Blackstone denies cost-cutting measures
BLACKSTONE, the US finance company which owns the Savoy Group, is to save $1m (£625,000) by pulling its 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 is considering selling any of the Savoy portfolio because of disappointing returns made on the Savoy hotel, for which the group paid £520m two years ago.
For 2000, it is forecasting operating profits for the Savoy Group of over £55m compared with £29m in 1997.
"This has not been through cost cutting but through growth of revpar (revenue per available room) and occupancy," said Ceriale.
The group has also earmarked £20m to spend on refurbishment of guest rooms at the Savoy and Connaught and the lobby at Claridges.