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Hotel market getting "increasingly weaker"
Hotels face an increasingly weaker market and a further fall in revPAR (revenue per available room) in 2009, Kurt Ritter, president and ceo of the Rezidor Hotel Group, said.
The industry had a tough second half of 2008 with double digit falls in revPAR during the last three months.
Rezidor reported pre-tax earnings of €70.9m for the year ending December 31 compared to €86.5m in 2007.
Post-tax profit slumped from €45.7m in 2007 to €26.1m last year.
The group, whose brands in include Radisson Blu (formerly SAS), Park Inn and Regent, also reported a slight drop in revenue of €400,000 from €785.2m to €784.8m.
For the last quarter of 2008, Rezidor said post-tax profit fell from €16.7m for the same period in 2007 to 1.3m.
Pre-tax earning fell from €28.4m to €13.6m while revenue dropped by 9.3% to €193.6m.
Mr Ritter said the group "continued to show strong profitability in the Nordics and the Middle East" but profitability in Western Europe "suffered from a sharper market decline, the renovation of a number of hotels and the ramping up of newly opened hotels."
He added: "Industry revPAR is expected to continue to decline further in 2009.
"In order to meet an increasingly weaker market we have extended our existing cost cutting programme to a level of annual savings of around €30m and are constantly monitoring the need for additional reductions."