bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Sandy Li

The luxury hotel operator saw its interim profit plunge due to an exceptional loss

Shangri-La Asia yesterday reported an 88.31 per cent plunge in first-half profit, but the luxury hotel operator said it expected business to return to pre-Sars levels as early as next month.

For the six months to June 30, net profit fell to US$5.59 million, down from  $47.92 million a year ago.

Chief financial controller Madhu Rao said the decline in interim profit was mainly due to an exceptional loss of US$8.68 million from discarding fixed assets due to property renovations.

During the period under review, its two hotels in Hong Kong - Island Shangri-La and Kowloon Shangri-La - suffered a loss of US$7.2 million because of the Sars outbreak. Last year, the two hotels generated a profit of  $12.2 million.

Managing director Giovanni Angelini said he expected business to return to its pre-Sars level next month.

'Traditionally, September to November are the best months for the hotel industry,' he said.

He also expected next year to see an upward trend in room rates, which had been depressed since 1997,  considering the mainland's recent relaxation on its travel policy.

'I think [room rates] will move up by 5 to 10 per cent next year,' he said.

Mainland travellers accounted for about 13 per cent of the hotel group's total room sales in Hong Kong, he said.

'It will continue to increase in future,' he said.

However, he said mainland tourists' spending on hotel accommodation would not be as high as those from long-haul markets such as the United States and Europe.

'But it is just a matter of time ... all of us will benefit in the long term,' he said.

Mr Angelini said Shangri-La had four hotel projects under development in the mainland, while another six new management contracts would be added in the next six months.

The four hotels under construction are the Zhongshan Shangri-La, Pudong Shangri-La phase two, Fuzhou Shangri-La and Jingan Nanli Shangri-La, Shanghai.

He said the group was ready for expansion outside Asia and planned to expand its hotel portfolio to 70 in the next three to four years.

Company chairman Edward Kuok Khoon Loong said: 'Since most of the hotels' ongoing major improvement and renovations will be completed this year  or  early next year, the group believes that the renovated and upgraded products should be available for sale to coincide with the anticipated turnaround in business conditions in the region.'

An interim dividend of six HK cents was proposed against seven  cents in the previous year.



Shangri-La optimistic on recovery