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De Vere sees profit rise by almost 18%

by Andrew Sangster

A gradual rise in the number of business customers and better targeting of the leisure market has helped De Vere Hotels boost UK operating profits by 17.7% to £19.8m.

Preliminary financial results for the Greenalls Group, announced last week, showed De Vere’s 26 UK hotels produced a turnover of £97m for the 53 weeks to 30 September 1994 – up 10% on last year.

Deputy chairman Paul Dermody told Caterer: “The two key factors have been the slow increase in the business market and our success in being able to recognise what leisure customers want.”

Achieved room rates increased 5.9% to £47, occupancy was up one percentage point to 68% and revenue per available room was up 7.1% to £32.

De Vere is concentrating on its 16 four- and five-star hotels, which offer 2,397 bedrooms in total. Six of the 10 three-star properties are up for sale, including three unbranded hotels representing a further 826 bedrooms.

“The lodge market is squeezing out the three-star hotels,” said Mr Dermody.

Over the past three years, De Vere has opened three hotels, the latest being the 172-bedroom Grand Harbour hotel in Southampton in September.

No new hotels are planned for next year although the Belfry at Wishaw, Warwickshire, is adding a third golf course and a new building to accommodate a Professional Golfers’ Association academy.

“The key factors in the hotel market are still the demand for value for money and short lead times with bookings,” added Mr Dermody.

The Greenalls Group’s US hotels traded ahead of expectations, with profits soaring from £145,000 last year to £768,000 this year.

Greenalls’ Premier Lodges, part of the Premier House branded pub-restaurant and lodge division, improved occupancy by 10 percentage points to 66%. Achieved room rates were up £2 to £28.

The lodges benefited from the setting up of a central reservation system shared with De Vere, although each brand has its own dedicated lines.

“Where there are synergies between hotels and lodges we will share management skills,” said Mr Dermody. Apart from a few areas, such as reservations and food purchasing, the brands would be kept distinct, he added.

Operating profits at Premier House were up 56.8% to £16.4m on a turnover up 44.8% to £80.7m. Excluding the Devenish acquisition, operating profits were up 35.4%.

Food sales increased 13.9% across the division. A further 12 Millers Kitchen pub-restaurants were added during the year, bringing the total to 70.

Pre-tax profits for the Greenalls Group as a whole were up 30.1% to £88.2m on a turnover up 22.5% to £716.2m.

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