Malmaison and Hotel du Vin have experienced a drop in demand for both rooms and food and beverage since July.
Parent company MWB Holdings said that trading for the four months to November had been challenging as consumer confidence has been hit by the continuing economic uncertainty in the UK and the impact of the euro crisis.
The difficult trading conditions have occurred at a time when Malmaison and Hotel du Vin have competed the sale and leaseback of five hotels in London, Bimingham, Manchester, Newcastle and Aberdeen, for £102.9m. As a result, the group's borrowing has been reduced by around £100m to £180m, providing a more secure base for future growth.
While room occupancies have fallen, room rates have improved with revenue per available room in line with the prior year. Food and beverage revenues for the period were 2.8% below the equivalent period in 2010, but including the two new Bistro du Vins which opened earlier this year, was up 2.9%. Overall revenue for the four months was 1.5% ahead of last year.
Despite implementing several cost-cutting exercises, faced with a substantial increase in local authority rates across the country and general inflation, operation costs for the two hotel brands has increased by 4.3%.
Malmaison and Hotel du Vin are currently seeking a new chief executive following the announcement that Robert Cook will be leaving the company early in 2012. The group has 15 Hotel du Vins, 12 Malmaisons and two Bistro du Vins.
By Janet Harmer
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