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Trusting in the steadily improving success of the economic policy and the calm and peaceful foreign policy of Hungary and the neighbouring countries, the proximity of accession to the European Union, a less than 8.5% inflation and a 0.4% devaluation of the forint, our Company set a sales revenue of HUF 27.2 billion and a pre-tax profit of HUF 4.5 billion as its goals for this year.

Significantly Higher Occupancy

Considering the said devaluation rate of the forint and rate of increase of room prices acceptable by the market, the 8% increase of the sales revenue can be attained by a very significant, almost 5%, increase in occupancy. A sales policy by which trends in business tourism favourable to us may be ensured is to be implemented. Our revenues may be ensured by increasing the proportion of a more demanding clientele and using higher price categories that may be applied in their case.

We established the personal conditions of this at the end of last year by carrying out rational regroupings of the tasks through the separation of the sales and marketing tasks and encouraging the responsible officers of the given areas to pursue an aggressive sales policy through the establishment of independent work areas. On the side of promotion, this is to be supported by our punctual, proper and intensive appearance oriented towards the target market.

The changes in personnel made in the management of a few hotels at the end of last year and at the beginning of this year, carried out as a result of the evaluation of the performances of each hotel, served this purpose, too.

Moderate Increase in Costs

A decrease in depreciation, a 8.5% increase in the wage bill, an additional staff cut as planned, and the further standardization of purchases may result in an increase in costs that remains well below inflation, and this may have a very favourable effect on business profits. The integrated corporate management system introduced in 1999 may provide major assistance in meeting these objectives.

Increasing Competition

After years of inactivity in this area, the opening of a profusion of new hotels will begin this year in Hungary. In general, foreign investors open hotels with 200 rooms on average in the most preferred areas of Budapest with the help of multinational hotel chains. Of those, two four-star and one five-star hotels are to be opened this year.

An action plan coordinating the whole Company is prepared to handle the increasing competition, to enhance quick and flexible reaction to their price and business policy, to retain the clientele and the highly skilled, valuable staff, to introduce new services, and to carry out developments aimed at not only keeping but also improving the standard.