The Savoy Hotel has reported an increased pre-tax loss of £19.6m for 2024, up from a loss of £17.5m in 2023, as it embarked on a significant renovation project and reduced its workforce.
The last time the five-star London hotel posted a pre-tax profit was in 2006, when it reported earnings of £5.9m in the six months to the end of the year and £7.3m for the year to 30 June, as reported by City AM.
Since then, the hotel’s losses have exceeded £554m.
Recent filings with Companies House reveal that the hotel’s revenue dropped from £63.3m to £59.7m, while its staff numbers decreased from 500 to 444.
The Savoy Hotel is jointly owned by Kingdom Holding Company in Saudi Arabia, Fairmont Hotels and Resorts, and Katara Hospitality, which is owned by the Qatari government.
The Savoy Hotel starts major work
In August 2024, the hotel commenced a phased refurbishment of its guest rooms and the Gallery restaurant.
The first phase involved the renovation of 118 rooms, some of which were temporarily taken out of service.
By April 2025, the first 31 of these rooms were back in operation.
Work on the remaining 87 rooms began in January this year and is expected to be completed around now.
The Savoy Hotel stated that its revenue and operating profit during the renovation period reflected the planned reduction in available rooms.
Revenue from its rooms fell from £40.8m to £38m over the year, while its food and beverage sales dipped from £19m to £18.4m.
It added: “The company’s financial position remains supported by its shareholder structure and access to a committed loan facility.
“Despite reduced room availability during the works, guest operations remained resilient.
“The Gallery restaurant reopened in November 2024 and performed strongly through the festive period, underscoring the importance of targeted reinvestment.
“Further renovation phases are scheduled through 2025 and beyond, with careful planning in place to limit disruption and safeguard service excellence.”
The Savoy Hotel’s UK parent company, Breezeroad Limited, has yet to submit its accounts for 2024.
In 2023, the firm’s turnover rose from £53.3m to £63.7m, though its pre-tax deficit expanded from £17.8m to £26.2m.
How its rivals are doing
City AM recently disclosed that The Dorchester’s owner had moved back into profit despite declining revenue in 2024.
The Dorchester Group recorded a pre-tax profit of £3.1m for its most recent financial year.
This figure represents an improvement from the pre-tax loss of £5.2m recorded in 2023.
During the same timeframe, the group’s turnover decreased from £464.2m to £458.7m.
The group noted that whilst its revenue grew in 2024, “inflationary pressure and the ongoing renovation at the group’s flagship The Dorchester had a negative impact on profit margins.”
It noted that its overall loss for the year of £1m incorporates a £16m impact from the revaluation of the group’s hotels and investment property. Despite an increase in revenue during its latest financial year, Claridge’s has reported a downturn into the red due to significant redevelopment work.
The hotel posted a pre-tax loss of £5.4m for 2024, a stark contrast to the £7.2m pre-tax profit it achieved in 2023. However, its revenue did see an increase over the same period, rising from £119.3m to £136.9m.
In a similar vein, The Ritz hotel in London reported a loss for the fifth consecutive year, despite a boost in turnover in 2024. The five-star establishment reported a pre-tax loss of nearly £3m for its latest financial year, down from the £10m loss it posted for 2023.
The losses continued with £16.5m for 2022, £32m in 2021 and £27.3m in 2020. The last time the hotel reported a pre-tax profit was in 2019, when it achieved £2.4m.
Despite these losses, its turnover saw an increase in 2024, rising from £36m to almost £43m.
The Ritz was purchased by Qatari tycoon Abdulhadi Mana Al-Hajri from the billionaire Barclay brothers for approximately £700m in March 2020.
