M&C hit by rocketing insurance bill

MILLENNIUM & Copthorne Hotels, whose New York Hilton hotel was devastated by the attack on the Twin Towers, has seen its insurance premiums rocket by £3.5m, exacerbating a sharp slump in profits.

But chief executive John Wilson was not complaining, having already received $19m (£12.3m) of its insurance claim for the Millennium Hilton, which was a mere 20 metres from the South Tower of the World Trade Centre. The hotel has been closed since 11 September but M&C hopes to reopen it in the middle of next year after a $30m refurbishment.

Wilson said: 'Everybody is paying higher premiums, but the insurers have been hit by some massive payments. At least it has focused people's attention on the quality of their coverage.'

M&C's pre-tax profits in the six months to 30 June fell to £25.6m from £46.2m a year earlier on turnover of £283.8m against £313.5m. It was forced to cut prices to fill its hotels.

Wilson was pleased with the result, however, saying the previous six months had seen profits of only £8m. He was confident that 2002 as a whole would beat last year. The group underlined its confidence in the improving trend with an interim dividend of pegged at 4.2p a share.

London continued to be demanding, with revenues per available room falling 11% compared with a year earlier. Its Asian operations were helped by the World Cup in Japan and Tokyo.