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Spanish hotels secure big rent cuts-Husa executive

Published 05/20/2009, 12:30 PM
Updated 05/20/2009, 12:33 PM

* Husa exec says hotels getting up to 30 pct rent discount

* Expects Metrovecesa to give Husa 2-3 mln eur off 3 hotels

* Husa has cut avg daily rates by 30 pct year-on-year

By Ben Harding

MADRID, May 20 (Reuters) - Spanish hoteliers are demanding and getting rent reductions of up 30 percent from landlords like property firm Metrovacesa, an executive at one of Spain's biggest hotel groups, Husa Hoteles, said on Wednesday.

The executive, who asked not to be named, said directors of the Barcelona-based Husa chain were meeting on Wednesday with Metrovacesa Chairman Vitalino Nafria, who was expected to agree to cut the combined rent on three Metrovacesa-owned hotels in Madrid by between 2 million and 3 million euros to around 5 million.

Metrovacesa owns 15 hotels around Spain according to its website.

"January, February, March, April have been horrible. Really, really bad," the Husa executive said. "Most of us (hotel groups) have been trying to renegotiate our rents and in most cases we've been successful. We (Husa) have been able to cut our rents by 20 or 30 percent".

A spokeswoman for Metrovacesa, Spain's biggest property company, declined to comment.

Spanish hoteliers, whipped by a collapse in British tourist numbers and a sharp decline in trade from business conferences and events, are negotiating hard on rents, hoping landlords would agree to take less rather than drive hard-up businesses to the wall.

The source said Husa had been forced to cut its average daily rates by around 30 percent year-on-year to ensure guest numbers, which have fallen between 6 and 8 percent, do not drop further. It has also laid off about 20 percent of its staff.

Privately-owned Husa runs 160 hotels, most of them business-orientated establishments in Spain. About 70 are rented with the remainder franchised, managed, or owned outright.

The luxury and business traveller segments were suffering most of all, the executive said, while the city-break market had resisted better Spain's worst recession since the 1936-39 civil war.

"Most of our rental agreements have been closed for this year with cuts of 15 to 30 percent," he said.

Official figures for March show that foreign tourist arrivals fell 21 percent year-on-year, or 10 percent when adjusted for no Easter break in that month this year. (Additional reporting by Andres Gonzalez; editing by Karen Foster)

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