Orb throws open hotel auction

British property and investment  company Orb Estates has opened an auction of 37 Thistle branded hotels to potential bidders after a period of exclusivity enjoyed by Reit Asset Management expired.

Interested parties, which include other undisclosed investment companies, property investors and several individual entrepreneurs, are now free to place their bids for the portfolio of hotels after Orb's exclusive negotiations with Reit terminated Monday without a deal, a person familiar with the auction said Tuesday.

New York-based private equity firm Blackstone Group has decided it is not interested in the hotels despite press speculation that it could make a bid, a second person familiar with the situation said. Blackstone may have taken an initial look at the hotels, sources said, but on closer examination concluded that they did not offer an appealing investment opportunity.

The buyout firm has also been mentioned in press reports as a possible buyer of Thistle Hotels plc, a U.K.-based hotel operator that is searching for a white knight acquirer to help it fend off a hostile bid from Singapore-based investment firm BIL International Ltd.

Orb bought the Thistle-branded hotels that it is now trying to sell from Thistle in March 2002 for £600 million ($938.5 million) in a sale and leaseback transaction.

A source close to the talks said Orb has been marketing the hotels to other bidders while conducting the exclusive negotiations with Reit. Reit is reportedly willing to pay about £700 million for the hotels, although independent estimates for Morgan Stanley, which has leant Orb money, have placed a value on them of about £830 million.

Reit said earlier this week that it is still negotiating with Orb about buying the hotels but gave itself no more than a 50% chance of success.

The sense of urgency at Jersey, England-based Orb about selling the hotels reportedly stems from the company's need to pay off a number of creditors. Orb has declined to comment.

Orb has put other assets up for sale, including its Seafield logistics company and Poole Pottery businesses. Thistle Hotels, meanwhile, is continuing to look at ways to fight off the £300 million hostile bid from BIL.

The investment company, which is controlled by Malaysian businessman Quek Leng Chan, is offering 30% less per share for Thistle than the hotel operator's initial public offer price seven years ago. The biggest difficulty for Thistle's management, however, is the fact that BIL is the company's largest shareholder with a 46% holding.

Besides the search for a white knight, Thistle is also looking at a number of other options to derail the BIL bid.

These options include selling some of the company's more attractive hotels to raise cash to return to shareholders.

Neither Orb nor Reit are using outside financial advisers for their talks. Thistle's financial advisers are Merrill Lynch & Co. and Deutsche Bank AG. BIL is being advised by HSBC Investment Banking

SARS source found; Concerns shift to war

TravelWeeklyEast.com  -  Some relief came last night for Hong Kong, as doctors confirmed they have identified the Severe Acute Respiratory Syndrome (SARS) virus as a member of the paramyxoviridae family, and identified a treatment.

The team of doctors from the Prince of Wales Hospital and Chinese University of Hong Kong have yet to confirm whether it is curable, but said the current anti-viral treatment given to patients suffering from atypical pneumonia is effective. Secretary for Health, Welfare and Food Dr. Yeoh He Eng Kiong also said the rate of increase in the number of pneumonia patients appeared to be slowing.

The virus and the World Health Organisation (WHO) travel advisories have dealt a heavy blow to travel bookings into Hong Kong from Southeast Asia.

Joseph Tung, Travel Industry Council of Hong Kong (TIC) executive director confirmed this morning that 80-90 percent of bookings out of Southeast Asia have been cancelled, but there has been no significant drop in long-haul bookings.

“Yes, there has been a big drop in Southeast Asian bookings, while long-haul is not so significant. Yesterday’s good news that doctors found a cause will help. So now everybody’s focused on the war,” Tung said.

“If the war ends quickly, we won’t see much of a decline in bookings. The long-haul market has already been affected. Bookings have dropped since 9-11 and a trend for Hong Kong people to travel regionally has already been set. Overall, we don’t expect a big change because everyone has been anticipating war,” he added.

Hong Kong and China, Tung said, stands a much better chance of attracting more visitors because they are safe.

If a cure is found and no more cases of new victims fall ill to the virus, Hong Kong will be ‘safe’ in both senses of the word. As doctors work through the night to come up with a cure, the travel industry will have to do much the same to get regional bookings back, bookings that have been a buffer for the industry since 9-11.

Difficult times for German travel and tourism

TravelDailyNews.com  -  Travel industry experts anticipate no revival of foreign spending by Germans this year, even without an armed conflict in the Middle East . "Even in an optimistic scenario, we are looking for stagnating outlays under these circumstances and because of the low starting level," predicted economist Renate Finke in Dresdner Bank`s yearly analysis of the German travel account. The study said that the murky geopolitical situation, evoked by the words `Iraq` and `oil`, would influence the global economy and conditions for travel in 2003.

Without this, however, the economic outlook is not entirely bleak, the Dresdner study shows. Business sentiment has perked up in the European Union, except in Germany. This could lift spending by foreign visitors in Germany by around 2 per cent to nearly EUR 21 billion from last year`s EUR 20.4 billion, even if a weakening US dollar keeps Americans at bay. But a spiking oil price could spoil this outlook in the event of upheaval in the Middle East, depressing Germany`s travel receipts by scaring off some foreigners.

While a minor setback from a temporary jump in the oil price during a brief conflict could be absorbed, the unforeseeable effects of a protracted confrontation are impossible to measure, said Dresdner.

Much the same would apply to spending by German travellers abroad. Even in a favourable geopolitical scenario, the study said, insecurity about jobs and a prevailing economic gloom would cause people to skimp on vacations. A survey by Forsa market research institute found that 60 per cent of German households would have less to spend abroad this year, even if tour operators reduce prices. And the limp economy would also discourage business trips.

Two decades of rising spending by German travellers abroad reversed in 2002 after having ended in stagnation the previous year. Yet foreign visitors, especially close neighbours and US tourists, spent more money in Germany last year, shrinking the chronic net outflow in the national travel account.

Extrapolating from Deutsche Bundesbank`s preliminary balance of payments data, Dresdner estimated that German travellers spent about EUR 50.5 billion abroad in 2002. This was about 2.5 per cent less than the EUR 51.6 billion they spent the previous year and in 2000, when an unbroken 20-year rise in foreign travel outlays came to an end. Germany`s receipts from foreign visitors, however, rebounded last year from EUR 19.2 billion in 2001.

Dresdner tentatively traced the improvement to visitors from neighbouring countries, where the slump in consumption has not been as pronounced as in Germany, although people also became more inclined to pick destinations reachable by train or road rather than plane in the aftermath of 11 September 2001

Yaghi to oversee Le Méridien expansion in Kuwait - Yaghi to oversee Le Méridien expansion in Kuwait

New general manager of Le Méridien Kuwait, and country manager appointed to oversee the luxury hotel group's expansion there, is Hannes Yaghi. With 23 years' experience in the hospitality sector, most recently with Starwood, Yaghi has worked in many Middle East cities including Dubai, Muscat, Beirut, Cairo, Sana'a, Manama and Doha, as well as Cyprus and Tashkent.

His task in Kuwait is to spearhead Le Méridien's development with the A'amal Holdings group, which involves six new projects over a period of three years, including almost 450 hotel rooms and a conference centre.

Initially, Yaghi will take control at the former Ritz hotel, to renamed as Le Méridien Kuwait and scheduled for a refurbishment and expansion programme this year, following which a new tower will be added as well as a purpose-built conference centre.

In addition, Le Méridien will launch its new Art+Tech concept in the region in a new hotel in Kuwait this year, and follow this up with a second similar hotel in the Mubarakia area in 2004, followed by Le Méridien Residence in Salmiya in 2006.

According to Yaghi, the wholesale expansion will bring a new dimension to the hospitality sector in Kuwait: "By launching the revolutionary Art+Tech design for the first time in the Middle East in Kuwait, we are making a strong statement about how we view the emirate - as a dynamic business environment that will only go from strength to strength," he said.

"It's going to be an exciting period for Le Méridien as Kuwait becomes one of its key development areas - and I look forward to working with the A'amal Holdings, whose management have already demonstrated their commitment to moving forward in tandem with Le Méridien."

D’Estaing talks up Club Med’s ‘values of tolerance and solidarity’

e-Tid.com  -  Club Med has reported an ‘encouraging’ quarter to end-Jan, with group revenues +0.8% higher at €340m. But it has seen a slowdown in recent weeks and also said that the late booking trend is more acute this year than last.

The release issued from Club Med’s Paris HQ confirms that Belgium, Switzerland and Italy are its European priorities. Brazil is now seen as a potential outbound market along with China and Korea.

Its commitment to the three European markets is backed up with an increase in number of points of sale in Belgium, plus the opening of a Club Med Gym in Brussels. It is also seeking to improve the quality of distribution in Italy.

It is also looking to strengthen its home market with ‘a unique complementary product offer’ for France.

At the start of March, it closed Club Med World Toronto, ‘eliminating a source of significant losses’. Since the urban leisure and lifestyle centre opened in Oct01, it has run up losses of €5.1m. Club Med World Paris, however, continues to operate.
Today’s Q1s also mention that the recovery programme for the American zone is in full flow, with sales growth 10% ahead in terms of revenue.

Henri Giscard d’Estaing, executive chairman of Club Med, said: ‘At a time when there is talk of war, Club Med’s vocation of ‘inventing happiness’ is necessary more than ever, and we will continue to share our values of tolerance and solidarity in our villages’.