On 16 September 2010, Island Hotels Group Holdings plc published its Interim Directors’ Statement revealing that revenues from the hotel business exceeded expectations reflecting the increased number of arrivals to the Island. Occupancy levels and room rates also performed better than expected. However, much of this gain has been eroded by substantial increases in water and electricity costs. The event-catering business is also performing ahead of expectations.
In respect of vacation ownership, overall sales have declined over the last year. Nonetheless, the recently launched Registry Collection within the Radisson BLU Golden Sands Resort & Spa has been very well received and has had a positive effect on volumes and average prices. Particularly strong interest was received from existing clients who opted to part-exchange their existing weeks owned by them in favour of this new offering. Naturally the full impact on revenue and profitability will positively hit the income statement once the original stock taken in part-exchange by the Group is resold.
The IHG Group is currently working on the development phase of Hal Ferh and the directors expect to submit plans to MEPA by the year end. The uplift in the Golden Sands overall area is expected to have a positive long-term impact on the investments of the Group in the vicinity.
Overall, the Directors expect to report a decline in profitability for the year ending 31 October 2010 compared to the previous financial year. This is mainly due to the aforementioned decline in net vacation ownership sales and the upward pressure in costs, namely the utility rates and increased finance costs following the restructuring of the Group last year which included a bond issue.