Baglioni says hotel sales down 20 pct
PARIS (Reuters) - Luxury hotel industry revenue is down around 20 percent so far this year as the global financial crisis bites particularly into business travel, Guido Polito, vice president of Baglioni Hotels, said on Monday.
"2009 is a difficult year for everybody ... we are averaging what our competitors are doing, so we are around 20 percent (below 2008) in terms of total revenue," he told the Reuters Global Luxury Summit in Paris by phone.
"We foresee an improvement starting from probably the middle of 2010," he added.
Polito, the son of company founder Roberto Polito, said the luxury hotels market in New York was down almost 30 percent and Dubai almost 40 percent while in Italy there were some places where revenue was down around 15 percent.
The family-owned luxury hotels group has 14 properties in countries including Italy, France and the UK.
Polito said projects to manage hotels in Budapest, Marrakesh, Dubai and Mumbai had all seen delays because of the global financial crisis.
"All the four new projects are new developments so all of them ... will be affected by the crisis, they will be somehow postponed," he said.
The group focuses on boutique hotels of 70-120 rooms that try to reflect the atmosphere of their location.
Polito said business travellers had reduced spending, with companies sending smaller groups for fewer nights.
Lead times for booking had shortened sharply, making forecasts for the full year very difficult, he said.
"The biggest change (for the industry) is the lead time of the booking process, everything is becoming more last-minute ... This is probably the biggest challenge," he said.
Occupancy rates for Baglioni are down around 15 percent year-to-date in 2009 from a year ago.
Baglioni Hotels have discounted room prices by as much as 30 percent for some non-refundable offers to help cash flow and inventory management, Polito said. He cited a best available rate down to 210 euros from 300 euros.
The company's turnover in 2008 was around 70 million euros ($96.8 million), compared with 76.9 million in 2007. Pre-tax profit was 5.2 million in 2008, Polito said.
Private equity fund Sator agreed to take a 40 percent stake in the company last year. Polito said financial details of the investment were still being discussed.
($1=.7230 Euro)
