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GLOBAL HOTEL MARKET ROUNDUP
- Rezidor of Brussels Opens Record 36 Locations in 2009
Kurt Ritter, CEO, Rezidor Hotels
- Royal Hotels of Osaka Projects Net Fiscal Year Loss of $3.3M
- Skyrocketing Festival Rates Hurt 'China's Hawaii' Image
- Paris-based Accor Demerges Hotels and Services Division
- Marriott International Predicts Lengthy Recovery for Luxury Properties
- Mumbai's KBJ Group Enters Hospitality Industry
(BRUSSELS, BELGIUM) -- The Rezidor Hotel Group is on a roll. The Brussels-based organization finished 2009 with a record number of openings - 36 hotels with 7,100 rooms creating 4,000 new jobs across Europe, the Middle East and Africa.
The 2009 performance surpassed the company's previous high mark in 2008 - 33 openings with 6,500 rooms.
The cumulative growth in rooms in operation in the 2007 to 2009 period was 41 percent.
"We are proud to have achieved these results, together with our owners and developers," says Rezidor president and CEO Kurt Ritter. "2009 has been a challenging year, but even in tough times, Rezidor believes in growth."
Ritter says Rezidor focuses on fee-based contracts (87 percent of all opened hotels in 2009) and on a business development in emerging markets like Africa, Russia and the Commonwealth of Independent States made up of former Soviet Republics "where Rezidor is the leading international player in the hospitality market."
(OSAKA, JAPAN) -- Royal Hotels Ltd. president Hajime Kawagoshi expects a better bottom-line performance in 2010 but still forecasts his company will end fiscal 2009 at the end of March with a net loss of 300 million yen ($3.3 million US).
Royal operates in eight Japanese cities. Kawagoshi had previously estimated Royal would see a profit of 100 million yen. In fiscal 2008, the company showed a profit of 158 million yen. (One yen equals $0.011246 US, or a little over one cent US.)
Kawagoshi told Business Week room bookings plunged following the financial crisis fueled by Lehman Brothers Holdings Inc.'s bankruptcy in 2008, while the discovery of swine flu in western Japan last May caused the cancellation of about 80 percent of major seasonal events that would have attracted a large number of hotel guests.
"The effect of the swine flu scare almost disappeared in the second half" of last year, Kawagoshi told Business Week. Average occupancy in the October to December period was 76.8 percent at the company's flagship 973-room Rihga Royal Hotel Osaka. The hotel says a 75 percent occupancy level generally is enough to show a small profit.
(HAINAN, CHINA) -- Hainan Province's image as China's Hawaii was tainted during the recent Spring Festival period when some luxury hotels (Hilton Sanya Resort) charged up to 11,138 Yuan per night ($1,631 US), Chinese travel experts told the China Daily newspaper.
Hotels in Sanya, in Hainan, showed only a 60 percent occupancy rate, down from 90 percent in previous years. Hainan is China's tropical southern island.
When the festival ended last Sunday, rates in Hainan returned to their normal level. For example, a 22,300-yuan-per-night suite at one luxury hotel dropped to 3,050 Yuan. . (One Yuan equals about 14 cents US).
On average, travel consultants told the China Daily the booking price for a standard room at a five-star hotel in Sanya declined to 1,300 Yuan this week, or about one-tenth the rate charged during the festival.
One hotel guest told the China Daily he had stayed at a no-star hotel and was still charged 1,500 Yuan ($220 US) for a standard room per night, up from the usual 200 Yuan ($30 US).
The guest told the newspaper, "The rate is that of a five-star hotel but the service is that of a one-star hotel."
(PARIS, FRANCE) -- Accor is restructuring its operational front. The Paris-based international hotel company is demerging its two core businesses, hotels and services. Shareholders are expected to approve the new plan at their annual meeting June 29.
HNN Newswire reports that according to Accor chairman and CEO Gilles C. Pelisson, "Today, both businesses (hotels and services) are market leaders, with the critical mass and international reputation to operate independently in fast-changing markets.
"With 4,100 hotels in 90 countries and 145,000 employees, the hotel business (of Accor) is the European market leader and a global hotel manager, with a unique foundation in the mid-scale and economy segments."
Pelisson says that Accor Services, as distinguished from Accor Hotels, operates in 40 countries with 5,600 employees, "and has become the world leader in employees and public benefits and a major provider of prepaid services, with more than 12 billion euros in issue volume in 2009."
(NEW YORK, NY) -- Luxury hotels in the U.S. and the Caribbean could be in for a rough ride this year and also in the next several upcoming seasons, Marriott International president Arne Sorenson told a recent Reuters Travel and Leisure Summit in New York City.
Arne Sorenson
Numerous smaller projects in the Caribbean that rely partly on residences "may never come back because they rely on the kind of lavish spending that has (largely) gone out of vogue with travelers," Sorenson told Reuters.
"They require really conspicuous consumption to support their entire business model," Sorenson said.
PricewaterhouseCoopers notes that while room rates sank nearly 9 percent for the US hotel industry as a whole in 2009, the luxury hotel segment saw their rates tumble more than 16 percent.
Reuters reports many hotels have already buckled under their debt loads "as lower room rates constrain cash flow used to service these (loan) payments."
For instance, the Renaissance Mayflower Hotel in Washington, DC stated last year it would no longer be able to meet debt service.
And in Marriott's own family, Ritz-Carlton Hotel Co., a Marriott division, previously stated it plans to close its Lake Las Vegas property this year.
(MUMBAI, INDIA) -- In the jewelry business for almost 100 years, Mumbai-based KBJ Group is entering the hospitality industry through its recently formed KBJ Hotels Ltd., according to HNN Newswire. The new company will focus on hotel development and management contracts.
KBJ's initial investment is estimated at Rs 500 core. (1 Indian rupee = $0.021603 US)
Mohit Kamboj
"We believe that the 2-tier and 3-tier cities in the country lack adequate hotel amenities for overnight travelers," says Kamboj.
"Moreover, the local population consists of affluent businessmen and executives who have the money to spend but do not have access to quality (hotel) outlets and fine-dining options for leisure or business."
Kamboj adds, "We have traditionally been a jewelry manufacturing and trading group and this is a strategic step taken by the group, keeping in mind its ambitious goals for the future."
HNN reports KBJ will develop five-star category hotels in tier 1 and tier 2 cities of India. The first, its flagship property, will be in Varanasi, followed by hotels in Goa, Bodhgaya, Kushinagar and Khajuraho.
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