Hungary’s Danubius Hotels has laid off 15pc of its staff, bringing headcount to the minimum necessary to operate, but only slightly reduced its investments spending since the end of 2008 in response to the crisis, CEO Imre Deak said in Monday’s issue of business daily Napi Gazdasag.
Danubius Hotels will sell properties, if it must, to pay for necessary investments, Mr Deak said. It could part with poorly performing hotels, he added.
Danubius Hotels’ CAPEX fell to HUF 700m in Q1 from HUF 1.0bn in the same period a year earlier, the company said in its report for the period published in May.
Mr Deak told Napi Gazdasag that the company could meet the targets in its business plan for the year. The company sees revenue falling 2pc and flat operating profit.
Danubius Hotels has seen a big drop in volume, worst in the conference tourism segment, since the autumn. Prices, on average, have fallen too. At the same time, the company’s spa and resort hotels outside of the capital have done well, Mr Deak said.
The application of a new preferential VAT rate to hotel services is expected to reduce Danubius Hotel’s losses by HUF 570m in the second half of the year, Mr Deak said. But the higher main VAT rate will offset the difference, he added.
From July 1, Hungary’s main VAT rate was raised from 20pc to 25pc, and an 18pc preferential VAT rate was introduced.