|May 1, 2006 - The Steigenberger Hotel Group has ended its financial
year 2005 with positive results. Despite continued market sluggishness
the Frankfurt-based company was able to increase both turnover and operating
profit. Average occupancy rates increased by 1.7 percent to 63 percent,
thereby reaching their highest levels since 1991. Yield was up 2.1 percent
or 1.01 Euros to 48.29 Euros.
|Once again, the Steigenberger Hotel
Group chose to focus on the core hotel trade in the latest financial year,
a strategy introduced in the wake of the company’s reorientation. The comprehensive
restructuring that took place in 2004 proved to be a sustainable foundation,
which brought success in the recent financial year. Far-reaching measures
were implemented in the newly segregated divisions, the organisational
structure and brand policy. The reduction of the portfolio from four to
two brands – Steigenberger Hotels and Resorts in the four and five star
segment and the mid-range concept of InterCityHotels – as well as the introduction
of three separate operative divisions had a positive effect on last year’s
results for the Steigenberger Hotel Group.
“We have set the course for long term, profitable growth. Our programme
for the future has proved its worth. The company is well equipped to face
future market developments,” stated Karl Anton Schattmaier, spokesman for
the board of Steigenberger Hotels AG, on the occasion of this year’s end
of year press conference in Frankfurt.
Karl Anton Schattmaier
Chief Executive Officer of the
Steigenberger Hotels AG
The hotel portfolio of the Steigenberger Group was reduced by one hotel
last year; the Bad-Hotel Zum Hirsch in Baden-Baden. Despite the reduction
in the year-round room availability the Group (Enterprise, Management and
Franchise operations) managed a slight 1.1 percent rise in room nights
to 2.93 million.
The Group’s turnover in the year under review, including franchise
operations, rose by 4.8 million Euros or 1 percent from 425 million Euros
to 429.8 million Euros. After portfolio adjustment, the increase in turnover
reached 2.4 percent.
In the core business, the hotel operations of the group saw an increase
in turnover of 6.1 million Euros to 334.8 million Euros, a rise of 1.9
percent. The City hotels made a significant contribution to this total
with an increased turnover of 6.5 million Euros and the InterCityHotels
saw a rise of 1.3 million Euros. The Resort hotels had to absorb a fall
in turnover to the tune of 1.7 million Euros. Following adjustments to
take account of the loss of the Gran Canaria hotel from the portfolio,
this division also saw a rise of 4.4 percent or 3.6 million Euros.
The GOP (Gross Operating Profit) of the hotel operations – the measure
of operative success in the Group – saw a total increase of 1.6 million
Euros. It rose from 93.9 million Euros or 28.6 percent of the turnover
to 95.5 million Euros (+1.7 %) or 28.5 percent of the turnover.
The City hotels improved the GOP by 2.7 million Euros (+5 %) to 56.7
million Euros, InterCityHotels held the previous year’s value with 22.4
million Euros while the Resort hotels, after the portfolio adjustment,
lost 1.1 million Euros (-6.3 %) in GOP.
The average occupancy rate rose by 1.7 percentage points from 61.3
percent to 63 percent. The City and Resort hotels increased their occupancy
by 1.7 percentage points (61.3 %) and 0.4 percentage points (60.4 %) respectively.
The utilisation of InterCityHotels, with an increase of 2.9 percentage
points, reached its best ever value of 67.5 percent.
The pressure on room prices as a result of the difficult economic situation
remained as high as ever in the 2005 financial year. The adjusted average
room revenue in the Steigenberger Hotel Group fell by 0.31 Euros to 76.88
Euros (previous year: 77.18 Euros). The various divisions achieved different
results: the Steigenberger City hotels were able to hold their average
rate of 93.42 Euros while the average price of the Resort hotels following
the portfolio adjustment dropped by one Euro to 80.57 Euros. InterCityHotels
had to face some aggressive competition in the mid-range segment. They
conceded 0.70 Euros in their average price and ended up at 52.17 Euros.
The yield (RevPar), the ratio of utilisation to average room rates,
underwent a positive change in comparison to the previous year. Significantly
improved utilisation levels across all divisions compensated for weaker
growth in room revenue. Yield rose by 2.1 percent or 1.01 Euros from 47.28
Euros to 48.29 Euros. After adjustment, yield rose by 1.15 Euros or 2.4
percent to 49.44 Euros.
The adjusted operating profit (EBIT) grew from 6.7 million Euros in
the previous year to 8.6 million Euros. As a result of the special costs
for restructuring and risk provisioning that fell in this financial year,
the company ended up with an annual surplus of 0.2 million Euros compared
to 3.1 million the previous year.
The strategic measures put in place in the 2005 financial year made
a significant contribution to this good result.
Sales improvements were a major focus. A Global Sales Structure was
introduced, tailored to looking after individual enterprises and major
customers at home and abroad. Against this background a Key Account System
was established, in which Global Key Account Managers work across the board
with current and potential new major customers in the different enterprises
and in international markets. The new sales direction focuses on the rapid
implementation of customer and market relevant activities.
Of great significance for the development of the company was and is
the investment programme announced a year ago, which started to be implemented
in 2005. 150 million Euros will be invested by 2008 in structural conservation
measures in the core hotel business. The aim of the building measures is
to secure the foundations for growth and income through the extensive remodelling
and modernisation of key hotels. In future these investments in competitiveness
will be clearly demonstrated in improvements in both income and the general
In preparation for this investment programme Steigenberger Hotels AG
has taken a major step forwards in terms of financial consolidation. Based
on an increased cash flow and an injection of funds from disinvestments,
the company’s net credit level of debt was significantly reduced from 23.8
million Euros (2004) to 3.4 million Euros by 31st December 2005.
One important step in the past year was the introduction of a redesigned
Corporate Identity. Under the slogan “Younger, Bolder, Fresher”, the Steigenberger
Hotel Group was newly launched and now has a modern and contemporary image.
Central to the newly developed CI is the strengthening of the umbrella
brand Steigenberger Hotel Group, as well as the promotion of Cross Selling
for the two brands Steigenberger Hotels and Resorts and InterCityHotels.
A look at the first quarter of 2006 shows that the Steigenberger Hotel
Group continues to show positive growth. The Group’s turnover rose by 5
million Euros to 86.3 million Euros compared to the same period last year
(last year: 81.3 million Euros). The rate has increased by 1.18 Euros to
81.03 Euros and the yield has increased by 1.73 Euros to 46.35 Euros.
The Steigenberger Hotel Group considers itself to be well equipped
for the future with its new strategies that have been designed to suit
changing market conditions.
This year the company has already come one step closer to achieving
its declared goal of systematic expansion in key locations. March saw the
opening of the Steigenberger Hotel Therme Meran, with interior design by
the Italian designer Matteo Thun. It is the first Steigenberger Hotel in
This was followed in early April by the opening of the Steigenberger
Hotel de Saxe opposite the Frauenkirche in Dresden. At the beginning of
June the Steigenberger Strandhotel in Zingst on the Baltic Coast is due
to open, followed in the autumn by the Steigenberger Al Dau Resort Red
Sea in Egypt. In 2007, plans are currently underway to open InterCityHotels
in Dresden, Essen and Mainz then in 2008 a Steigenberger Resort Hotel will
be opening on the North Sea island of Norderney.
The Steigenberger Hotel Group currently operates 78 hotels under the
brand names Steigenberger Hotels and Resorts and InterCityHotels in Germany,
Austria, Switzerland, Italy, the Netherlands and Egypt.