Orient Express Invests in Mexico
SAN MIGUEL DE ALLENDE, Mexico, March 12, 2006. Orient Express has just signed a seven million euro deal to acquire a 75 percent equity share and the management of the Casa de Sierra Nevada in San Miguel de Allende.
Founded in 1542, the town is located 200 kilometres north of Mexico City at 2000 metres above sea level. Although familiar to travellers from the USA and Latin America, San Miguel de Allende is little known in other markets. The hotel's existing 33 rooms are housed in an interesting series of old colonial buildings - one served as a fort, a customs house and an archbishop's residence before being turned into a hotel in the 1950s. Orient Express will invest EUR4.2 million straight away for renovations and to create 20 new suites, a spa, and a pool and garden area. The hotel will stay open while the work takes place.
This is Orient Express's second property in Mexico; its Maroma Resort and Spa on the Yucatan Peninsula opened in 2002 and has just re-opened again, with eight more beach-front bungalows, following repairs after hurricane Wilma hit last October last year.
Elsewhere, Orient-Express, which now operates 50 enterprises (mostly hotels but also trains, boats and restaurants), had a positive year in 2005. Management says it is particularly pleased with its performance in St Petersburg at the Hotel Europe and at the Hotel Cipriani in Venice. These two hotel operations helped increase EBITDA for Orient-Express's owned Europe hotels up from EUR24.3 million in 2004 to EUR38.8 million.
Of Orient-Express's managed and parted-owned hotels, only the Ritz in Madrid underperformed in 2005 compared with 2004. One step to remedy this has just been announced - a joint marketing deal with Ritz Carlton has been arranged, though there is no question of any shared management operation (Ritz Carlton has a similar deal with the Ritz in London). And in the UK, the 7/7 London bombings negatively affected Orient-Express's train operations (the Royal Scotsman, the Northern Belle and British Pullman) which all saw a downturn in business.
In North America, owned hotels all made solid gains in 2005 - except of course the Windsor Court in New Orleans and the Maroma, which both suffered from hurricanes. In Southern Africa, all the group's hotels did well, but outstanding performance came from Orient-Express's three safari lodges in Botswana. In South America profitability improved at the Copacabana Palace, despite a surge in the strength of the Brazilian real, while in Asia the Bora Bora Lagoon registered good gains, as did the Road to Mandalay river cruise boat.
Overall, net earnings for the group in 2005 were up 44% from EUR23.5 million to EUR33.9 million. Revenue increased 21% from EUR307 million to EUR372.4 million and same store revpar increased 11%.
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