Hotel trust sees better business in second half

Langham Hospitality Investments (LHI), the hotel-focused business trust spun off from Great Eagle, expects its performance to improve this year with higher variable rental income in the second half, a traditional peak season for hotels in Hong Kong.

Since LHI was listed on the stock exchange on May 30, the reporting period consisted of only 32 days through June 30. During this time, it said, distributable income amounted to HK$39.1 million, with distribution per share stapled unit at 2.11 HK cents.

LHI, which includes three hotels in Hong Kong, said occupancy rates were up to 93.3 per cent in the first half. Average room rates for the three hotels - The Langham, Langham Place Hotel and Eaton - were HK$1,159 to HK$2,254 per night in these six months.

"Despite increased volatility in the global financial markets since the listing of the trust, the fundamentals of the hospitality sector in Hong Kong have remained stable. On the demand side, arrivals from the mainland are expected to have continuous growth," said chairman Lo Ka-shui.

With planned infrastructure projects and expansion of existing projects such as the cruise terminal in Kai Tak, more leisure and business arrivals should be expected, he said in the company's results announcement.

"Along with a low level of completion of new hotels from 2014 to at least 2016, we anticipate the performance of our hotels to be well supported by the favourable hotel market dynamics."