Scandic records rise in profits

Mid-market group Scandic Hotels saw its profits rise last year on the back of a five per rise in revenue to 758.5 million euros.

In a year when the group added six hotels, EBITDA rose to 111.1 million euros from 103 million euros in 2007.

President and CEO rank Fiskers admitted the outlook for 2009 was “difficult”.

He said: “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 Scandic’s market share in the coming year. In addition our cost efficiency measures are fully on schedule which will further enhance profitability.”

Fiskers added: “I have often been asked recently whether the economic downturn means that we are going to reign in our ambitious expansion plans, and the answer is that our plans remain undiluted.

“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.

“We also 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.”

The chain has refurbished almost 5,000 rooms in the past two years.

by Phil Davies