Rezidor continues to focus on value enhancing growth and cash protection
?The global recession continues to impact the hotel market and industry RevPAR in Europe fell more than 20% in the first six months of the year compared to the same period in 2008. During the second quarter, the market showed signs of stabilisation in occupancy decline, while room rates continued to drop further. Rezidor has seen a less adverse impact in Norway, Sweden, the UK and South Africa than in the rest of the EMEA, says Kurt Ritter, President and CEO of The Rezidor Hotel Group.
?Visibility is still very limited and Rezidor maintains its focus on cost management and cash flow. Our aggressive cost cutting programme is proceeding with expected annual savings of around MEUR 30. So far this year, we have managed to achieve total savings of MEUR 12.5. In addition, we expect to reduce central costs by 10% on an annual basis,?Ritter continues.
Rezidor will maintain its strategy of further reducing risks in the portfolio by growing with fee-based managed and franchised rooms.
?Despite the downturn, we seek profitable opportunities and continue to reduce risks by adding fee-based managed and franchised rooms to our portfolio. In the first six months of the year, we added more than 3,100 new rooms to operation, 87% of which were fee-based. In addition, we added close to 5,000 new rooms to our pipeline, that currently features over 23,000 rooms, of which 90% are fee-based?.
?Even considering the recent declines in RevPAR, emerging markets remain strong performers, and we continue to believe that there is a fundamental and structural need for internationally branded hotels such as those in the Rezidor portfolio. 84% of the new rooms contracted this year are in Eastern Europe, the Middle East and Africa. A major part of our total pipeline, close to 75%, is also in these emerging markets,? Kurt Ritter concludes.
The full interim report is available on www.investor.rezidor.com