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UK performance pegs back Hilton

01 September 2005
UK performance pegs back Hilton

Lacklustre performance in Hilton's UK hotel operation, which has seen a change in top-line management, failed to dampen the group's results.

Figures for the six months to June 2005 showed UK and Ireland profits fell by 22.6% to £30.1m. The group's overall profit before tax was £192.1m, just up from £191.3m for the same period last year.

Worldwide revenue per available room (revpar) was up 8.4% to £47.14, but was stifled in the UK market, increasing by only 2.1% to £61.75.

The results come a month after a global strategic management restructure within Hilton, where Howard Friedman became president of its UK and Ireland division, replacing Wolfgang Neumann, who moved to take on Europe and Africa.

However, a strong performance in other parts of the globe helped the group's hotel division, with overall profit in Europe and Africa up on the year by 55% to £31.3m and profits in the Americas soaring by 43.4% to £10.9m.

David Michels, Hilton's group chief executive, said that the UK market was performing better in the second half of the year, despite the bombings in London, which had affected bookings since 7 July.

He said occupancy at Hilton's 13 London properties fell by 2.5% since the first attack on the capital, compared with a year before, and he believed the attacks had a bigger impact on bookings from British tourists than overseas visitors. The disposal programme was making "good progress" after seven UK hotel sales completed for 79m, while a further 18 remain on the market.

Michels added that the group remained committed to expanding its Hilton, Scandic and Conrad brands. In the last six months Hilton has signed 16 franchise and management contracts for Hiltons in Argentina, China and the Bahamas.

Hotel consultant Melvin Gold said the UK and London results were disappointing and lagged behind market performance.

"The company has made more positive comments about its second half-year UK trading, despite the bombings in London, which will be watched with interest."

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