Revenue and performance are holding up against the first signs of the economic slowdown - Restructuring of the Group is completed, including successful reorganisation of the Swiss business - Thanks to a strong brand and product portfolio, the company is in a good position to withstand the challenges that lie ahead.

The Hotelplan Group, which operates internationally and is an affiliate of the Migros Group, generated revenues of CHF 1.928 billion and operational EBITDA of CHF 41.2 million in the 2007/2008 business year (year-end: 31 October). Compared to last year's record results, revenues are down by - 2.5% and operating profit by - 27.7%. Hotelplan Italy's summer business was particularly impacted by the financial and economic crisis. The significant depreciation of the British pound sterling as well as the weak Euro and the extreme fluctuations in aviation fuel prices have all had a negative impact on company performance. In view of the changed economic climate, the fundamental reorganisation of the Swiss business in 2008 has proven to be the right decision for the company.

Hotelplan Group's international business performed well, both with Interhome and in the UK. However, these results are impacted by negative currency trends in the consolidated accounts. In the Swiss travel business, the results were better than the previous year, however they are still not at a satisfactory level. In 2008 the separately-managed business units Hotelplan Schweiz AG and Travelhouse AG were consolidated under the overall management of M-Travel Switzerland (MTCH AG). This challenging reorganisation involved numerous internal resources. At the same time, however, it allowed a more accurate positioning of the brand portfolio and helped capitalise on Group synergies with the entry into the 'budget travel' segment through 'Migros Ferien' and 'Denner Reisen'. As expected, the outsourcing of operational responsibility for Belair to Air Berlin allowed Hotelplan to gain additional flexibility in the management of flight capacities.

Consistent implementation of the strategy

To supplement the current activities of Inghams Travel in the UK and thereby further strengthen the specialist business, Inntravel Ltd., a company specialising in winter sports and walking holidays, was acquired at the beginning of 2008. The majority acquisition of Ascent Travel (Russia) was also completed at the beginning of 2008. Ascent Travel, the leading Russian tour operator for ski holidays, is the perfect complement to the business, which was previously conducted predominantly in the UK.

The expansion of Hotelplan Italy's successfully-launched TClubs is progressing, while further resorts in the Seychelles, the Red Sea, the Maldives and Marrakesh have been commissioned or are planned to be built in the near future.

Interhome has seen rapid growth in its core business with the number of properties on offer growing from 30,000 to 46,000 in 2008. Various new countries were incorporated into the network (India, UAE, USA). With Vacando, an Internet platform for the rental of holiday homes and apartments, Interhome offers individual homeowners the very latest technology as well as local services in the destinations. Vacando's entry into this unorganized market has been a success.

The ICT Roadmap, which was launched in 2007, made further progress in 2008. The goal of this initiative is to adopt a new technological strategy across the entire Hotelplan Group, whereby existing core tourism systems (e.g. tour operating systems) and peripheral systems (e.g. financial systems) are equipped with state-of-the-art technology.

M-Travel Switzerland as a strategic initiative

With the organisational and managerial consolidation of the entire Swiss business under the umbrella of M-Travel Switzerland, Hotelplan Group has taken a strategic decision with far-reaching consequences. M-Travel Switzerland is focused on three clearly-defined market segments 'Direct', 'Value' and 'Specialist/Premium'. ‘Denner Reisen' and ‘Migros Ferien', acquired or resulting from close collaboration within the Migros Group, are key elements of this structure.

The separate corporate identities of successful brands in the Hotelplan Group portfolio, in particular those of the Travelhouse Group and ‘Globus Reisen', are to be retained.

The M-Travel Switzerland management, led by Thomas Stirnimann, has implemented the new strategy according to plan. Processes were, and continue to be, further streamlined. Time to market was reduced to just a few days, thanks to better use of new technology.

"In view of the changed economic situation, we feel confident with the newly-restructured Hotelplan Group and prepared to face the new challenges", says Dr Christof A. Zuber, CEO of the Hotelplan Group.

Optimistic outlook

The reorganisation of business activities in the Swiss market, marks the completion of the Hotelplan Group restructuring. The ‘asset-light business model', which is implemented in a market-oriented and relatively decentralised manner in individual countries, is based on flexible capacity management which offsets fluctuations in demand within a particular margin. The Group is in a position to cushion the impact of a medium-term decline in demand. A key point of this will be ensuring that strategic projects and in turn the company's long-term future are not compromised for the sake of optimising profit in the short-term.