Union hotels changing business model in wake of massive loss

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"The Union Hoteli group was faced with the biggest drop in revenue in all its history in the first half of this year," the group, which consists of the company Union Hoteli and the sheltered company IP Central, said in a report released on the web site of the Ljubljana Stock Exchange on Wednesday.

The trends at the beginning of the year were promising, but the government-sponsored lockdown decree in mid-March changed all that.

"We resumed operations in June but the demand for hotel services dropped drastically," the group said, adding that it was changing its business model to return to profitability.

Now, they are focussing on Slovenian guests and long-term renting of their real estate. Central Hotel and The Fuzzy Log in Ljubljana's city centre will be turned into student dorms.

The Union hotels generated EUR 3.6 million in net sales revenue in the first half of the year, a 69% drop compared to the same period last year. After posting a net profit of EUR 2 million in the first six months of last year, this year the group was EUR 1.8 million in the red in June.

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The company Union Hoteli saw a 68% drop in net sales revenue to EUR 3.4 million, while its loss stood at EUR 1.6 million. The company posted EUR 1.9 million in net profit in the first six months of last year.

Union Hoteli is owned by Axor Holding, the hotel arm of the former ACH conglomerate. It manages the Ljubljana hotels Grand Hotel Union, uHotel, Hotel Lev and Central Hotel as well as youth hotel The Fuzzy Log.

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