Kempinski expects downturn to last for most of the year

German group Kempinski Hotels and Resorts has experienced a difficult start to 2001. In its annual report for 2000 it said it had not been pleased with the first five months of this year.

It said it expected trading to recover slightly in the coming months, but added: "The overall results from the previous year are not predicted to be attained."

Last year the company's profits increased to DM45.8m (£14.28m), compared with DM1.4m (£440,000) in 1999.

Of this, DM38.6m (£12m) came from the sale of two of its German hotels: the Hotel Gravenbruch in Frankfurt and the Hotel Atlantic in Hamburg.

The sale of the two hotels, in May, resulted in a slight fall in the company's turnover.

It achieved sales of DM191m (£59.6m), compared with DM202m (£63m) in 1999.

Average occupancy increased to 72.6% (1999: 66.2%), while the average room rate jumped from DM340.72 (£106m) in 1999 to DM361.34 (£113m) last year.

Kempinski has more than 30 properties in Europe, the Middle East, Asia and Australasia.

It does not have a hotel in London but is looking for a suitable site (Caterer, 7 June, page 34).