In the first quarter of 2005, hotel revenues at NH Hoteles increased by 1.2%, to €194.4 million, in spite of the negative Easter Week effect…
In the first quarter of 2005, hotel revenues at NH Hoteles increased by 1.2%, to €194.4 million, in spite of the negative Easter Week effect. The fact that Easter Week (which being a holiday season, records a major drop in hotel sales) was in March in 2005, while it was in April in 2004, means that to get proper comparable information, the figures for the first four months of the year should be taken into account. Thus, while in comparable hotels in Europe, the Revpar (revenues per available room) went up by only 0.2% in the first quarter, it performed much better over the period to April, increasing by 4.15%.
Worthy of mention, in the first four months of the year, is the 6.2% growth in the Benelux, the 8.6% growth in Germany and the 10% growth in Switzerland, Austria and Hungary, with the Revpar at comparable hotels in Spain moving up a little, by 0.1%. Over the period up to the end of April, hotel occupancy rates have improved over the board in all the markets where NH Hoteles is present, in Europe and in Latin America. Worthy of mention is the performance in Easter Week. The occupancy rate rose by 4.5% and the Revpar by 1.4% compared with Easter Week in 2004.
Other factors that have been a drag on the hotel business in the first quarter are the fact that the public holidays over the Christmas period were on different days of the week, which in practice meant that there were 4 less business days in January, the fact that February was one day shorter than in 2004, and the fact that some fairs did not take place in 2005.
In spite of these adverse circumstances, over the period to March the company consolidated the improvement in its performance in Central Europe. Worthy of mention is the improved performance in Spain, where the occupancy rate rose by 1.9% in comparable hotels. In Spain the negative effect of Easter Week in the first quarter was significant. It has led to sales over the period to March falling back by 2% and the Revpar for comparable hotels by 4.1%. However, the figures to April make for a much better situation. Revpar was up slightly, by 0.1%, and the occupancy rate improved by 4.1%.
The negative impact of Easter Week has been felt particularly hard in Germany where, however, taking figures for the period to April, NH Hoteles has improved its performance, gaining market share, with the occupancy rate up by 9.8% and the Revpar by 8.6%. For the period to March sales fell back by 0.2% and the Revpar in comparable hotels grew by 0.2%, with a 3.7% increase in occupancy.
Business in the Benelux was very positive until March, with sales up by 4.6% and EBITDA increasing by 21.5%. The Revpar in the Benelux increased by 6.4%, as a result of a 7% rise in the occupancy rate.
At the Austria, Switzerland and Hungary business unit, sales to March were up by 13.7%, although higher leasing costs for adding new hotels meant that EBITDA was negative, by €1.2 million. The Revpar for comparable hotels in these countries rose by 11.5%, as a result of a 9.7% increase in occupancy rates.
The figures for Mercosur up to the end of March are good. Both the occupancy rate and the ADR have recovered. Specifically, the RevPar for Argentina rose by 37.2% in local currency. The Easter Week impact made itself felt more in Mexico where RevPar fell 4.2%. However, the figures up to the end of April record 1% growth.
Operating earnings (EBITDA) stood at €19.6 million, and fell back in terms of hotel activity, influenced by the 3.6% decrease in average prices and the 4.5% increase in leasing costs because of new hotel openings.
The company has continued its cost-saving efforts and, in the first quarter of the year, has managed to bring operating costs per occupied room down by 3.7% in comparable hotels. This means that, given the major increase in occupancy rates and cost inflation, savings achieved at comparable hotels compared to the first quarter of 2005 totalled €9.47 million.
The property business at Sotogrande has continued to perform extremely well, recording sales of €11.2 million and EBITDA of €6.5 million. A volume plot was sold in March 2004 for €21 million, while the figures for the first quarter of 2005 are for ordinary business, which grew by 70.5% compared to the same period last year.
It should be pointed out that as at 31 March 2005, property sales commitments yet to be recorded in the accounts amounted to €90.41 million, with an estimated margin of €49.6 million, compared to sales commitments of €82 million recorded for the same period in 2004.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
