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International financial turmoil is making hotel forecasting more problematic according to one chain.
In a frank assessment, Rezidor Hotel Group”s president and CEO Kurt Ritter noted the economic situation, but insisted his company was well poised to cope with any fluctuation.
”We are aware of the turmoil on the financial markets and the continued uncertainties surrounding the global economy, which make it difficult to predict the market outlook for 2008,” he said.
”We are confident of achieving our target of adding 20,000 rooms to operations from 2007 to year-end 2009, and believe that the ongoing shift in our business model driven by more fee-based revenue, will continue to support our margin target.”
Ritter adds that Rezidor was ”heavily impacted” by Easter falling so early this year for its first quarter results, although with a heavily Scandinavian clientele, this had been anticipated. Revenue and earnings remained ”robust.”
Rezidor”s concentration in the Nordic region, Western Europe and the emerging Eastern European markets has sheltered it somewhat from the economic storm battering the US and the Group is predicting it is on course to grow in its key areas.
”In order to secure a profitable growth, we are continuing to focus on growing the number of rooms on fee-based contracts,” said Ritter. ”In the first quarter of this year, we opened 1,000 new rooms; 100% of these were under managed or fee-based contracts.
”We also added close to 3,000 new rooms to our contracted pipeline, mainly managed or franchised.”