

Ramada Gets To Work In Sweden

Just over a month since the announcement that they had signed a franchise agreement, Sweden Hotels and Ramada International have rebranded the first three of nearly 60 hotels in Sweden that the partners intend to convert by the fourth quarter of this year. The cities of Östersund, Gothenburg and Uppsala are the first to be honoured, welcoming, respectively, the 126-room Ramada Plaza Östersund, the 55-room Ramada-Sweden Victoria Göteborg and the 127- room Ramada-Sweden Svava-Uppsala.

Three Steps To Heaven

A sound strategy, a high-quality portfolio and active ownership: the three ingredients that Pandox mixed to assure itself of a healthy start to 2003. In the three months to March the Swedish hotel investment company saw total property revenue rise 0.6% to €14.7 million and pre-tax income increase 7.1% to €4.9 million. However, Pandox's happiness cannot be complete while the troubles of the world economic downturn, the Iraqi situation and the Sars outbreak
affect its hotel market, a market which encompasses the UK, Belgium, Germany, Sweden and Denmark. Nevertheless, the company expects the 44 hotels it currently holds to help it generate full year pre-tax income of €21.4 million.

By George! He's Got It

Private investor Mustak Musa is set to pay a reported £72 million to St George, a subsidiary of the Berkeley Group, for its 409-room hotel at the St George Wharf mixed-use development in Vauxhall on the south bank of the Thames. The hotel could be the first of several in London to be snapped up by Mr Musa's newly established fund, which he is hoping to swell with the addition of a hotel in Paris and the Aloha Lake Village property development in Marbella, southern Spain.

NH Hoteles Fit To March

NH Hoteles' shareholders could rest more comfortably in their seats after Chairman and Chief Executive Gabriele Burgio brought good news to their meeting: total turnover, excluding turnover from managed hotels, for the three months to March had surged 19.6% to €203.9 million. The credit for this performance was once again due in large part to the Astron Hotels chain, in which NH Hoteles took an 80% stake in February 2002; the chain's 53 hotels contributed sales of €42.1 million. Those gathered at the meeting also heard that occupancy across the company's comparable hotels worldwide had slipped one percentage point to 57% and that RevPAR had fallen 5.5%.

This Globe's Worth A Spin

First there was Palm Island; now, the mastermind behind that development, Nakheel Corporation (formerly known as Dubai Palm Developers), is to sprinkle the waters off Dubai's Jumeirah coast with 30 man-made islands and create another tourist resort. The Globe Archipelago will cover a total area of 20 km², and will be home to a number of hotels. Meanwhile, the existing land mass of the United Arab Emirates has witnessed the opening of the 124-room Mercure Grand Jebel Hafeet Al Ain. Elsewhere in the region, a consortium of Saudi businessmen and investors is planning to invest a reported US$86.1 million in the construction of a 120-room hotel at the King Faisal Specialist Hospital and Research Center in the Saudi capital Riyadh.

Starwood Felled

Chairman and CEO Barry Sternlicht's opinion that the travel environment was at maximum distress sounded ominous. When this unhappy circumstance was combined with an impairment charge of US$104 million relating to the expected sale of 18 hotels in North America, then it was little wonder that Starwood Hotels & Resorts posted a net loss of US$116 million in its first-quarter ending 31 March. Total turnover for the period was down 1.2% at US$1.07 billion, with RevPAR at the company's owned hotels worldwide down 1.7% on the previous year's comparable. However, with what is traditionally its weakest quarter behind it, and with asset sales expected to reduce debt significantly, Starwood is optimistic in its outlook for the latter half of the year, as long as the Sars virus relinquishes its hold soon.

John Lennon And Wings

Peel Holdings is to begin work early next year on a mixed-use leisure park near Liverpool John Lennon Airport, to the south of the city of Liverpool. The Wings park, which is due to be ready in 2005, will include two budget hotels. Other developers with hotels on their mind are both working in Southampton. Hammerson, in partnership with Linden Homes, is putting the finishing touches to the WestQuay shopping centre, where a 200-bed hotel is planned, while elsewhere in the city McAleer & Rushe should have a hotel scheme finished by 2004. Elsewhere in the UK, Bimoto Developments wants to convert a listed mill on the site of the former Fuchs Lubricants oil refinery in Belper, Derbyshire, into a 37-room hotel that will be part of a mixed-use development.

Broadening Horizons

Hilton Group's Chief Executive David Michels has combined his existing role with that of assuming responsibility for the hotel division from the late Anthony Harris. Michels' deputy and Group Finance Officer Brian Wallace, and Jurgen Fischer, President of Hilton International, Europe and Africa, have each had their hotel responsibilities widened too. Meanwhile, Macdonald Hotels will have a new Chief Executive on 5 August: Patrick Dempsey, who leaves an identical position at Restaurant Associates to supplant Donald Macdonald, who will become Macdonald Hotels' Executive Chairman.

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10 more hotels in Vietnam join BHA

10 more hotels and resorts in Vietnam have been accepted to be new members of the Best Hotels Alliance (BHA) in Asia, bringing the total members of BHA to 33

10 new members are Century Riverside Hotel (Hue); Coco Beach Resort (Phan Thiet); Horison Hotel (Hanoi); Hon Tre island Resort (Nha Trang); La Domaine Hotel (Quang Nam); Legend Hotel (HCM city); Life Resort (Qui Nhon); Sai gon Omni Hotel (HCM city); Tuan Chau Resort (Ha Long) and Yasaka Hotel (Nha Trang)

BHA is established in Jan. 1998 with an aim to promote new images on hotels and resorts throughout the region in general and Vietnam in particular.

Hoteliers lack confidence in VisitScotland

e-Tid.com  -  Almost two-thirds of Scottish hoteliers believe prospects for the country’s tourism industry have declined since the Scottish Tourist Board transformed itself into VisitScotland two years ago.

The Sunday Herald reports new research by the Forum of Private Business in Scotland found that only 15% of 100 hoteliers surveyed thought the industry’s prospects had improved since the inception of VisitScotland, compared with 21% who felt there had been little change and 61% who believed they had worsened

The study also found that 84% of hoteliers backed the idea of a minister dedicated to tourism in the Scottish Executive, rather than the inclusion of the industry in a combined brief alongside culture and sport.

Bill Anderson, campaigns manager for the Forum of Private Business, said the study’s findings had been sent to Scotland’s First Minister, Jack McConnell, in the hope that such a dedicated post would be created in his new team.

The survey comes amid criticism of VisitScotland’s visitscotland.com website, which was launched last year with £2.5m of public funds and £4.5m from US IT group Schlumberger Sema.
Some tourism businesses claim the site is taking money out of the industry, as it receives 10% of the total cost of any booking made, in addition to charging a £3m booking fee