Blackstone denies cost cutting

Blackstone, the US finance company that owns the Savoy Group, is to save $1m (£625,000) by removing the group's business from the Leading Hotels marketing, sales and reservations scheme.

But John Ceriale, managing director of Blackstone, has denied that the decision to withdraw its five hotels was part of a cost-cutting exercise.

Ceriale said that the group had developed its own reservations system and felt that Leading Hotels was moving more towards a marketing consortium.

"We have a strong brand; we are not interested in being known as Leading Hotels," he said.

Ceriale also denied that Blackstone was considering selling any of the Savoy portfolio because of disappointing returns made on the Savoy group, for which the group paid £520m two years ago.

For 2000, it is forecasting operating profits of more than £55m, compared with £29m in 1997.

"This has not been through cost-cutting but through growth of revpar (revenue per available room) and occupancy," Ceriale said.

The group has also earmarked £20m to spend on refurbishment of guest rooms at the Savoy and the Connaught and the lobby at Claridge's.