p16 city feb27 25/2/09 09:53 Page 16
City & finance
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M&C delays
r
ench
e
Poer T
setting budget
Michael L
MILLENNIUM and Copthorne (M&C) will not set
budgets until after the first quarter of the year
because of the current economic climate.
The British hotel group’s chief executive,
Richard Hartman, said the move was not about
being pessimistic, but about “not knowing how
things will pan out”.
The move came as M&C reported RevPAR, a
measure of profitability, had fallen 21.2% in the
first five weeks of 2009. This followed a 7.6%
decline in the fourth quarter of 2008.
The company has frozen pay and recruitment,
and cut non-essential investment and its dividend.
Hartman described the moves as “prudent”.
He said: “There has just been a complete decel- West End hit Oliver! has boosted sales for subsidiary Superbreak as UK short breaks prove popular
eration of demand worldwide, led by the bank-
ing and finance sectors. The drop in corporate
meetings and group activities is serious.”
M&C has three hotels in New York, leaving it
Holidaybreak jobs
exposed to the downturn in the financial sector.
It has shut its US head office and a hotel in
Orlando, and further redundancies on top of the
300 already made are expected. Operating hit in £2m cutback
profits rose to £125.9m last year, but after fur-
ther costs were taken into account, profits fell
Rupert Murray.
people back into short breaks,
from £157.4 in 2007 to £102.8m in 2008. HOLIDAYBREAK has made £2m especially in the UK, which is a
worth of cuts to combat the market Michel believes will do
economic downturn. well this year.
Tui Travel blow as
In a move which managing He added: “Camping will not
director Carl Michel described be hard hit by the recession
Hapag sale falters
as “painful at times”, job cuts at and educational trips continue
Superbreak and Explore! were to do very well as they are a
among the measures taken. less discretionary spend and
REPORTS of further problems with Tui AG’s “We now have the right num- are always booked far in
proposed sale of its controlling stake in its ber of people and have no plans advance.”
Hapag-Lloyd shipping division led to a fall in Tui to lose any more – we will keep Carl Michel: “painful job cuts” The education division is 85%
Travel’s share price this week. an eye on things,” he explained. booked for 2009 and 15%
A consortium that had been lined up to buy Michel described current trading performance for 2010.
the stake for £3.9bn is thought to have encoun- as “creditable given an unsettled and unpre- Adventure travel is 61% booked, down from
tered problems raising the required cash. dictable consumer environment”. 72% due to the strength of the euro although
Tui AG was expected to use the cash to bid for The diversity of the four divisions which cover non-eurozone destinations such as Turkey are
the remaining stake in Tui Travel, of which it hotels, education, adventure and camping is key doing well.
currently owns 51%. to the company’s continuing success, according Michel concluded: “More than ever this year
Press reports have suggested an alternative to Michel. will be about providing unique products,
deal will see Tui AG retain a 49.9% stake in Hapag- He revealed that in general bookings were value for money and exceptional service to our
Lloyd as opposed to 33%, netting it just £1bn. coming in later than usual as customers were not customers.
On Monday Tui Travel’s share price on the Ftse feeling secure enough to book far in advance. “We will benefit from the strength of our well-
100 fell 8.5p to 228p. Hotel special offers were starting to encourage known and respected brands.”
16 27.02.2009
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