“2010 has been a very positive year for us. We experienced a recovery in all geographical regions and a robust increase in margins as a result of the RevPAR improvement and the cost saving measures initiated in 2008/2009. We also reported a substantial increase in free cash flow coming from good operating results, improved working capital and tight CAPEX control. Rest of Western Europe led the recovery throughout the year and we witnessed significant RevPAR increases in key markets such as Germany, France and Benelux.

The fourth quarter, however, recorded a drop in margins compared to last year. This was mainly the result of exceptional costs, such as higher variable salaries due to better than expected performance during 2010, allocation of marketing costs to the quarter and one-offs in the Nordics. The extraordinary costs in the quarter do not represent an increase in the cost base going forward.

We have continued with our growth strategy, and despite the continuation of difficult trading, 2010 was another record year of new openings. 7,200 new rooms were added to operations, and we continue to have one of the largest pipelines in the industry. Going forward we will continue adding new hotels to our portfolio and invest in further enhancing the quality of the existing hotels.” 

Fourth quarter, 2010