Arthur Andersen

Andersen, the global professional services firm and leading provider of hotel
performance data outside North America, today announced first quarter trading
performance for the European hotel industry.

The performance of the European hotel industry continued to improve during the
first quarter of 2001 with many markets reporting positive rooms yield growth.
Across the whole of Europe rooms yield grew 6.1 percent to reach ?70. Growth
was fuelled by a 4.7 percent improvement in average room rates combined with a
1.3 percent increase in occupancy.

The impact of the foot-and-mouth crisis in the UK, which started in February,
does not appear to have significantly impacted the performance of hotels in our
survey during the first quarter of 2001. There was a marginal fall in UK market
occupancy in March, but this was offset by a greater advance in room rates,
resulting in an increase of 3.7 percent in rooms yield for the month when
measured in sterling. Results for the first quarter of 2001 show that increases
in both occupancy and average room rate across the UK have pushed rooms yield up
by 6.4 percent over the first quarter of 2000. The impact of the foot-and-mouth
crisis in the UK and the Netherlands may not be fully reflected in overall
market performance until April and May. There appears to be no doubt however,
that for smaller, rural establishments, which are highly dependent on tourism, a
decline in performance has already occurred.

Across Europe it is noticeable that many cities experienced a decline in
occupancy in March, the first sign perhaps of the impact of the US slowdown on
visitation to Europe, and exacerbated by the apparent misunderstanding of the
implications of foot-and-mouth. This assumption is supported by the latest BAA
numbers for April, which reveal a 3.6 percent fall in arrivals at Heathrow
airport to 5.2 million, and a fall in US passengers of 7.4 percent. Despite the
occupancy decline, average rates have held up across Europe, with the overall
average rate at ?116, up 4.8 percent. As a consequence, many markets have
continued to witness double-digit rooms yield growth in both March and for the
year-to-date.

Commenting on the findings, Julia Felton, who heads Hospitality Knowledge
Services at Andersen and is based in London, said: ?Despite the adverse
trading conditions during the first quarter of the year, the European hotel
industry has continued to experience rooms yield growth ahead of inflation. The
next few months will be crucial, as early indications are that the industry may
have been harder hit in April due to the effects of foot-and-mouth curtailing
some of the typical Easter demand, particularly in the UK. May will also be a
key indicator for hoteliers as to what the year ahead holds.?

Whether US tourists continue to stay away from Europe will depend as much on the
overall state of the US economy as to effective publicity that there are no
health and safety issues following the foot-and-mouth outbreak. With the US
dollar strong relative to both sterling and the euro, and transatlantic airfares
some of the cheapest in years, Europe continues to be a very attractive
destination.

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About Arthur Andersen

Andersen is a global leader in professional services. It provides integrated
solutions that draw on diverse and deep competencies in consulting, assurance,
tax, corporate finance, and in some countries, legal services. Andersen employs
85,000 people in 84 countries. Andersen is frequently rated among the best
places to work by leading publications around the world. It is also consistently
ranked first in client satisfaction in independent surveys. Andersen has enjoyed
uninterrupted growth since its founding in 1913. Its 2000 revenues totalled
US$8.4 billion. Learn more at www.andersen.com

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About The Hotel Industry Benchmark Survey

Launched in 1996 as the definitive source of hotel performance data outside North America, the Arthur Andersen Hotel Industry Benchmark Survey comprises information gathered from more than 4,000 hotels in 200 markets across 140 countries. The survey currently tracks hotel performance everywhere outside North America. Regional surveys are produced for Asia Pacific, Europe and the Middle East & North Africa. These are supported by in-depth country/city reports for Australia, Germany, South Africa, the UK and London. New regions under development include Latin America, Caribbean and Scandinavia. For more information, or to join the survey, contact Lone Alletorp, London at 44 20 7546 9409, e-mail us at hotelbenchmark@uk.arthurandersen.com or visit our web site at www.hotelbenchmark.com.

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