23 April 2008

Rezidor reports strong first quarter

Rezidor has reported a strong first quarter in 2008, despite a slowdown in the economy.

It said after adjusting for the negative impact of the early Easter break, the group showed a robust development of both revenue and EBITDA, compared to the first quarter of last year.

"As RezidorÃ¢â¬â¢s revenue is strongly driven by business guests in the Nordics and the rest of Western Europe we were heavily impacted by the Easter holidays, as foreseen," said president and CEO Kurt Ritter.

"RezidorÃ¢â¬â¢s markets are in Western and Northern Europe as well as the emerging markets in Eastern Europe and the Middle East, where the economic activity has been relatively strong.

"Despite slowing activity in the US and fear of a global slow-down, the hotel industry in our markets continued to grow in the beginning of the year."

He said in order to secure profitable growth, Rezidor would continue to focus on expanding through fee-based contracts.

In the first quarter of this year, it opened 1,000 new rooms, all of them under managed or franchised fee-based contracts.

"We are aware of the turmoil on the financial markets and the continued uncertainties surrounding the global economy, which make it difficult to predict the market outlook for 2008,"Ritter added.

"We are confident of achieving our target of adding 20,000 rooms to operations from 2007 to year-end 2009, and believe that the ongoing shift in our business model driven by more fee based revenue will continue to support our EBITDA margin target."

By:Bev Fearis