FY 2012 Annual Report - Orascom Development

14 Orascom Development 2012 Annual Report 15
3. Business Segments
3.1 Hotels
Hotel revenues increased by 8.2% due to higher room rates and slightly improved occupancy rates. Accordingly, the operating
result (EBITDA) increased to CHF 36.9 million.
Hotel revenues
CHF 147.6m
(2011: CHF 136.3m)
Share of Group revenue
54.3%
(2011: 53.7%)
2012
2011
2012
2011
Hotel market in 2012
The main factors opposing a stronger revival of the hotel market in Northern
Africa and in a number of countries in the Middle East were the continued political
volatility and a subdued economic situation in key European source markets.
In addition tour operators reduced flight capacities impacting occupancy
rates. Nevertheless, revenues per available room grew in the North African
market by 10% in 2012 and 6% in the Middle East.
Financial review 2012
Orascom Development’s hotel revenues grew by 8.2% from CHF 136.3
million a year ago to CHF 147.6 million in 2012 driven by three main factors:
First, our hotel room capacity increased by 1.0% from 6,589 rooms to 6,654
rooms due to the opening of the Juweira Hotel in Salalah Beach (64 rooms)
in Oman during 2012. Second, occupancy rates in our hotels increased
by one percentage point from 56% to 57%. And third we were able to
increase our average room rates by 5.3% compared to the prior year. In this
context it is worth mentioning that the share of hotels managed by Orascom
Development, in contrast to the share of international hotel chains, grew from
7.4% a year ago to 9.1% in 2012. While our key source markets remained to be
Western Europe (mainly Germany, France, Great Britain and BeNeLux), for
the first time business from Egypt became the number one in terms of number
of hotel guests and number two in terms of room nights because of shorter
stays. As a consequence of the revenue growth, the segment`s operating
result (EBITDA) increased from CHF 31.3 million in the prior year (23.0%
margin) to CHF 36.9 million (25.0% margin).
Country and destination performance varies
In our flagship destination El Gouna near Hurghada and in our other hotels
on the Red Sea client demand increased as customers started to significantly
differentiate between safe tourism areas and larger urban cities.
Taba Heights, Egypt, was negatively affected by reduced flight capacities which
led to a lower occupancy rate of 47%.
In our destination the Cove in UAE, 100 km away from of Dubai, the number of
hotel guests increased for the fourth consecutive year and a stellar occupancy
rate of 81% was reached despite a 16.0% increase in average room rates.
In Jordan occupancy rates reached 44%, slightly below the previous year. At the
same time, we managed to stabilize average room rates at the 2011 level.
In Oman we celebrated the opening of our second hotel, the Juweira Boutique
Hotel in Salalah Beach. As a consequence, the number of hosted tourists in
Oman increased compared to last year.
Reorganization of Management Team
Our hotel management team has been reorganized in the course of 2012 in
order to align our businesses closer to customer needs. Mahmoud Zuaiter,
former CFO of Orascom Development, was appointed Chief Hotel Officer.
In addition, three internationally recognized hospitality experts for the areas
Sales & Marketing, Development & Technical Services and Operations were
hired. We opened representative offices in Cairo, Muscat, Amman, London,
Cologne, Stockholm and Budapest to increase customer relationships. To
further increase our public and product awareness, Orascom Development
intends to intensify its social media efforts and customer events in the future.
Outlook for 2013
The first two months of the current business year registered a slight decrease
in revenues compared to the same period of last year. During the next 12
months our hotel portfolio will be expanded with the openings of The Chedi
Andermatt in Switzerland (December 2013: 89 rooms), our first hotel in
Makadi on the Rea Sea (December 2013: 288 rooms) and the Rotana Hotel
in Salalah Beach (expected December 2013: 399 rooms) which should
additionally increase revenues.
EBITDA
CHF 36.9m
(2011: CHF 31.3m)
2.8
18.5
1.8
Revenues by
Countries
(% total)
76.9
Egypt
UAE
Jordan
Oman
The Hotels segment KPIs, as of 31 December 2012
2012
2011
2
3
3
6
Number of Hotel Rooms
23
Occupancy rate
Egypt
Russia
Germany
France
Great Britain
Belgium
ARR
(CHF) 1
UAE
Netherlands
Jordan
Israel
Others
TRevPAR
(CHF) 2
Country Destination FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012
Egypt El Gouna 2,706 2,707 57% 63% 53 54 51 59
Taba Heights 2,365 2,365 54% 47% 50 53 52 48
Others Red Sea 830 830 55% 63% 34 30 36 40
Floating Hotels 27 27 25% 15% 595 625 226 132
UAE The Cove 346 346 77% 81% 139 161 182 215
Jordan Tala Bay 260 260 47% 44% 65 64 47 44
Oman Jebel Sifah 55 55 25% 33% 103 111 52 76
Salalah - 64 - 38% - 128 - 74
ODH Group 6,589 6,654 56% 57% 57 60 57 61
7
7
8
15
Nationality of
hotel guests
(% total)
1 ARR: Average Room Rate
2 TRevPAR: Total Revenue Per Available Room is similar to RevPAR but also takes into account other room revenues e.g. food and beverage, entertainment, laundry and other services.
11
14