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Home > Newstrack > Full Story

Business Buzz

Mandarin Reels From September 11
The downturn in leisure and corporate air travel in the wake of the events of September 11 was largely to blame for the fall in profits posted by luxury hotel operator Mandarin Oriental for its full year ending 31 December 2001.

Net profit fell 76 per cent to US $4.3 million, with revenue also falling, by 15.6 per cent to US $227.9 million. According to finance director John Witt, the company’s hotel in San Francisco was worst affected by the downturn, although occupancy fell at all hotels, especially those dependent on US visitors. For example, occupancy at the Mandarin Oriental in Hong Kong fell 21 percentage points to 61 per cent. Although its chairman Simon Keswick points to 2002 being another challenging year, the Mandarin Oriental is pushing ahead with ongoing projects, including the construction of its flagship hotel in New York, which remains on schedule for its opening in 2003.

Total Eclipse Of The Sun
The decline in tourism following the events of 11 September was one contributory factor to the disappointing full year 2001 results for Sol Melia. The figures fell short of those expected both by the company and by certain analysts; EBITDA, for example, was expected to be euro 260 million but instead came in at euro 241 million, a decline of seven per cent on the previous year.

Travel-related industrial action and the euro 29.6 million boost the 2000 results received from the company’s sale of four hotels were also blamed for the 45 per cent fall in net profit to euro 64.7 million. Revenue, however, rose 14 per cent to euro 1.02 billion, with overall RevPAR up one per cent to euro 47 and average occupancy coming in at 69 per cent. Sol Melia expects its 2002 EBITDA to rise 10 per cent.

Hyatt Regency In Birmingham Is For Sale
The 319-room Hyatt Regency Birmingham has been put up for sale by its owners, majority shareholder, the NEC Group, Birmingham City Council and Hyatt International. However, even if a sale is concluded, Hyatt will continue to operate the hotel.

Meanwhile, the new 25 million pound 242-room Crowne Plaza hotel has opened at the National Exhibition Centre near Birmingham just 20 months after David McLean Developments began construction work. Elsewhere, the opening date of the 147-room Radisson SAS hotel in Leeds has been put back from February to 8 May. The company has put the delay down to compliance issues, since the hotel is located in a Grade II listed building.

Fresh Whitbread
Whitbread has reopened its newly renamed Marriott hotel in Edinburgh after a 15-month refurbishment. Whitbread acquired the former Swallow Royal Scot Hotel in January 2000 as one of the 38-strong Swallow hotels portfolio and the new name is not the only change: the room count, formerly 259, is now 245.

Meanwhile, the 248-room, five-star Dorchester Hotel in London is also to undergo refurbishment. It is expected that the face-lift will be completed by the end of the year and will reportedly cost in excess of 10 million pounds.

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