Hotel co Fattal downsizes

David Fattal Photo; Eyal Izhar

The company is shutting hotels,  reducing its workforce, and seeking partners for its hotels in Europe.

Layoffs, voluntary retirement, and sending most of the remaining employees on unpaid leave: this is how Fattal Hotels (Fattal Holdings Ltd (TASE: FTAL)) is dealing with the coronavirus crisis, which has directly affected the hotel industry, leading to the collapse of Fattal's share price.

Incoming tourism to Israel has been almost entirely wiped out, and the restriction on gatherings of more than 10 people has in effect closed off the possibility of internal tourism. The Fattal chain like others has received many cancellations, and bookings have dried up. The hotel sector is becoming a wasteland from day to day.

In a notice to the Tel Aviv Stock Exchange, Fattal has set out several streamlining measures, among them a reduction in staff welfare and training activities, consolidation of positions and closure of 50 of the chain's 180 hotels at this stage, with further closures likely later on. Fattal will reduce retainers to service providers and what most investment and hotel refurbishment.

The chain has approached the authorities in the various countries in which it operates hotels asking for discounts and postponements of payments due, and it has announced the suspension of lease payments on some of the hotels that will be shut.

The company has also started the process of selling hotels in Europe (on the basis of sale and management or sale and leaseback), and it is examining the introduction of partners in its European hotels, even 50% partners.

Fattal Holdings' share price fell nearly 29% this morning, and the company's market cap has been slashed to less than NIS 2.3 billion. So far this month, the share price has fallen by about 64%.

Published by Globes, Israel business news - en.globes.co.il - on March 16, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

David Fattal Photo; Eyal Izhar
David Fattal Photo; Eyal Izhar
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