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The Dan Hotel chain reported a fall in net profits by 32 million shekels from 136 million shekels in 2007 to 104 million shekels for 2008; this was despite increased revenue of 6.1 percent to 838 million shekels.

As a result of the increase in the number of tourists to Israel during 2008, the Dan Hotel chain reported increased revenue; however because of the steady devaluation in the value of the Israeli shekel the actual growth was lower than the actual increase in hotel nights.  The operating profit for 2008 totaled 240 million shekels, this compared with 237 million shekels in 2007.

According to the Dan Hotel’s CEO, Ami Hirshstein, thanks to efficient business practices adopted during the year and adjusting prices to deal with fluctuations in exchange rates, the negative effects of the recession were actually minimized and operating profits increased.  Results in the last quarter of 2008 improved with only minimal negative effects caused by the recession.

Hirshstein added “the effects of global recession are being felt in the first quarter of 2009 and if current situation continues, there is no doubt that it will affect the company's financial results for this quarter."  He also added that bringing back significant numbers of incoming tourists to an ailing industry would only be possible by extensive marketing activities from the Ministry of Tourism.

As well as operating 12 hotels and 3,279 hotel rooms; the Dan Hotel group operates five business lounges at Ben Gurion Airport; it is the owner of commercial space in the King David Tower commercial centre in Tel Aviv and of one-third of the Panorama Commercial Centre, in Haifa. 

In February 2009, Dan Hospitality India Private Limited completed a deal to purchase 8.5 dunams (2.1 acres) of land in the Indian city of Bangalore on which they plan to build a 250 room hotel.  The hotel which will be graded 4 or 5 stars will be located alongside a modern hi-tech industrial park.  This project is expected to take up to 4 years to complete and will cost in the region of $50 million.

Summary

Revenue:

2007  790.8 million shekels

2008  838.8 million shekels

Operating profit before depreciation and financing:

2007  237.3 million shekels

2008  240.4 million shekels

 

Net profit

2007  136.2 million shekels

2008  104.4 million shekels

 

4th quarter operating profit before depreciation and financing

4th Qtr. 2007  53.9 million shekels

4th Qtr. 2008  53.4 million shekels