Luxury hotel operator Hongkong and Shanghai Hotels says the fallout from the United States economic slowdown, which kept its interim profit before non-performing items flat at HK$478 million, will continue to bite. The company's attributable profit rose 27 per cent to HK$1.61 billion after a HK$1.26 billion surplus in fair value of its investment properties in the first six months of the year. Waning corporate travel as a result of the US credit turmoil hit the group's Peninsula Hotel in New York the hardest, with revenue per available room or yield down 15 per cent. A bright spot was investment properties which generated a 19.27 per cent gain in operating profit to HK$229 million in the first half. 'The operating environment remains challenging,' group chief executive Clement Kwok King-man said yesterday. 'Our forward booking for hotel rooms is not overwhelming nor worryingly bad. As the peak season is coming up, we feel that the surprises are more on the upside.' Nevertheless, Mr Kwok said the Peninsula Hotel in Beijing was affected by curbs on foreign visitors' visas and a post-Olympics supply glut and its hotel in Bangkok was operating amid social unrest. He expected the company's investment property portfolio including flats in Repulse Bay, Peak Tower on Victoria Peak and shopping arcades at its Peninsula hotels, will perform strongly and cushion sluggish hotel performance in the second half. In the first half, most of the group's eight Peninsula hotels had fewer rooms booked as it charged a higher rate across the board. The iconic Peninsula hotel in Tsim Sha Tsui saw its average room rate hit a record HK$4,058 per room per night, a 10.45 per cent increase. However, room occupation dropped 4 percentage points to 73 per cent, curbing revenue per available room growth at 4 per cent. The Peninsula Hotel in New York charged an average HK$5,939 but its occupancy was 14 percentage points lower at 60 per cent. The room rate of the Peninsula in Beijing was raised 14.41 per cent to HK$1,849, with its occupancy standing 13 percentage points lower at 49 per cent. Revenue per available room dropped 8 per cent. The group's turnover rose 20 per cent to HK$2.39 billion. The interim dividend was lifted 8.33 per cent to 6.5 HK cents per share. The shares fell 2.73 per cent to HK$10.70 yesterday after the results announcement.
