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Celine Sun

Last year was a tough one for the Kadoorie family's Hongkong and Shanghai Hotels, owner of the luxurious Peninsula hotels.
Turnover dropped 15 per cent to HK$4.2 billion as the financial crisis, swine flu and an oversupply of hotel rooms in major cities robbed it of five star corporate and tourism customers, causing underlying net profit to fall 61 per cent to HK$315 million.
However, due to the revaluation of investment property, the company was able to record a 946 per cent increase in net profit on paper to  HK$2.29 billion.
Despite business picking up from the end of last year, the hotelier said revenue had not yet returned to pre-financial crisis levels. 
But the company remains optimistic, said chief executive and managing director Clement Kwok King-man,  especially with the grand opening next week - after a five-month trial run - of its Shanghai Peninsula hotel which is expected to benefit from the World Expo.
Unlike in Beijing, where many hotel operators are still suffering from a post-Olympic Games oversupply of rooms, Kwok did not think the same situation would arise in Shanghai. 
'Firstly, the expo will last more than five months, much longer than the Olympic Games; secondly, there are relatively fewer hotels in Shanghai than Beijing and we will also try to secure customers through various ways rather than depending on this event,' Kwok said. 
Last year, the average room rate at the Peninsula hotels in Hong Kong, New York, Chicago, Beverly Hills, Tokyo, Bangkok, Beijing and Manila and Quail Lodge Resort  in California ranged from HK$974 to HK$5,317, sliding by between 4 and 36 per cent compared to a year earlier. Occupancy lingered between 34 and 62 per cent, compared to a range of between 50 and 71 per cent in 2008. 
Looking ahead, the company said the construction of the Peninsula Paris, in which it has a 20 per cent stake, was expected to start this year, with completion due  in 2012. It will also take over the management of the former British consulate in Waitan- yuan, Shanghai which is being turned into a government guest house with a retail, restaurant and exhibition complex. 
Kwok said the company was seeking further expansion in markets with long-term prospects including cities in China and India. London  was also a possibility. 
The company proposed a dividend of 9 HK cents per share for last year compared with 13 HK cents in 2008. Its shares closed flat at HK$11.34 yesterday.



Core profit down 61pc but Peninsula owner upbeat on expo