Rezidor: Economic slowdown in Europe impacts 3rd quarter
“The European hotel market in the third quarter was negatively impacted by the economic slowdown and the financial turmoil. Like-for-like RevPAR development for Rezidor was almost flat in the quarter with a decrease in occupancy offset by an increase in average room rate. This compares to the strong first half year RevPAR growth of nearly 8%,” says Rezidor’s President & CEO, Kurt Ritter.
The uncertainties surrounding the global economy make it difficult to predict the outlook. To mitigate the effects of the slowdown, a cost savings plan comprising mainly a reduction in fixed costs and improved purchasing agreements is being implemented throughout Rezidor. The plan is expected to result in annual cost savings of MEUR 20, with full effect as of the second half of 2009, Ritter continues.
“Although some new openings are likely to witness delays as a result of the credit crunch, 2008 will be another record year for Rezidor in terms of new signings. The long term strategy remains to grow our portfolio and focus on fee based high margin management and franchise contracts with limited or no down side. We have a contracted pipeline of close to 23,000 rooms out of which circa 85% are fee based and over 60% are in emerging markets,” concludes Kurt Ritter.