No Prizes For Raffles

Singapore-based Raffles Holdings is halfway towards realising a fear expressed earlier this year that its operating performance would be weak in 2002. In the six months to 30 June net profit plunged 95% to approximately US$9.7 million. RevPAR was also down, by 9% to US$87.8. Although the causes and effects of the prevalent economic climate are being blamed for the slump, it should be noted that the company's net profit for the comparable period in 2001 was boosted by exceptional gains of some US$185 million from the sale of its 55% stake in the Raffles City hotel and shopping complex. Revenue rose 5.5% to US$109.1 million, an increase which was largely attributable to the Swissôtel portfolio: revenue in Europe was up almost 66% to US$59 million. Despite seeing a challenging second half ahead, Raffles is confident that it will remain profitable this year. The company restated its desire to expand in Europe, either through acquisition or, preferably, by securing management contracts, with France and Spain named among the countries of choice.

Rotana On The Road To Damascus

It has been a long journey stretching back some three years, but it would appear from reports that Rotana Hotels is at last on the verge of attaining its goal of managing its first hotel in Syria, in the capital Damascus. The new addition will be an important step in the company's long-term ambition to manage a hotel in every major city in the Middle East. The company has also revealed that it will be opening its fourth hotel in Abu Dhabi in October. The US$32.7 million 288- unit Al Maha Rotana Suites will share some of the facilities of the Beach Rotana Hotel and Towers, the new name for the former Beach Rotana Hotel, which is currently being extended in a US$68 million project. Elsewhere in the region, the Kuwait Commercial Markets Complex Company now has a 10% holding in the recently opened Hilton Kuwait Resort after it sold a 15% stake to unnamed buyers for a reported US$6 million.

Solidere Fits Another Two In

Solidere, the Lebanese real estate company charged with the task of redeveloping downtown Beirut, has secured deals for two new hotels. Under a US$52.5 million property sale agreement, the Kuwaiti company Landmark is to invest US$150 million in the construction of a five-star hotel and a mixed-use complex, while Hilton International has agreed a US$60 million deal to build a 170-room hotel. Construction work on this latter project, which has no connection with the site of the recently demolished Beirut Hilton, is set to begin in September and is scheduled for completion in 2004. Elsewhere in the city, Six Continents has opened the 199-room Crowne Plaza Beirut, its fifth property in Lebanon.

Prestige Displays Its Wares In Barcelona

Spanish company Rosincs Hotels, which operates under the Prestige Hotels brand name, has secured the right to manage a new hotel currently being built in central Barcelona. The 45-room property, which is owned by Manufacturas Balmes Vives, is due to open at the end of the year. Rosincs Hotels is looking to expand into major cities; its current stock of five hotels, a total of some 911 rooms, are all located in or around Rosas on the Costa Brava. Meanwhile, Hesperia Hoteles, which currently has 30 hotels in Spain, is to open a 70-room, four-star hotel in the southern city of Granada in summer 2003. Elsewhere, the renovation of the 501-room, four-star Atalaya Park Golf Hotel & Resort, which has been in progress for the last 14 months, has been completed. Spanish chain Master Hotels revealed that the work on the hotel, near Marbella on the Costa del Sol, cost €7.0 million.

Starwood Felled In The Second Quarter

The continued sluggishness in the business travel market has been reflected in the results posted by Starwood Hotels & Resorts for its second-quarter ending 30 June. The company saw revenue fall 7.0% to US$1.03 billion and EBITDA fall 20.2% to US$320 million. RevPAR for the quarter at comparable owned and leased hotels was down 10.1% in North America and 10.2% elsewhere in the world. The company predicted that RevPAR for the full year would be down by between 2% and 3%, with EBITDA for the full year coming in at between US$1.18 billion and US$1.21 billion.

Three Gifts From Eastern EuropeUAB Merko Statyba, a subsidiary of Estonian construction company Merko, is due to start building work this month on a 159-room hotel in the Lithuanian capital Vilnius. The hotel, which is set to be finished in November 2003, will be operated by an international hotel chain. The only clue to the chain's identity at present is that it is a chain not currently represented in the Baltic States. In Hungary, Pannonia Hotels will officially open the 227-room, four-star Novotel Budapest Centrum in the second half of September after signing a 20-year operating contract with the Austrian owners of what was the former Palace Hotel. Over the border in Romania, locally based construction company Setraco Holding is to invest €1.1 million in the Setraco hotel complex in Bucharest.

Falcon Swoops As J&J Top Gets In A Spin

J&J Top of the Czech Republic, which last month emerged victorious with its bid of €20.3 million for the 124-room, five-star Hotel Praha, has seen its efforts come to nothing after it missed the deadline for payment. Under the rules of the original contest, the prize now passes to the runner-up: the Prague-based Falcon Capital. It must pay the council of the Prague 6 Quarter the full amount of its bid, €16.4 million, by 30 July or default in its turn to the third and final original bidder The Devo Group and its strategic partner Columbus Monaco. Falcon Capital has already made an initial payment of approximately €3.3 million but faces opposition from certain council members, who reportedly feel that the company is not a trustworthy partner.

Leisure Group Decides Renovation In Morecambe Is Unwise

Leisure Group UK has changed its mind about renovating the Midland Grand Hotel in the Lancashire seaside town of Morecambe and will instead put the hotel up for sale just over a year after it paid in excess of £325,000 for the property. In April, the Grimsby-based venture capital firm, then known as Kalber Leisure, announced a £10 million project aimed at restoring the hotel to its original Art Deco splendour, and in so doing creating a flagship property for itself. The group made its decision after discovering that the cost of the work involved would have exceeded the original budget, something that the group's private equity backers found unacceptable. One hotel that has undergone a multimillion pound refurbishment, however, is the 83-room Holiday Inn Ellesmere Port/Cheshire Oaks in Ellesmere Port, northwest Cheshire, which is due to reopen this autumn almost a year after being ravaged by fire. Elsewhere in the UK, Whitbread is planning to build a 40-room Travel Inn and a Brewers Fayre restaurant at Branston, near Burton-upon-Trent in East Staffordshire.

Splash Out In Amsterdam, And Reach For The Stars In Switzerland

AMS Hotel Group, a wholly owned subsidiary of Camp Kleyn Associates, has been lined up to operate a 230-room hotel due to be developed in southeast Amsterdam by locally based developer Splash, which is investing €30 million in the project. AMS currently operates 13 hotels in Amsterdam and is due to open the 345-room, four-star AMS Airport Hotel Lijnden near Schiphol Airport in 2004. Meanwhile, an unnamed English investor is reported to have paid an undisclosed sum for the 50-room Hôtel Les Etoiles in Collombey in southwestern Switzerland. It is not yet clear whether the premises, which were closed after running into financial difficulties, will continue to be operated as a hotel.

After The Sales, Count The Profits

NH Hoteles has followed up last week's announcement of an 11.6% increase in consolidated sales for the first half of 2002 by revealing the complementary set of profits. Net profit in the six months to 30 June rose 8.1% to €43.9 million, with a 13.2% increase in total income the result, predominantly, of the incorporation of sales from the company's new NH Mexico unit and the German chain Astron Hotels. In contrast, EBITDA fell 6.4% to €105.6 million, thanks in part to a reduction in income from the company's Sotogrande real estate unit.

Green Kale

The Turkish manufacturer Kale Grubu has made its first venture into the tourist market by opening the Ida-Kale Resort hotel in the northwestern coastal town of Çanakkale. The 84-room property will be managed by the group's tourism and transport subsidiary Kale Nakliyat Seyahat. Meanwhile, the Jeddah-based holding company Dallah Al Baraka is to invest a reported US$260 million in the construction of several units on the Taghazout complex in the Moroccan city of Agadir. According to a government official, the Saudi group is one of many public and private operators which between them will be investing a total of US$1.26 billion in the complex, on which some 35 hotels will rise over the next few years. Elsewhere, Israeli investment holding company Koor Industries has acknowledged the interest shown by the US-based Geller hotel concern in its 55% stake in Sheraton-Moriah Israel, the chain which comprises eight Sheratonbranded hotels in locations including Tel Aviv, Jerusalem and Eilat.

The European Hotel Market

Share prices across the board have suffered in the wake of the volatility experienced by the stock markets over the past week. The Ibex-35 index in Spain, for example, closed at a five-year low on Wednesday.

Hanover International

The share price responded to news that entrepreneur Jack Petchey had increased his holding yet again, to 14.4%. This action has been coupled with agitation from fund manager Ray French, who has a 2.5% holding, and who reportedly has a proven ability at tackling slow-acting management.