Record room rates lift HK Hotels' earnings
Record-breaking room rates and yields at the Peninsula hotel in Kowloon helped drive up first-half profit before non-operating items of luxury-hotel owner Hongkong and Shanghai Hotels by 22 per cent to HK$484 million.
Attributable profit soared 75 per cent to HK$1.27 billion, or 89 HK cents per share. The figure took into account non-operating items such as a HK$1.25 billion property revaluation gain and a HK$160 million loss from divesting a planned hotel project in Indonesia.
The company raised its interim dividend 20 per cent to six HK cents per share.
Managing director and chief executive Clement Kwok King-man attributed the strong underlying profit to increases in revenue per available room (revpar), or yield, in the eight-hotel portfolio, as robust global economies spurred demand from business travellers and deep-pocketed tourists, particularly those from the mainland.
The average room rate at the 79-year-old Peninsula hotel rose to a historic high of HK$4,118 in April, compared with the previous high in 1996 of HK$3,687. The hotel's revpar in the month hit HK$3,274, compared with HK$3,095 in November 1996.
The hotel's room rate could climb even higher in the second half, a peak season 'with many tourists and corporate travellers,' Mr Kwok said.
Turnover grew 17 per cent to HK$1.99 billion, helped by marked growth in hotel income and the leasing of commercial and serviced flats.
An increased number of mainland guests at the Peninsula helped lift the average room rate in the first half 17.79 per cent to HK$3,674 and occupancy by four percentage points to 77 per cent. This sent the revpar 12 per cent higher.
The Peninsula in New York had the group's highest room rate on average, at HK$5,699, a 12.69 per cent increase on a year earlier, with its rooms 74 per cent filled. The hotel's revpar rose 18 per cent.
In Beijing, the Peninsula had a 15.67 per cent rise in average room rates in the first-half to HK$1,616 and an occupancy of 62 per cent. Competition will keep the room rate flat after the Olympics next August.
The group's 314-room deluxe Peninsula in Tokyo, which received its first guests on September 1, would contribute to earnings next year, the company said.
'The global economy and Hong Kong's tourism were doing pretty well,' said the head of Asian equity research of a US brokerage. 'I'd be surprised if the company, like other high-end hotels, wasn't doing well.'