Rezidor chain continues cost cutting

Hotel News - 12/02/2009

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The chain’s brands include Regent, Park Inn and Radisson SAS. It has said that it will continue its planned growth through franchises and fee-based management contracts in order to keep assets light.

In the group’s year-end report, the impact of the economic downturn on the European hotel market increased during the final quarter of last year, causing a double-digit drop in RevPAR (revenue per available room) throughout the industry.

“Industry RevPAR is expected to continue to decline further in 2009," Kurt Ritter, the president and CEO of Rezidor, said. "In order to meet an increasingly weaker market we have extended our existing cost cutting programme to a level of annual savings of around €30 million and are constantly monitoring the need for additional reductions.”

He went on to say: “Rezidor continues with the long term strategy to focus its growth on fee-based managed and franchised contracts to reduce risk in the portfolio.”

The hotel group opened 6,500 new rooms last year, of which over 93 per cent were fee-based.

“By the end of 2008 Rezidor had a contracted pipeline of more than 22,000 rooms out of which 88% were managed or franchised," the group’s executive added.

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