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Savoy blames terrorist attacks for drop in revenue

11 July 2018 by
Savoy blames terrorist attacks for drop in revenue

The Savoy has blamed last year's terrorist attacks for affecting its North America business and a resulting £1.1m drop in revenue.

Breezeroad, the holding company for the London hotel, reported revenue of £56.7m, down from £57.8m in 2016, in its financial results for the year ended 31 December 2017 filed with Companies House.

The report blames the five-red-AA-star, 267-bedroom property's proximity to the terrorist attacks in June 2017 for its decrease in revenue, hitting the hotel's North America business and occupancy levels.

The hotel reported net loss before tax of £13.2m, down from the previous year's losses of £13.4m, with operating profit at £4.6m, down from £5.3m.

Breezeroad director Benjamin Caldwell said the hotel "works closely" with security agencies to mitigate terrorist and security threats, adding the hotel has a "proactive procurement and recruitment strategy" to reduce the impact of increased costs and labour constraints resulting from the UK's impending European Union departure.

The hotel reported its revenue per available room (revpar) as £297, up on 2016's £295. Caldwell added the directors "expect continued growth in rate" this year due to the repositioning of the hotel.

Total income was made up of £28.9m from bedroom revenue, which remained flat on the previous year's £28.9m, while its restaurant business saw a slight decrease from £26.2m to £25.1m. Ancillary business operations made up the other £2.7m. However, Caldwell said it is believed the relaunch of the refurbished Simpsons in the Strand late last year will drive growth this year.

The results fall within the first full year of AccorHotels' ownership of the hotel, following its acquisition of FRHI Holdings in July 2016 for £554m from Qatar Investment Authority (QIA), Kingdom Holding Company (KHC) of Saudi Arabia and Oxford Properties, an Ontario Municipal Employees Retirement System (OMERS). FRHI is the parent company of Fairmont, Raffles and Swissôtel and the Savoy is operated by Fairmont.

The majority shareholder (59%) of Breezeroad is KHC, while the remaining 41% of shares is held by QIA.

Revenue at London's Savoy hotel is virtually flat at 0.2% >>

AccorHotels snaps up Fairmont, Raffles and Swissotel >>

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