Comparable income per available room (RevPar) grew by 1.1% in the first quarter and 4.9% in the accumulated amount to April .A strong increase in occupancy, 10.9%, with increases in all of the markets where the Company is operating. Operating costs are maintained constant, absorbing the increase in activity. Sale of assets generates a capital gain of €15.5M, which is offset against a loss of €12.6M in currency conversion . NH Hoteles reduces its net losses by 20% in the first quarter of 2010, 31% before taxes and interest of minority shareholders.
The negative environment that the sector suffered in the financial year 2009 demonstrated positive progress in the first months of 2010. Thus, the income from the hotel business grew by 1.3%, as a consequence of an increase in the occupancy in all of the markets where the Company is operating. The increase in the levels of occupancy, of 10.9% in comparable hotels, enabled the RevPar (the ratio that measures the income by available rooms) to achieve 1.1% growth. A significantly more favourable improvement can be observed at April 30, once the effect of the Easter schedule has been included, with a 4.9% increase in the comparable RevPar. Amongst the initiatives of the rationalisation and asset de-investment plan that the Company set underway last year, we can highlight the sale of four hotels during the first months of 2010. These sales represent a cash inflow of €117M for the Group.
In February this year NH Hoteles reached an agreement to sell 3 hotels owned by NH that are being operated under franchise agreements with the Hilton brand. The Mexican establishments that are the subject of the sale were the Hilton Guadalajara hotel with 450 rooms, the Hilton Garden Inn Monterrey with 150 rooms and the Hilton Garden Inn, Ciudad Juarez, with 120 rooms. This operation has generated a capital gain of €15.5M in the profit and loss account of NH Hoteles of the first quarter, which is offset against a loss of €12.6M owing to the differences caused by currency conversion.
In addition to the sale of the Mexican hotels portfolio, NH Hoteles announced the agreement to sell the St Ermin’s hotel in London for €75M at the end of April. On the other hand, NH Hoteles has cancelled contracts with a further 7 hotels in the first quarter of 2010 within its plan for managing non-profitable and/or non-strategic assets. (We attach a table of assets cancelled at the end of the note). The following table shows the main figures of the NH Hoteles Group at March 31, 2010:
Hotel Activity by Business Unit
In spite of the fact that the fall in average prices in Spain and Portugal continues taking place as a result of the negative RevPar for the quarter, the result has been positive since the month of March. It is worth pointing out the increase in weekend sales. We can point to the good pattern that locations such as Barcelona and Madrid are demonstrating, with occupancy increases of greater than 20%.
Italy displays a significant increase of 6.48% in the comparable RevPar, notably in Rome (+34.9%) and Turin (+56.3%), where corporate client activity is growing and sales are increasing, above all at weekends.
The rises in occupancy of Benelux, together with the slowing down of the fall in average prices have the result of a constant RevPar in the first quarter, positive if we include April. The increase in income is taking place on business days, above all, thanks to the increase in activity generated by business clients. We can highlight the recovery of Amsterdam, with growth in occupancy of greater than 20%.
The increase in occupancy and the maintaining of the prices in Germany are being translated into an increase in the income per available room of 7.81%, 15.86% if we include the month of April. We highlight greater activity in the congresses and conventions sector, as well as events in cities such as Berlin.
In Central and Eastern Europe we highlight the positive evolution of Austria, thanks to increased demand from leisure clients and to improvements in the conventions segment in Vienna. In Switzerland, with the exception of Geneva, with some positive results, the rest of the country is suffering the pressure of intense competition, associated with a level of company clients that is not very active.
The countries of the South American showed uneven distribution. While Argentina reflected an increase in comparable occupancy of greater than 20%, countries such as Mexico are falling back in terms of occupancy in spite of the fact that the average prices of the country are being assisted by the Peso/Euro exchange rate.
Real Estate Activity
Income from real estate activity reached €2.6M as compared to the €6.2M for the same period from the previous year. The reduction in sales can be explained due to the lower level of formalisation of deeds of sale in this 2010 period. At March 31, 2010 Sotogrande has certain sales committed to, pending accounting, for the sum of €7.6M
Client satisfaction
NH Hoteles continues measuring the satisfaction of its clients in order to assess the Group’s quality standards and discovering area for improvement. The purpose of the client survey is to attain the following objectives:
• Improve the experience of the clients by means of continuous improvement of the service provided at the hotels and through the products.
• Respond to the incidents and comments of our clients offering effective solutions.
The weekly survey measures different categories of the level of satisfaction of our clients: reservations, check in, cleaning of rooms and common parts, equipment and maintenance, breakfast, check out, room service and hotel staff.
Results of the client survey in the first quarter of 2010:
The client satisfaction of NH Hoteles continues increasing and it attains a score of 8.43 out of a maximum of 10 points in September of this year.
The Environment – Consumption and emissions
The environment is considered to be a strategic interest group by NH Hoteles. The Company bases its focus on an ecological approach that delivers sustainability throughout the business cycle, from planning, design and construction tasks of the hotels and their everyday functioning and the service provided to the clients.
In 2008, the 2008-2012 Sustainability and Energy Efficiency Strategic Plan was launched, which is based upon determining what is the impact of the chain on the environment and setting goals for reducing energy, water and CO2 emissions consumption and waste generation. This Plan enables the chain to get ahead of the objective of the 20-20-20 Plan of the European Union in four years.
The client/night ratios show a fall in consumption, due to the savings initiated implemented during this period. The following results are general, obtained by the Company at their urban hotels managed under an ownership and rental regime, during the first quarter of 2010 and as compared to the same period of 2009:
*Consolidated urban hotels
The total savings in the measurement of the production of waste will be published on an annual basis.
Cancellation of contracts
The contracts cancelled during the first quarter of 2010 are:
ABOUT NH HOTELES
NH Hoteles (www.nh-hotels.com) ranks third among European business hotels. NH Hoteles currently has 394 hotels with 58.982 rooms in 25 countries in Europe, America and Africa. NH Hoteles has at present 35 new projects for hotels under construction, which will provide 6,000 new rooms.NH Hoteles stands out in quality both as regards services and facilities, with very carefully thought out decoration, intended to please all tastes and making the guest feel comfortable. NH Hoteles’ establishments offer the most advanced technologies designed to facilitate the guest’s communication as well as his work and leisure.
The restaurants are another priority for hotels in the Chain, offering guest first-rate cuisine. Furthermore, the prestigious restaurateur Ferran Adrià, creator of El Bulli restaurant, has entered into an association with NH Hoteles, launching new concepts such as “nhube” and “Fast Good”, pioneering spaces in the hotel sector.NH Hoteles is a responsible company in the Tourism industry. The Chain offer hotel services which anticipate present and future needs of both our internal and external stakeholders (Employees, Clients, Shareholders, Suppliers, Environment, etc.), the communities where we operate and future generations with maximum attention to detail and efficient and sustainable solutions.
