Room rate recovery

The hotels market may be bouncing back but it will be next year before hoteliers start to see real financial benefits coming through, hotel and gaming chain Hilton said today.

The comments came as the group posted strong half-year results, to the end of June, showing a 72% rise in pre-tax profits to £189.7m, with turnover also rising to £5.6b, from £4b the year before.

Within the hotels operation, profits came in 19.6% ahead, at £67.1m, from £56.1m at the same point last year.

Revenue per available room (revpar) across the group was up by 9.2%, with occupancy levels up by 5.6 percentage points, but average room rates were down by 0.3%.

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Michels: no recovery before 2005

Group chief executive David Michels said most hotels were now seeing improvements in both business and leisure visitor numbers. But he added: "It will not be before 2005 that rate reacts accordingly." While some hotels were enjoying sustained revpar growth, guests were still booking late, making forecasting tricky. "As we have said before, we do not anticipate a full hotel recovery before 2005," Michels stressed. The focus continued to be on expanding the division through management contracts and franchise agreements, he said. A total of 14 hotels were opened in the six-month period, and a further 21 are planned over the next year-and-a-half. By the end of next year the group planned to have 61 Hilton Worldwide Resorts in 28 countries. The group has also launched localised Hilton websites in the UK, Germany, Japan and Scandinavia, a move that had contributed to a 116% growth in internet bookings in the first half of the year, said Michels. Within the UK, hotels turnover rose to £319m, with profits up to £42.2m. Revpar was up by 9.9% as a whole, with Hilton branded hotels reporting a 17.2% rise in London and 3.4% growth in the provinces. Average room rates were up by 5.3%, and occupancy was ahead by 3.1 percentage points. Occupancy rates in London were up by 5.3 percentage points overall, to 78.4%, with room rate growth of 9.4%. The period saw the opening of the Waldorf Hilton in London and the Hilton Newcastle Gateshead as well as the signing of contracts for hotels in Manchester, London's Canary Wharf, Dublin Airport and Euston Plaza, also in London, Michels added. by Nic Paton Buy this week's *Caterer* magazine for more industry news and analysis