The Rezidor Hotel Group announced that it is exiting seven leased hotels in France due to their consistent unprofitability and turns them into management contracts.
The hotels are located in secondary French markets. To exit from the leases, Rezidor agreed to a payment to the owner, Hibernia France, Paris, of €11.5 million in 2012. The seven hotels will remain under their existing brands and will be operated by Rezidor for the next few years under management agreements. Should Hibernia France sell the properties, the management agreements will be terminated thereafter.The hotels include: •Park Inn by Radisson Arcachon •Park Inn by Radisson Macon •Park Inn by Radisson Orange •Park Inn by Radisson Nancy •Park Inn by Radisson Lyon Ouest, located in La Tour-de-Salvagny •Radisson Blu Hotel, Aix-Les-Bain •Les Loges du Park, located in Aix-Les-Bain“This very important asset management deal is in line with our goal to lift Rezidor's EBITDA margin by 6 to 8 percentage points by 2015. It is of fundamental importance to the group to further optimize our portfolio of leased hotels, secure more profitable income streams in the years ahead, and reduce the leverage of the company,” said Knut Kleiven, Rezidor's deputy president and CFO.Rezidor said the exits will positively improve its EBITDA by approximately €2 million annually and relieve it of having to invest in capital expenditures for the properties.
