Rezidor SAS Hospitality Announces 2005 Financial Results
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Rezidor SAS Hospitality Announces 2005 Financial Results
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Category: Worldwide - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2009-10-19
Improved Financial Performance Follows Robust Growth Strategy; 37 New Hotels Opened
Today, Rezidor SAS Hospitality, which operates Radisson SAS Hotels & Resorts, Regent International Hotels, Park Inn, Country Inns & Suites and Hotel Missoni in Europe, the Middle East and Africa, announced its results for 2005. The company generated group wide revenue of 587.0 MEUR (approx. $702 million U.S.) as compared to 498.7 MEUR (approx. $596 million U.S.) in 2004; an increase of 17.7 percent. Earnings Before Taxes (EBT) was 31.6 MEUR (approx. $37.8 million U.S.) versus 4.2 MEUR (approx. $5 million U.S.) in 2004. This result includes a 6.2 MEUR (approx. $7.4 million U.S.) gain from the sale of shares of the Radisson SAS Hotel, London Stansted Airport. The key driver of the healthy financial performance is an 11 percent growth in the company's Revenue Per Available Room (RevPAR).
"Rezidor SAS is one of the fastest growing hospitality management companies in the world, offering a great portfolio of brands, as well as being a profitable business for our shareholders," said Kurt Ritter, president & CEO of Rezidor SAS Hospitality.
In 2005, the group signed 29 new hotel contracts (15 Radisson SAS, 13 Park Inn and one Lifestyle) totaling nearly 5,000 rooms. The company's strong business development strategy resulted in the opening of 21 new Park Inn hotels and 16 new Radisson SAS Hotels & Resorts across Europe and the Middle East. As of 2005, Rezidor SAS operates a portfolio of 263 hotels (including 46 properties under construction) encompassing approximately 50,000 rooms in 48 countries.
"One of our biggest assets is our growth strategy. We have grown by 16 percent this year in terms of number of rooms, which is the most significant organic growth in Europe in the industry," adds Kurt Ritter.
Financial Highlights of the Year 2005 -- RevPAR reached 67 EUR (approx. $80 U.S.), which is 6 EUR (approx. $7 U.S.) (11 percent) greater than last year. -- Earnings Before Interest, Tax, Depreciation & Amortization (EBITDA) for 2005 was 45.2 MEUR (approx. $54 million U.S.), versus 18.8 MEUR (approx. $22.5 million U.S.) in 2004. The positive increase versus 2004 is mainly due to comparable units increasing EBITDA by 20.0 MEUR (approx. $23.9 million U.S.) versus last year.
"In 2005, the European hotel market continued to develop favorably with a RevPAR increase of four percent to five percent on an average. With an 11 percent increase in RevPAR, Rezidor SAS has been able to capitalize on this growth by being present in the right markets at the right time," said Knut Kleiven, deputy president & chief financial officer of Rezidor SAS Hospitality.
An international company with Scandinavian roots, Rezidor SAS has a strong presence in Scandinavia. With the Nordic capitals reporting the largest increase in RevPAR this year, i.e. increases of 19 percent in Copenhagen, 13 percent in Oslo, 10 percent in Stockholm and nine percent in Helsinki, Rezidor SAS has benefited significantly from the market recovery in these regions. Continental Europe experienced a wide range of results with an average increase of three percent to four percent. Despite the terrorist attacks in London, the hotel market reported a four percent increase in RevPAR over the last year. The Middle East continues to perform at a mixed pace, while Russia and Eastern Europe have shown tremendous growth potential for revenue yield.
Expansion Strategy
The past year was significant for Rezidor SAS business development. The market witnessed the openings of 37 new properties. The company also signed a worldwide license agreement with the Italian fashion house Missoni, to develop a new lifestyle hotel brand of the same name: Hotel Missoni. The plan is to have 30 properties worldwide in 10 years.
Another instrumental deal in 2005 was the takeover of nine Park Inn hotels in the UK. These additions to the Park Inn brand will further strengthen the company's presence and brand awareness in the region. With its rapid growth, Park Inn has become a significant hotel brand in the mid market sector. Rezidor SAS plans to have a total of 100 Park Inn properties (opened and contracted) by the end of 2006.
Radisson SAS Hotels & Resorts, known for its innovative design and striking architecture, is now ranked the second largest brand in Europe. Rezidor SAS proudly announced the addition of distinctive Radisson SAS properties that will serve as prototypes for future generation of hotels:
The Radisson SAS in Frankfurt, with its one-of-a-kind shaped blue glass facade, has already seized global recognition and numerous awards. The Radisson SAS Media Harbour Hotel in Dusseldorf has become a popular and trendy place to "see and be seen." The charming Radisson SAS Style Hotel in Vienna has already made headlines for its sophisticated and elegant interior design. Dubai's vibrant Media City features the Radisson SAS Hotel as the first to open in the district. Other signature openings in 2005 were the Radisson SAS Resort at Disneyland Paris, a family vacation and meeting resort; the Radisson SAS EU Hotel in Brussels, located adjacent to the European Parliament; and the Radisson SAS Hotel Birmingham, the tallest building in the city.
During the first quarter of 2005, the SAS Group (parent company of Rezidor SAS Hospitality), concluded an agreement with U.S.-based Carlson Hotels Worldwide. Under this agreement Carlson Hotels Worldwide acquired 25 percent in Rezidor SAS Hospitality in exchange for improved commercial terms in the parties' master franchise agreement. The new agreement and terms provided Rezidor SAS with a cost reduction of 6.0 MEUR (approx. $7 million U.S.) for the second half of 2005. The full year effect is estimated at 11.0 MEUR (approx. $13 million U.S.) and will rise with increased operating revenue.
In 2006, the company will continue with its vigorous development strategy with an increased focus on developing Russia, the Commonwealth of Independent States and Eastern European markets. The company already operates five hotels in Russia and has recently signed two new agreements in Moscow to develop the Radisson SAS brand. A newly-built Park Inn will soon open its doors in Ekaterinburg, marking the entry of the company in the mid-market segment in this region.
Rezidor SAS Hospitality opened 15 new hotels across Europe and the Middle East from December 2005 to January 2006, and is well on track with its target of having more than 700 hotels by 2015.
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