Hungary's Danubius Hotels has laid off 15% 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 Deák said in Monday's issue of business daily Napi Gazdaság.
Danubius Hotels will sell properties, if it must, to pay for necessary investments, Deák said. It could part with poorly performing hotels, he added.
Danubius Hotels' CAPEX fell to HUF 700 million in Q1 from HUF 1.0 billion in the same period a year earlier, the company said in its report for the period published in May.
Deák told Napi Gazdaság that the company could meet the targets in its business plan for the year. The company sees revenue falling 2% 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, Deák said.
The application of a new preferential VAT rate to hotel services is expected to reduce Danubius Hotel's losses by HUF 570 million in the second half of the year, Deák said. But the higher main VAT rate will offset the difference, he added.
From July 1, Hungary's main VAT rate was raised from 20% to 25%, and an 18% preferential VAT rate was introduced. (MTI-Econews)