Rezidor increased room stock, faced revenue downturn in H1 2016

Rezidor Hotel Group signed more than 2,500 rooms during the second quarter of 2016 and opened more than 1,400 rooms, for a total of 80,000 rooms open. 

The new signings are in line with Rezidor's asset-light and fee-driven strategy for growth.  

Elie Younes, EVP & CDO at Rezidor, described the second quarter as “particularly successful in Africa, one of our core growth markets. In Lagos, Nigeria, we signed the first Quorvus Collection member on the continent, and in Mauritius the first Park Inn by Radisson on the Indian Ocean.”

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Over the course of the period the company entered Morocco with the launch of the Radisson Blu hotel in Marrakech, and inaugurated a flagship in Togo: The Radisson Blu Hotel du 2 Février in Lomé is the tallest building in West Africa. 

“Blu is not only Europe’s largest upper-upscale brand but also Africa’s fastest-growing brand," Younes said. "We are committed to the continent and will continue to expand our network in line with our clear strategy, covering capital cities and selected hubs across Africa.” 

Good News, Bad News

The news came shortly before the company reported a fall in half-year revenue and earnings before interest, taxes, depreciation and amortization, citing “the challenging external environment.” 

For the half-year, revenue fell 2.8 percent to €466.8 million. On a like-for-like basis, revenue increased 2.7 percent. The fall was mainly due to the strengthening of the euro and the conversion of a leased hotel in Sweden to franchise. EBITDA fell from €32.8 million to €27.2 million, and the EBITDA margin decreased by one percentage point to 5.8 percent.

“Despite the challenging external environment in some EMEA destinations, Rezidor expanded the EBITDA margin by 1.3 percentage points to 14 percent versus last year and continued to gain market share," Rezidor Hotel Group President & CEO Wolfgang Neumann said. "Like-for-like [revenue per available room] increased by 4 percent and good flow through was achieved, especially in the leased portfolio. 

“The depressed oil price continued to affect key markets like Norway, as well as markets such as Saudi Arabia, Russia and Nigeria. Belgium entered into a downturn following the terror attacks in March and France continued to be weak, as well as other important leisure destinations like Turkey. On the other hand, Sweden, Denmark, Germany and Ireland posted good performances.”

RevPAR across Europe was up 2.8 percent (at constant exchange rates) for the first half, with improvement driven both by room rate—up 2.2 percent—and occupancy, which rose 0.7 percent. The RevPAR development in the mature Western European markets, 1.1 percent, was mainly via room rate growth of 0.9 percent. All key markets experienced positive growth, with the exceptions of France—which fell 9.3 percent—and Belgium, which was down 13.6 percent. Both declines can be attributed to terror attacks.

Eastern Europe reported the strongest RevPAR growth of 13 percent, driven both by a room rate increase of 7.4 percent and occupancy growth of 5.3 percent. The key drivers were Russia, up 20.8 percent, and Poland, which rose 12.1 percent. 

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