Design Hotels AG

Design Hotels AG publishes Annual Results 2017

Business news for the stock market

Berlin, March 29, 2018 (pta010/29.03.2018/08:30) - Design Hotel AG (m:access, Munich: LBA; ISIN: DE0005141006) publishes the results for the financial year 2017. Revenue increased by about 12% and is slightly above the expectations set forth in the beginning and middle of the year 2017. The operational result increased by 8.4% compared to the previous year and, therefore, exceeds the expected result.

Key Financials:

Total Revenue increased by about 12% Euro 22.921m (20.471) in 2017. The main reason for this increase was the achieved transaction revenue from the participation of Design Hotels member hotels in the SPG-program by Starwood Hotels & Resorts ("Starwood").

Revenue from License Fees for membership with Design Hotels increased by 3% to Euro 4.202m (4.062). This contributes 18% (20) to total revenue. On December 31, 2017, Design Hotels had 309 (308) member hotels in its portfolio with 21,142 (22,087) rooms in 210 destinations and 58 countries.

Booking commissions came in at Euro 13.230m (10.751) in 2017, which means a 23% increase compared to the previous year. Commissions accounted for 58% (53) of the total revenue. The disproportionally high increase mainly comes from the participation of member hotels in the SPG-program and the connection of these hotels to the Starwood booking channels.

Revenue from Marketing and Consulting Services decreased by 3% in 2017 and reached Euro 5.489m (5.658). It accounts for 24% (27) of total revenue. The main reason for the decrease is the change in the products and services offering. The company had decided to reduce the offering of low-margin products to its member hotels.

The Gross Margin was below last year's level and came in at 57% (59). Gross Revenue was Euro 13.090m (12.046), which is an increase of about 9% compared to the previous year. The increase is disproportionally lower compared to the increase of total revenue. This is due to the higher direct costs associated with bookings through the Starwood channels.

The average number of employees increased from 86 to 94. Therefore, Staff Expenses grew by about 10% from Euro 6.144m to Euro 6.730m. At the same time, Revenue per Employee went up from about Euro 238,000 to about Euro 244,000. The increase of staff was necessary to provide more intensive and individualized customer service to the member hotels.

Selling Expenses came in at Euro 1.412m (1.638). They are directly related to the revenue development. The decrease of the selling expenses was mainly due to decreasing advertising expenses from to trade fairs.