De Vere reaps benefit of firm stand on rates

17 January 2003 by
De Vere reaps benefit of firm stand on rates

A policy of holding firm on room rates despite difficult market conditions has paid off for hotel group De Vere, the company claims.

Chief executive Paul Dermody said he was glad that De Vere had stuck to its policy and not cut room rates, even though this had led to a slight dip in occupancy. "We could have moved the price, but it would have been at the detriment to the brand," he said as De Vere unveiled its financial results for the year to the end of September.

The company recorded a 7.3% increase in turnover on operations to £293.9m, against £273.8m for the same period a year earlier. Pre-tax profit increased by 15% to £38.5m, up from the 2001 figure of £33.5m before exceptional charges. Turnover at the group's 21 De Vere-branded hotels increased by 1.8% to £177.8m, against £174.7m a year earlier.

Occupancy fell by 0.9 percentage points to 74.1%, while average room rate increased by 2.6% to £80.36. As a result, revenue per available room (revpar) increased by 1.4% to £59.58.

Turnover at De Vere's 14 Village hotels increased by 13.2% to £64.2m during the period, compared with £56.7m in 2001. Occupancy fell by 1.8 percentage points to 79.2%. Average room rate increased by 3.1% to £51.25, leading to a 0.7% increase in revpar to £40.59.

Chairman Peter Daresbury said: "We are pleased with recent trading, although we remain cautious about extrapolating a trend because of the nature of the comparative figures."

He added: "The outlook is still uncertain, with the extent and timing of recovery remaining difficult to predict. However, we have confidence that our brands will continue to outperform the market."

by Samantha McClary

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