Thistle Hotels Full Year Trading Update

Thistle Hotels Plc is providing the following update on trading for the financial year ended 29 December 2002, which is in line with expectations. The Preliminary Results for the financial year ended 29 December 2002 will be released on 3 March 2003.

Trading: Trading trends improved through the year with turnover growth of 1.9% in the second half year compared to the second half year of 2001 in the 18 owned or leased hotels, which are predominantly London located. This follows a 13.6% turnover decline in the first half year compared to the first half year of 2001 for these hotels. Turnover for the full year for these hotels was £151.1 million, down 6.8% against 2001. Costs were tightly controlled to mitigate the impact of this turnover decline and to protect cash flow.

Revenue per available room (“Revpar”) in the 18 owned or leased hotels in the second half of the year was £58.36, an increase of 2.7% compared to the second half of 2001. This Revpar growth was driven by improvements in occupancy, which increased by 8.9 percentage points. Average room rate was down by 8.7% as a result of changes in business mix with fewer business travellers and more lower spend leisure travellers combined with a number of tactical room rate reductions. Revpar in the second half of 2002 compared to the first half was up 5.4%. Revpar for the full year fell 6.8% year-on-year to £56.81 with occupancy up by 2.6 percentage points to 76.2% and average room rate down by 10.0% to £74.56.

Thistle operates 38 hotels under management contracts which have a total of 5,514 bedrooms, of which 1,268 bedrooms are in 6 hotels located in London. Revpar in the managed hotels fell 3.8%year-on-year to £39.15, with comparable occupancy levels at 68.6% and average room rate down by 3.9% to £57.07*. Revpar in the hotels outside London, which are less dependent upon international travellers, was comparable with the prior year.

Key revenue statistics can be found below.


Orb a.r.l.: On 4 November 2002, Orb a.r.l. (“Orb”) announced that it was considering various strategic options including the acquisition of Thistle but that it had not entered into any discussions with Thistle. On 9 January 2003 Orb announced that it would not proceed with an offer for Thistle. With this uncertainty removed the Board can now continue to focus on the best strategic options to deliver value for all shareholders.

Outlook: The global economic environment continues to be uncertain and we are cautious as to when there will be a recovery in general hotel trading conditions. For these reasons it is difficult to forecast turnover for 2003 and we remain focused on keeping tight control on all costs and on cash generation. * All numbers are for the full 52 week period.

Thistle is the largest hotel operator in London with 22 hotels in prime locations throughout the capital and has hotels in key regional cities of England, Scotland and Wales.

There are 56 Thistle Hotels of which 18 are owned or leased and 38 are managed. There are a total of 10,718 bedrooms of which 5,204 are in owned or leased hotels and 5,514 are in managed hotels. In London there are 4,747 rooms in 16 owned or leased hotels and 1,268 rooms in 6 managed hotels. In the Regions there are 457 rooms in 2 owned or leased hotels and 4,246 rooms in 32 managed hotels.