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Thu 19th Jul 2018 - Update: Hotel business rates, C&C Group, Everyman and DP Poland
Colliers – rise of Airbnb makes hotel business rates unfair: Rating experts have called on the hotel industry to appeal against hefty business rates in light of the rise of Airbnb. Figures produced by Colliers International and Hotelschool in The Hague showed nights booked with Airbnb in London during 2017 were up 45%. But bookings for traditional hotels were up just 4.6%. Colliers described the current business rates system as “unfair”, saying it gives an advantage to Airbnb and similar platforms. John Webber, head of rating at Colliers International, told City AM: “This is just not a level playing field. Not only is Airbnb attacking hotel market share, by offering cheaper room rates, but is able to do this through the unfair advantage of not paying business rates.” Airbnb still only accounts for a small portion of the market. Last year it was used to book 6.7 million overnight stays in London compared with 91 million in hotels. But Colliers argued the platform should be treated as a “material change” in the industry, which affects rateable value of hotels. Some of London’s top hotels have seen their business rates more than double in the past year. The Dorchester Hotel’s rateable value rose 131% under the revaluation, almost doubling its bill to £600,000.

C&C Group signs exclusive four-year deal to sponsor Cheltenham Gold Cup: C&C Group has announced its Irish cider brands, Magners and Bulmers, are to sponsor the Cheltenham Gold Cup and be presenting partners of the festival under a four-year agreement from March 2019. The company stated: “The Cheltenham Festival is the most prestigious jump racing event in Europe and one of the highest profile UK and Irish sporting and social occasions. The festival typically attracts approximately 260,000 race-goers over four days, with one third travelling from Ireland and is watched by millions of horse racing fans across the world on television and digital platforms. This agreement offers a unique platform to promote C&C’s premium Irish cider brands to new and existing consumers in Ireland, the UK and around the world. From March 2019, the Cheltenham Gold Cup will be known as the ‘Magners Cheltenham Gold Cup’ in the UK and internationally, and as the ‘Bulmers Cheltenham Gold Cup’ to audiences in the Republic of Ireland. Additionally, The festival will be referred to as ‘The Festival, presented by Magners’ in the UK and internationally, and as ‘The Festival presented by Bulmers’ in the Republic of Ireland. This innovative sponsorship agreement with the Jockey Club Racecourses will greatly enhance the visibility of both brands in their respective markets and demonstrates C&C’s commitment to continued investment behind its Magners and Bulmers cider brands.” Stephen Glancey, C&C Group chief executive, said: “Given the Cheltenham Gold Cup’s huge popularity in both the UK and Ireland, this sponsorship is a natural fit for our business. We believe the festival’s appeal will continue to grow and by association expand the audience of our two premium Irish ciders.”

Everyman reports 15 cinema sites in the pipeline: Everyman Media Group has provided a trading update for the 27 weeks ended 5 July 2018. It stated: “The group ended the period operating 22 cinemas having opened a four screen venue in York during the period, as previously announced. Demand for the Everyman offer continues to strengthen and the board is pleased to announce new contracts have been exchanged for venues in Cardiff (four screens) and London Broadgate (three screens), both of which are expected to open in 2019. These sites, together with those previously announced, commit the group to a total of 15 more venues. The group has performed in line with expectations in the first 27 weeks of 2018, the board is confident of a successful outcome for the full year and the pipeline is continuing to be developed in line with the board’s expectations. The group intends to publish its interim results for the 27 weeks ended 5 July 2018 on 5 September 2018.”

Domino’s Pizza Poland reports strong growth in first half: Domino’s Pizza Poland has reported system sales up 38% in the first half of 2018. Like-for-likes rose 13% and 77% of delivery sales were ordered online. It has 59 stores in 26 towns and cities to date, with five new stores opened in the first half of 2018 and six further leases already signed and a number of stores under construction. Peter Shaw, chief executive of Domino’s Pizza Poland, said: “System sales grew 38% in the first half of the year as a result of double digit like-for-like sales growth and sales from non-like-for-like stores (those opened within the past 12 months). This robust growth was achieved in spite of unseasonably warm weather in May and June, warm weather tending to suppress home delivery sales. Balancing the warm weather, from the middle of June the World Cup supported sales as football fans ordered delivery pizza while watching matches on television; the Poland matches generated particularly high sales. The proportion of sales ordered online continues to grow and, at 77% of all delivery sales ordered online, Poland is one of the leading Domino’s markets worldwide for online sales. Online ordering is not only very popular with our customers, it is a highly cost-efficient channel to operate. Healthy growth in Poland’s consumer economy has encouraged competitive activity as food delivery aggregators and direct pizza delivery competitors have been investing in both marketing and store openings, consequently the Polish home delivery market is showing significant growth, as witnessed in many other markets. Domino’s Pizza is well positioned in Poland to take long-term advantage of this market growth, through its focused proposition to deliver consistently great tasting, freshly made hot pizza, fast, time after time after time, the fundamental reason why Domino’s Pizza became the world’s number one pizza chain by system sales in 2017. Following our record number of store openings in 2017 (19 stores opened) we are focused in 2018 on balancing store openings with growing the sales and Ebitda performance of our immature stores. We expect a store to take 12 to 18 months to reach breakeven and at the beginning of 2018 more than a third of our corporate store estate was less than 12 months old and two thirds less than 24 months old. As the proportion of immature stores reduces, relative to the overall estate, we expect to see a positive impact on group Ebitda. In this context we have opened five corporate stores so far this year and have a pipeline of six store leases already signed, with a target of ten-plus store openings by the year end, representing circa 20% growth in the total store estate in 2018 from 2017. As well as corporate store openings we are in discussions with both existing and potential sub-franchisees on opening more sub-franchised stores this year. Our new commissary in Lodz is operating very effectively as it nears it first anniversary, producing growing volumes of dough and distributing growing volumes of ingredients to stores, alongside our Warsaw commissary. Gross profit margins in both store and commissary P&Ls were boosted in the first half by price deflation in the European cheese market, margin benefits that we share with our sub-franchisees. The price of cheese is material because it accounts for a significant proportion of the food cost of pizza.”

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