Savoy group stays in the doldrums

Click to follow
The Independent Online
PRESSURE on the pockets of the wealthy has continued to dent the fortunes of the Savoy group. A weak second quarter led the company that operates some of London's most prestigious hotels and restaurants to report its second successive interim loss.

Giles Shepard, managing director, called the result disappointing, 'especially when the year started with high hopes of an improvement over the same period of 1991'. Turnover was up 10 per cent in the first three months, but slipped back because of the continuing worldwide recession and the weakening US dollar.

The group, which runs the Savoy, Connaught, Berkeley and Claridge's hotels in central London as well as the Lygon Arms in the Cotswolds and the Lancaster in Paris, made a pre-tax loss of pounds 1.8m in the six months to 30 June 1992. In the same period last year the loss before tax was pounds 674,000. The taxation credit for the half-year of pounds 760,000 reduced the loss to pounds 1m. Turnover was slightly down at just under pounds 37m. Yesterday, the shares closed at 443p, down 30p on the day.

Looking ahead, Mr Shepard said that September, helped by the Farnborough Air Show, looked strong. Rooms had been fully occupied for the past three days and looked like maintaining that rate into the next week. Meanwhile, the banqueting department reported bookings well ahead of last September's.

'It looks like there will be some improvement in the autumn. But we're not going to be helped by the weak US dollar, which undoubtedly will continue for some time,' he added.

In the meantime, the company is seeking to control costs and continue its marketing efforts while 'avoiding the discounting prevalent in the travel industry today'. The 'Best of Both Worlds', a fixed-rate, seven-day programme in which visitors can split their stays between London, Paris and the Cotswolds, has so far produced pounds 500,000 of business and will remain into the new year.

But with growing competition from new hotels and the refurbished Dorchester, Mr Shepard said: 'It is essential the service and style for which our hotels are known should in no way suffer.'

(Photograph omitted)

Comments