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HVS EMEA Hospitality Enews - Week Ending 7 November 2008

The latest hospitality news from Europe, the Middle East and Africa

RZB Takes 75% Of The Hilton Vienna

Raiffeisen Zentralbank Österreich (RZB) and Soravia Group are now “brothers” bound by a common interest in the Hilton Vienna. This band of brothers is a silent order; it remained tight-lipped while several months of due diligence was conducted and agreed to say nothing about the price RZB paid Soravia for a stake of 75% in the 572-room hotel. Soravia retains a stake of 25% in the hotel, which stands in the Austrian capital Vienna. Hilton’s long-term lease is unaffected by the deal.

Interstate To Manage Hotel At Freestyle Park

Freestyle Park is the name of an indoor mixed-use retail and entertainment complex that MT Development is to build in the southwestern outskirts of its home city of Moscow. The 280,000 m² complex will include a ski slope, cinemas, food outlets, a science museum and most excitingly of all – from Interstate Hotels & Resorts’ point of view at least – a hotel with some 300 rooms. The hotel that Interstate has signed up to manage is due to open in spring 2011.

Christmas Comes Early For Rezidor In Antwerp

Hotel companies that have been good all year can expect presents in December. And if like Rezidor Hotel Group they have been extra-specially good then they get a big present before Christmas: in Rezidor’s stocking is the freedom of Astrid Square, in the Belgian port of Antwerp. On that square, in December, Rezidor gets to open the 247-room Radisson SAS Astrid Hotel Antwerpen and the 59-room Park Inn Antwerpen Astrid. What will be the Radisson hotel is currently the Park Plaza Astrid Antwerp; Park Plaza Hotels’ management contract is to be terminated on 23 December. Rezidor is working on both projects with Elbit Imaging, the Israeli real estate firm that owns the Park Plaza Astrid Antwerp.

Oman United In The Premier League

The Premier Inn brand will be coming to the sultanate of Oman in 2010. The joint venture that Whitbread formed with Emirates Group in 2006 has signed an agreement with HE Abdul Rakhyoot that will see at least three Premier Inns developed initially. The first phase of the development work is expected to cost RO37 million (US$96 million) and the first hotels will be built in the capital Muscat and in the cities of Sohar and Salalah. When Whitbread and Emirates Group came together they had as their goal the development of a total of around 4,000 rooms in the six countries that form the Gulf Cooperation Council. One of those countries – the United Arab Emirates – has already welcomed a 308-room Premier Inn hotel at Dubai Investments Park.

Sun Dream To Awaken The Dead Sea

The company Sun Dream has a dream: to bring Russian tourists to the sun. The company, which is owned by the municipality of Moscow, and Intercons Corporation, is to start work some time in the next few months on the construction of a 240-room hotel in the resort of Ein Bokek, on the southern shores of the Dead Sea, in Israel. The luxurious hotel, which will come complete with a helipad, is set to cost US$100 million.

Starwood Sows Sheraton On The Seashore

Starwood Hotels & Resorts has signed an agreement with the Russian group Megapolis to manage the Sheraton Sochi Hotel. The hotel, which will have 188 rooms and 24 suites, is destined to open in Sochi, a resort on the Black Sea in Russia, in 2011. The Sheraton Sochi Hotel will be only the second hotel in Russia with the Sheraton brand, the other being the Sheraton Palace Hotel, Moscow.

Rezidor Opens Hotel In Durham; Park Inn Planned For Russia

The 207-room Radisson SAS Hotel, Durham has opened to become the first hotel in the northeast of England to have the brand. And now we have to leave old Durham town and head straight over to western Russia, where developer Rushotel is working on what will become the Park Inn Tula. The 190-room hotel is set to open in the city of Tula in the first quarter of 2011.

A New Abode It's Plain

Abode Hotels has acquired a site in the centre of the city of Salisbury, in southern England. And on that site Abode will develop – in part from new materials and in part from existing Georgian-era material – the Abode Salisbury. Abode Hotels’ fifth hotel in the UK will be of a size similar to the Abode Exeter (which has 53 rooms) and will open on a date that falls some time after autumn 2009, which is when the Abode Chester is set to open.

Kiessling's Corner

HVS's analyst in Madrid Gabriele Kiessling pulls some fresh plums from the Spanish news-pie. A nineteenth-century building in Madrid, in Atocha (street 36), is to be converted into a hotel after Madrid Council gave its approval. The five-storey hotel will have 82 rooms. The council has also given its approval to plans to refurbish another building on the same street and turn it into a 139-room hotel. Also in Madrid, the InterContinental Madrid will at the end of this month be opening five additional suites, at a cost of €1.6 million. Elsewhere, Domus Hotels has lined up three hotels to manage: the Dinastia in Vigo (Galicia); the Condedu (Extremadura); and the Del Vino in Cariñena (Zaragoza), which will operate under Domus’s luxury brand Excellentia. Condedu and Dinastia will take the midscale City Express brand. Domus Hotels is to increase its number of hotels by 40 in 2010.

HVS Executive Search Announces The Release Of The HCE London Hotel Salary Report 2008

Now in its fifth year, the HCE London Hotel Salary Report includes data from the largest number of participants yet – 74 hotels in total. Compiled through the HCE Hospitality Compensation Exchange, the report presents data on executive committee and department head positions; midscale, first class and luxury hotels; annual base salary, including analysis by room count and classification; bonus; and benefits. The average London Executive Committee salary is £62,683, up from £58,598 in 2007. Directors of sales and marketing secured the largest increases in salary: average salary rose by 14%. The HCE London Hotel Salary Report 2008 is now available for purchase at £350 (+ VAT). To purchase a copy and for further information, please contact Pooja Vir +44 (0)20 7878 7756 pvir@hvs.com.

Rezidor Bitten In The Third Quarter

Rezidor Hotel Group found itself in the teeth of the credit crunch in the third quarter of its financial year; and those teeth chewed the company’s figures rather. In the third quarter to 30 September 2008 Rezidor saw EBITDA fall by 22.8%, to approximately €20.0 million, and revenue fall by 4.2%, to €192.5 million. Like-for-like RevPAR across Rezidor’s leased and managed hotels fell by 0.4%, to finish on €81.40. In the hope of release from those dreadful molars, Rezidor is implementing a cost-reduction programme.

Millennium & Copthorne Bites Back

Like Rezidor, Millennium & Copthorne (M&C) too found its third quarter menaced; yet, unlike its Swedish counterpart, M&C escaped with almost no teeth marks upon it. M&C had already taken steps to control costs after sensing a slowdown in growth in Asia, and so was spat from the slavering maw to land deftly on its feet. In the third quarter ending 30 September 2008, M&C’s revenue was 8.3% higher, at £173.9 million, and its headline pre-tax profit was up 4.2%, to £30.0 million. Marketwide RevPAR grew by 4.0%.

Absolute Share Price Performance Over the Past Week 30 October-6 November 2008



Millennium & Copthorne - The share price fell from earlier gains on analysts' concerns about a deterioration in M&C's trading since the end of the third quarter.

NH Hoteles - Jefferies International had an 'Underperform' rating and lowered its target price from €7.00 to €3.50 after NH's third-quarter results last week.

Rezidor Hotel Group - The company reported that third-quarter figures that had been hit by the prevalent economic conditions.


For the latest in the hospitality industry, please visit: http://www.hvs.com. You are also welcome to contact the following personnel.

Russell Kett, Managing Director rkett@hvs.com
Charles Human, Managing Director – HVS HWE chuman@hvshwe.com
Tim Smith, Director tsmith@hvs.com
Demetris Spanos, Managing Director – HVS Athens dspanos@hvs.com
Hala Matar Choufany, Managing Director – HVS Dubai hchoufany@hvs.com
Christopher Mumford, Managing Director – Executive Search cmumford@hvs.com
Philip Bacon, Managing Director – HVS Madrid and Managing Director, EMEA & Asia – HVS Shared Ownership Services pbacon@hvs.com
Adrian Jones, EMEA Hospitality Enews Author ajones@hvs.com