Intercontinental continues to accumulate losses

RCHI representatives chose not to comment upon the size of the losses registered, as the company is listed on the RASDAQ.

In line with the latest available data, during the first half of last year RCHI reported losses standing at 1.1 million euros, a value close to those registered during the whole of 2004, namely a total 1.2 million euros.

RCHI”s portfolio has recently been reorganised, in that the company continues to own Intercontinental hotel, though has given up the four-star Lido hotel.

Intercontinental hotel”s balance sheet last year indicated losses against turnover worth 9.5 million euros, with the hotel operating at less than half its total capacity of 403 rooms.

Intercontinental, one of the biggest five-star hotels on the market in Bucharest, in terms of the number of rooms, is trying to break even this year.

“We expect turnover to increase by 20-30% this year, to 13.5 million euros, as we are going to open another 100 rooms as of the end of this month,” Hans Rudolf Rutti, general manager of Intercontinental hotel, commented for Ziarul Financiar.

Intercontinental will thus have a total of 282 rooms available for use this year.

The hotel has 403 rooms, of which less than half have been made available for use so far, with the rest being under renovation.

Around 1.5 million euros were invested in this process. Rutti says another 100 rooms will be renovated, a move demanding investments between 1.5 and 2.5 million euros. The hotel in 2005 operated at an average occupancy rate of 60-64%. “We are expecting solid growth for the next 4-5 years, after which the level of growth will flatten off,” concluded Rutti.

In the wake of these investments, Intercontinental will have been almost fully renovated.

Almost boasting a similar number of rooms, JW Marriott hotel Bucharest in 2005 registered turnover put at 42 million euros.

No new five-star hotels are expected to enter the Bucharest market in 2006, though players in the sector say that international chains such as Sheraton, Hyatt or Four Stars are considering the market in the capital city.

International hotel companies prefer the three to four star segment, which is particularly focused upon business-people, is more mobile and involves smaller investments. In 2005, several hotel chains entered the Bucharest market (NH Hoteles, Golden Tulip), while others expanded outside the capital (Accor, Best Western).

Intercontinental owns the franchise for the international brand Intercontinental Hotels. andreea.groenendijk@zf.ro