Six Continents plans vanishing act

Teletext  -   Hotels and pubs group Six Continents has confirmed its hotels arm will be renamed InterContinental Hotels Group after the forthcoming demerger.

It has already announced Mitchells & Butlers will be the new name for its pubs and restaurants business which includes the All Bar One chain.

Separation costs will total £109m. The Six Continents name, which replaced Bass in June 2001, will disappear.

The group plans a shareholder meeting on March 12 and expects trading in both InterContinental Hotels and Mitchells & Butlers to begin April 15.

Investors will receive 50 IHG and 50 MAB shares for every 59 Six Continents shares held.

Six Continents will also bring forward its final interim dividend of 6.6p per share for the period prior to the separation from July 31 to April 9.

The group's chief executive, Tim Clarke, will hold the same position at Mitchells & Butlers and Roger Carr, a senior non-executive director, will be chairman.

The group's chairman, Sir Ian Prosser, will hold the same position at InterContinental Hotels while Richard North, group finance director, will become its chief executive.

The listing particulars for the two new groups indicated that cost saving initiatives would be pursued, although no specific job cuts were detailed.

Horwath International Presents Its 2002 Worldwide Hotel Industry Study - Shows Average Occupancy Down 4.1% point compared to 2001

Horwath International is pleased to present the 2002 Worldwide Hotel Industry Study. As is the tradition for more than three decades, this study presents detailed financial, marketing and operating trends for full-service hotels in various regions and segments of the worldwide hotel industry. The cooperation between the International Hotel & Restaurants Association, Smith Travel Research and Horwath International made it possible to utilize approximately 700,000 rooms worldwide in this publication.

WORLDWIDE RESULTS

The worldwide hotel industry experienced an average occupancy rate of 63.5% in 2001, a decrease of 4.1% point compared to the prior year. This decrease is basically attributed to the dramatic impact of September 11th terrorist attacks. Still, the average daily room rate worldwide decreased only slightly, from US$ 91.77 in 2000 to US$ 91.62 in 2001. As a result of the decreased occupancies, the annual RevPAR (Revenue Per Available Room) also decreased, from US$ 38,872 to US$ 35,320. Since costs did not decrease with revenues, the income before fixed charges expressed as a percentage of total revenues decreased from 33.2% to 29.0%. Expressed in US$ per room, IBFC dropped by more than 20%, down to US$ 10,256 in 2001.

COMPARISON BY REGION

While all regions of the world were confronted with decreased occupancy rates in 2001, some were hit harder than others. The strongest decreases were seen in South America (8.1%), Asia (6.8%) and North America (6.3%). Other regions fared slightly better, with Africa and the Middle East suffering a decline of 4.4%, Europe dropping 1.9% and Australia and New Zealand dropping only 1.8%.

As a result of the strong decline in Asia, hotels in Australia and New Zealand can now claim the highest occupancies, at an average 67.2%. South America sees its occupancies drop even further below those in other regions, now dangling at 50.6%.

Average daily rates comparisons show different results, with increases in South America and Europe, and decreases in all other regions. The strongest decrease in ADR was seen in Australia and New Zealand, where it dropped from US$ 85.08 to US$ 74.69. Highest ADR's worldwide are still achieved in North America (US$ 104.47).

Combining the results for occupancy and average daily rate, we can conclude that hotels in Europe were best able to withstand the downturn in the hotel industry, with only a slight drop in occupancies and a strong increase in ADR. As a result, the RevPAR in European hotels actually increased by 8.3%, while it decreased in all other regions. The strongest decrease was in Australia and New Zealand, where the strong decrease in ADR resulted in a drop in RevPAR of 14.5%.

COMPARISON BY COUNTRY

According to the results of the Worldwide Hotel Study, the most profitable place to operate a hotel appears to be Hawaii. With an average occupancy of 72.1% and an ADR of no less than US$ 198.41, hotels here easily outperform all other areas. The lowest results are achieved in Hungary, where occupancy is 54.7% but ADR is as low as US$ 34.20. Highest overall occupancies are achieved in Hong Kong: 78.5%.

About Horwath:

Horwath International is an integrated professional organization of accounting and management consulting firms. Horwath International has more than 110 member and correspondent firms with 415 offices in 280 cities throughout the world. For more information on Horwath International and the Worldwide Hotel Industry Study, please visit www.horwath.com 

The Importance of Project Management in Technology

Written By:  Chris Hartmann   HVS International

Project Management in a technology context is sometimes perceived as a frightening phrase to hoteliers who associate it with complex software and a huge bureaucracy.  Yet in hospitality technology, “project management” can and should be employed for everything from ongoing staff training to purchasing and installing a new computer system.

At its simplest, project management is a list of steps needed to accomplish a project, a timeline for each step, a person to coordinate and monitor the status of the project, and some documentation to communicate to participants and stakeholders.  One frequently made mistake is the assumption that for technology projects, the project manager should be an IT specialist or other technical resource.  Unfortunately, a good technical person is not necessarily a good administrative person – and project management demands strong organizational skills. 

In addition, the technical specialists on a technology project are often heavily involved in executing various project steps.  Ideally, the project manager is someone who is not spending a lot of time doing the work but primarily tracking the work that others do.  This does not require that they are full-time project managers but that the projects they are managing are not those in which they also heavily participate.  Perceived objectivity and the need for “clout” are also very relevant.  Most projects require people from various departments and skill sets to work together.  When cooperation is lacking from one area, the project manager must be able to enlist the help of a manager to move forward.  If the project manager is perceived as having a vested interest in “getting someone else to do the work” or “avoiding blame or responsibility”, the project will be worse off than if it remained unmanaged.

So what are the qualifications for a technology project manager? 

·     As mentioned above, they should not have a substantial role in completing the project deliverables. 

·     They should have enough “free time” to actually manage the project, hold frequent status meetings, answer questions, revise timelines and find alternate resources when necessary. 

·     They should understand the basics of the project they are managing, including the technology and the use within the hotel, but again, they do not need to be a technology expert. 

·     They need to have exceptional people skills.  They will be the sounding board for everyone from project participants to ultimate beneficiaries.  This requires good listening skills, the ability to diffuse issues, find solutions and then ensure that the project continues to move forward. 

·     They must have access to and the confidence of the managers of all the departments significantly involved in the project, either directly or through their own chain of command.

·     They must be and must be perceived as, fair and objective, not only by the project team, but also by any third-party suppliers and project participants.

·     They must feel personally responsible for seeing the project succeed – as should all of the participants.

This last point is the most overlooked and yet most critical point to any project and within any industry.  If any member of a project team is allowed to divorce him or herself from the ultimate success or failure of the project, it’s guaranteed that the project will take much longer, cost much more and likely ultimately fail.  The reason is simple – Every project has problems and rough spots.  

The way over those is to have the entire team focused on their elimination.  If one member or group feels they can avoid responsibility and in so doing avoid a risk of failure, they will do so.  That’s not a “bad” employee, it’s human nature.  If there’s a participant who can’t be tied to the final outcome they should be removed from the project and replaced with someone who can.  This is yet another role of the project manager and another reason why people skills are more important that technical skills, no matter how technical the project.

Hopefully it’s clear from all of the above why a project manager supplied by the technology supplier, is generally worse even than using an internal technology person.  No matter how objective that person is, they will never be perceived as objective by the team or the management.  Of course they are unlikely to be objective anyway since their loyalty lies with their employer, not the hotel. In addition, when the project is complete and the supplier gone, all the information learned by the project manager goes out the door with him or her.

Only a project of one person AND a duration of less than a month AND with little impact on overall operations is a candidate for no project manager.  The actual process and tools of project management are beyond the scope of this article, but small projects can be managed with a spreadsheet or word processor while the largest may use manual and software based tools for scheduling, tracking and managing complex dependencies for each project step.  There is an excellent website with free project management help (also providing “bulk downloads” for a nominal fee) called Ten Step (www.tenstep.com). 

My final recommendation on project management is that no matter how large or small, or what tools are used for project management, each step, decision, problem, resolution and design element be recorded and stored because at some point (usually many years later when most or all of the participants are gone), the question of “Why the heck was it done this way?” will arise and if the answer isn’t available, you’ll risk of wasting a lot of time making the same mistakes again.

Chris Hartmann
HVS Technology Strategies
420 Boulevard, Suite 203,
Mountain Lakes, NJ 07046
973-335-0871 phone/fax

China's 1st Overseas-funded Top Hotel Turns State-owned

The ownership of the White Swan, China's first modern hotel funded by overseas capital, has been taken over by south China's Guangdong Province, after the hotel celebrated its 20th anniversary.

The ownership of the White Swan, China's first modern hotel funded by overseas capital, has been taken over by south China's Guangdong Province, after the hotel celebrated its 20th anniversary. 

Its 20-year management contract with Hong Kong investor Henry Ying Tung Fok expired last week. 

Established in 1983 by Fok and Guangdong Province, the five-star hotel has received nearly eight million guests, including more than 180 foreign heads of state. 

It had recorded business turnover of 5.3 billion yuan (640 million US dollars) and paid 500 million yuan (60 million US dollars) in taxes to the state by the end of 2002. 

Fok will cooperate with Guangdong Province in running White Swan via a hotel management company. 

"White Swan has not only been a modern hotel today but also a national brand name in China," said Fok.

BC Tourism Sees Positive Gains

e-Turbo.com  -  International overnight customs entries to BC continued to grow with a 9.1 per cent increase in November, reflecting a 2.1 per cent increase year-to- date compared to the same period last year to total nearly 4.8 million entries. The large size of the US market, which accounted for 73.5 per cent of all overnight customs entries to BC, contributed to the overall growth in November. Overnight entries from the US increased 5.0 per cent over November 2001 and exhibited an increase of 1.8 per cent relative to November 2000. November's increase marked the sixth continuous month of positive growth in overnight entries from the US. Year-to-date figures indicate an increase of 4.1 per cent over 2001, and a 4.8 per cent increase over 2000, to total more than 3.5 million entries.

Mexico, an emerging market, posted an increase of 23.5 per cent compared to November 2001 to a total of 1,650 entries. Year-to-date, however, customs entries from Mexico decreased 6.0 per cent to 44,109. Travel from the Asia/Pacific region showed strong growth with the number of overnight customs entries rising by 29.1 per cent over November 2001, but decreasing by 6.4 per cent compared to 2000. Japan, China and Taiwan, three of the largest Asia/Pacific markets, exhibited increases of 39.3 per cent, 34.7 per cent and 60.2 per cent in November compared to the same month in 2001. Year-to-date, customs entries from Asia/Pacific increased 2.4 per cent compared with the same period in 2001, but showed a slight decrease of 1.0 per cent relative to 2000 to total 808,971 entries. "These figures strongly suggest that BC's reputation as a favoured travel destination is helping the industry return to the kind of growth patterns experienced prior to September 11th," said Mike Duggan, Tourism BC chair. "We're pleased to see signs of recovery from the UK, and hopeful that the German market will rebound in the upcoming months."

Overnight customs entries from Europe increased 8.4 per cent to 15,625 in November compared to the same month last year, and posted an increase of 9.5 per cent relative to November 2000. Customs entries from the UK, BC's largest European market, accounted for nearly half of the overnight customs entries from Europe and totalled 7,525 - a 9.0 per cent increase over November 2001. Overnight customs entries from Germany dropped 24.2 per cent while entries from the Netherlands rose 26.0 per cent. Year-to-date, customs entries from Europe totalled 376,241 - a decrease of 12.1 per cent compared with the same period in 2001, and a 17.8 per cent decrease over 2000

Overnight customs entries are non-residents entering Canada, recorded by the province of entry. Data is prepared and distributed by Statistics Canada and compiled monthly by Tourism BC. This information serves as one of the key indicators of tourism for the province. Additional data is available from Tourism BC at various times throughout the year, including revenue estimates and annual summaries. Tourism BC is an independent Crown corporation that operates under the direction of an industry-led board of directors and is responsible for marketing Super, Natural British Columbia to the world.

Group Tourists to Macao Increase in 2002

Tourist arrivals in Macao by groups soared a year-on-year 31.1 percent in 2002, led by the huge influx of visitors from China's inland. The Statistics and Census Services said Wednesday that the special administrative region (SAR) received 2.1 million group tourists last year, including December's 178,800.

An upgraded tourism image of Macao -- paired with China's interior loosening restrictions on Macao-bound tours, mainly by allowing much more travel agencies to operate the tours -- was a boon to the SAR's tourism industry, local tourism authorities have noted. Group tourists from the country's inland alone reached 134,800 in December, making the place the largest tourist provider for Macao, followed by Taiwan, Japan and Hong Kong.

As a result, hotels posted an occupancy rate of as much as 73.8 percent that month, up 6.8 percentage points from a year earlier, with three-star hotels recording the best performance.

On the other hand, the number of Macao residents traveling overseas in group declined 15.9 percent to 16,700, out of a population of roughly 450,000. China's inland remained the most popular destination for them, seeing the arrival of 75.8 percent of all the outbound tourists.

Middle East hotel occupancy 61 per cent in 2002

Meed.com -  Hotel occupancy in the Middle East reached 61 per cent in 2002, up from 58 per cent in 2001, according to the annual Hotelbenchmark survey by Deloitte & Touche. The average cost of a hotel room fell 4.6 per cent to $82, as hotels cut their prices to tempt back tourists after the slump that followed the 11 September terrorist attacks.

The drop in prices recorded in both 2001 and 2002 was also attributed to the increasing supply, as new tourist developments came on stream. Tourists began returning to the region from the early months of 2002, with Dubai performing best, attracting 24 per cent more visitors in the first quarter of 2002 than in the same period the previous year

However, governments across the Middle East fear that the industry will see a renewed downturn in the event of a US-led war on Iraq.

Proxy Statements – How to read them and what to look for

Part 1 of 2   -  Written By:  David Mansbach     HVS International

Every year, public companies are required by the Securities and Exchange Commission to “open up their books” to the public.  One of the key reports released is the proxy statement.  Most people perceive this document to be extremely confusing.  Yes, there are some parts of the proxy that seem to be written in Greek, but there are many parts that can and should be understood by the potential investor, shareholder and employee of a company. 

The Summary Compensation Table

An important section to understand is the Summary Compensation Table (see sample below).  This table details all of the components of pay for the CEO, the four other highest - paid executives (earning more than $100K in cash compensation), and up to two additional executives who have left the company but would have been among the top earners.  Base Salary, Bonus, Other Annual Compensation, Long-Term Compensation (including Restricted Stock Awards1, Securities Underlying Options/SARs2, Deferred Compensation3) and finally All Other Compensation information is included.  Since the compensation table offers a three -year history of compensation, you can compare past salaries to see who received a raise, and by how much.  It is also a good idea to read the fine print in the footnotes- if an officer has been with the company for less than a full fiscal year, remember to annualize the compensation package accordingly. 

Review the bonus data against company performance.  Bonuses should vary according to quantitative measures such as growth in revenue, EBITA, net earnings, and so forth.  If a CEO’s bonus is paid without corresponding performance increases, it’s a red flag that pay and performance are not aligned.  The Long-Term Compensation pieces should be tied to performance as well. 

Sample summary compensation table

 1 Restricted Stock Award – A plan in which stock is given ( or sold at a discount) to an executive, who is restricted from selling or transferring it for a specified period (usually four to five years).  The executive receives dividends, but must forfeit the stock if s/he terminates before the restriction period ends.

2 (SAR) Stock Appreciation Rights – An executive incentive plan in which the corporation grants an executive the right to receive a dollar amount of value equal to the future appreciation of its stock, often in lieu of the executive exercising a stock option.  An SAR typically is granted as a companion (in tandem) to a stock option, and the executive must surrender a matched number of option shares to “cash-in” the SAR. 

3 Deferred Compensation – Any of a number of compensation payments that are payable to an executive at some point in the future.  Many deferred compensation payments include contributions to pension fund annuities at the time of payment, and the annuity payments are sheltered from taxes until benefits begin. 

David Mansbach
Vice President
HVS Executive Search
372 Willis Avenue
Mineola, NY  11501
516-248-8828 Ext. 257
516-742-1905 Fax

Sur International Hotels launches sixth edition

Sur International Hotels, the largest private-owned hotel chain, opened their sixth addition, ‘Ras Al Hadd Beach Hotel’, officially on February 11, on the occasion of Eid Al Adha. The grand opening is scheduled for March 3.

According to Sarfraz A. Sethi, director of operations, the new building is ready with 35 rooms with a choice of single, double and suite rooms with attached bath, A/C, TV with satellite channels, alarm clock-cum-radio, telephones, mini bar, room service, a multi-cuisine restaurant, fully-licensed bar, open barbeque area, and BBQ kits for guests.

According to Sethi, these facilities are exclusive in this area. Now tourists as well as the local citizens can have a comfortable stay whenever they visit Ras Al Hadd to watch the green turtles. It’s an ideal spot for the newly-wedded couples to have their honeymoon in a calm and quite atmosphere, where the first sunrise is seen in the whole of the Arabian Peninsula.

Sethi further announced that the hotel will not remove the present portacabins and this will be also offered to the public as per their requirement. Tourists can also use stopover facilities at Best Western Sur Beach Hotel at Sur, which is also owned by Sur International Hotels group. 

The value of a small group with a big name

TravelWeeklyEast.com   

In mid-January, Great Eagle International, the hotel operating and asset management arm of Great Eagle Holdings Hong Kong Ltd began operating under the Langham Hotels International (LHI) name. Kevin Murphy, vice president marketing and development for Langham Hotels International tells Jennifer Welker the value of the name change, Langham’s mission and the advantages of being small.

The Langham name matches what the seven, and soon to be eight, Great Eagle properties are throughout the world: medium-sized, high quality hotels, says Kevin Murphy, vice president marketing and development of Langham Hotels International.

“Through this brand we can offer a high level of management expertise. It offers opportunities for a distinctive brand that will grow, but has character to it and promises superior services. We are looking now, at repositioning what was perhaps misguided before.”

Murphy has his ‘shopping list’ put together and in the past seven years, walked 263 hotels. “We are comfortable with existing operators but will go out in the Asia/Pacific and particularly China where there is growth, and a need for an international operator.

“We are not only looking at direct acquisitions, but we are considering joint ventures as well.” The owner-management company will work with the existing management of other hotels and seek a strong relationship with the operating group, he says.

“We take knowledge and experience to others. Given the constraints of the economy, we can't wait around. We want to find like-minded individual owners looking for representing possibilities. We feel multi-layer brands are too complex.”

In other words, the bigger you are, the less involved you are at ground level.

“Larger companies can't maintain closer relationships,” Murphy says. “Here with this company, we are viewed as a family.

“Our perspective as owners, and bear in mind that we were originally a family company that has now gone public, is that we can bring a shared vision. Being small, we can maintain strong, owner-operator relationships. It is difficult to give the same amount of attention at the corporate level.”

Beyond Hong Kong, Langham does have a China game plan. Murphy, who remembers well what China’s hotel industry was like 15 years ago, when he went to Beijing to open the Le Meridien, says China has come a long way.

“It is much better than 15-17 years ago when I entered the market,” he says. “There was no understanding of working capital, pre-opening budgets and fit-outs, but they have now come a long way. Hotels today are ambitious, and they want better quality. They are looking for people outside China for guidance.

“We will offer an opportunity for owners to seek an identity at the high end of the product, and seek the quality they believe would be a fit.

“We are looking in each of the major cities (in China) and would be a match for someone who chooses to reposition, and at the right investment made available.

“Major cities have shown benchmarks for quality. There are a lot of local and national hotels that would be looking to reposition.”

But China is not the only area of opportunity, he stressed. Other areas in Asia are opening up new possibilities.

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