• Strategic looks hard at Prague

Strategic Hotel Capital is reviewing its ownership position on its Prague property and may hand it back to the bank if worst fears are realised in the coming year.

The US REIT, which owns 19 luxury hotels, said in a conference call about its half-year results that it was its only asset that had created such concerns.

Despite the weakness in Prague, Europe performed better than the US, showing a 10.8% drop in revpar on a constant dollar basis against the US performance of a 30.6% drop in the second quarter.

CEO Laurence Geller hit out at the damage done to luxury hotels as meetings destinations by criticism by politicians and the media of corporate spending. These effects were still being felt.

Rival REIT Host, which has a similar luxury and upscale profile to Strategic, saw revpar in the Americas drop in the second quarter by 24.9%. In its European joint venture revpar was down by 24%.

Orient Express, which has a more leisure-orientated clientele at its luxury properties, saw revpar drop 24%.

But at Orient-Express the bulk of the hit in revpar is coming through occupancy drops. For the more business traveller orientated Host and Strategic, the bulk of the revpar decline is being caused by rate decline.

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