17 JULY 2002
- no interim dividend declared
Citing intense competition within the hotel industry in the wake of depressed tourism resulting from the events of 11 September, Suncrest Hotels, the only tourism oriented company listed on the Malta Stock Exchange, has announced reduced turnover for the fiscal period closing on 30 April.
Given the companys poor results, an interim dividend has not been recommended by the directors.
In a statement issued by the company, Suncrest states that while Malta has not been spared from the slow down to Mediterranean tourist destinations following 11 September, the impact of the decline in tourist activity was not felt in the months immediately following September.
However, January and February of this year experienced particularly weak demand, with arrivals from Germany and the United Kingdom falling by 34 per cent and eight per cent respectively - compared to the same period in 2001.
Additionally, Suncrest explains that competition among local hoteliers has been intense during the period, with most hotels cutting rates in order to maintain occupancy.
In such a scenario, Suncrest has posted turnover for the first six months of the fiscal year of Lm796,648, down from the Lm816,157 posted for the same period last year.
However, these results were achieved in light of a room occupancy rate of 35 per cent, down from last years 37 per cent, and an average room rate of Lm8.80, down from Lm9.85 charged in the same period last year.
Room rates, according to the company, were slashed in order to meet stiff competition for bed nights to match those offered by similar four-star hotels.
On the more positive side, the company cites food and beverage increasing by five per cent due mainly to a strong demand from the local market, particularly during the festive season.
The Hotels loss before tax amounted to Lm372,475, up considerably from the Lm321,351 recorded last year. According to the company this was partly due to the lower average room rate and to higher operating costs, amongst which were those incurred in introducing Sol Melia systems and standards to the hotel.
The hotel has introduced a number of improvements that are expected to lead to higher revenue in the busy summer months.
Such improvements include the upgrading of the hotel, a complete overhaul to the pool area and other works undertaken to upgrade the Cascades Restaurant which was rebranded La Cascada and the Sun and Surf Restaurant.
Over the period the company has also made a number of changes to its board of directors, with a view to implementing the Corporate Governance code of practice issued by the Malta Stock Exchange.