By Julius Baumann

A poor performance from Queensgate Hotels & Leisure’s hotel management division dragged down the overall group in the year to August 31, resulting in an attributable loss of R3,24m, or 21c a share.

The AltX-listed company took the unusual step of delivering the bad news at a presentation to analysts and the media in Sandton yesterday.

The group develops and manages hotel properties on behalf of investors and is made up of two main divisions: hotel management and Queensgate Business Development (QBD), the development arm.

While QBD reported a strong performance with revenue of R53,3m and attributable profit of R26,6m, the hotel management division posted revenue of R68,9m and an attributable loss of R29,8m.

CEO Andrew Hubbard said yesterday that the global financial crisis had taken its toll on the hotel business with occupancies down 30% year on year. Hubbard also admitted the group had made some key errors, targeting only the international tourist market and opening its Rockwell Hotel without creating market awareness of the new property.

The group’s results fall well short of the 1,87c earnings per share forecast by the group last year. Nevertheless, Hubbard believed the year ahead was promising, with a solid pipeline of new projects for QBD and a new management agreement with Three Cities Hotels.

He said next year’s World C up was a huge opportunity for the group and the country. “We expect to earn R40m in profit over the four weeks from the W orld C up alone,” he said.

Queensgate also hopes to announce an agreement to bring a new international four-star brand to SA by year-end, allowing the group to capture the four-star business market.

On the development side, QBD is in full swing with the construction of the R150m, 102-room Pearl House and R230m, 161- room Upper Eastside Hotel & Conference Centre in Cape Town. Queensgate is also due to begin construction of the R165m, 99- room 31 Heerengracht H otel, which will eventually join up with Pearl House .

Source: Business Day