Swedish midmarket chain Scandic Hotels has defied the softening market by posting an upbeat set of figures, including gross profit rising to Eur 311 million in 2008 from Eur 276 million a year earlier.
Revenues were also on the rise, up 5% to Eur 758.5 million for 2008 from Eur 720 million for 2007, as occupancy levels remained stable (64.9% in 2008 verses 65.6% in 2007). Meanwhile in 2008 the mid-budget chain also opened six new hotels, bringing its total to number of hotels to 138. It also launched eight new hotel projects were launched, involving 1,496 rooms.
Operating profit rose by 8% to Eur 111.1 million, giving a profit margin of 14.7%.
Frank Fiskers, Scandic’s President and CEO, said: “We see an advantage in us focusing so clearly on the mid-market segment, because it reduces our sensitivity to economic turbulence to some extent. In good times, many of the budget hotels’ customers ‘upgrade’ to Scandic, and in bad times many of the luxury hotels’ customers ‘downgrade’ to us.
“In terms of operating profit, we have kept our EBITDA margin at the same level as the previous year, both for the full year and the autumn, and we have a good financial position and good liquidity.
He also said his plans for expansion remain undiluted, despite the downturn. He said: “The economic situation means that property owners are being a little more cautious, wanting to feel extra confident about the strength of the operator they choose. This means that it takes a little longer than usual to get an agreement, but in the long-term this works in Scandic’s favour, as we can show a good track record through several economic cycles.
“Scandic is a modern hotel chain where conscious people come for inspiration and renewed energy. With about 150 hotels and 30,000 rooms, we are already one of the largest hotel companies in Europe. And we are continuing to grow - within a few years, there will be over 200 Scandics to choose from.
“More and more hotel chains are now opening their eyes to how important environmental work is, and although we welcome all initiatives in this area, I wish more would dare follow in our footsteps and publish all their key figures. This would help increase knowledge on the issue and make it easier for customers to make conscious choices.
“The outlook for 2009 is difficult with low visibility and great uncertainty. We have all along assumed that the first quarter would be difficult and this seems to be the case. We have, however, a number of sales and marketing activities in the pipeline which we are confident will sustain Scandics market share in the coming year. In addition our cost efficiency measures are fully on schedule which will further enhance profitability.”