UpdateHongkong and Shanghai Hotels, owner of Peninsula chain, rings up 10 per cent fall in first-half underlying profits

Peninsula hotel chain owner Hongkong and Shanghai Hotels reported a 10 per cent fall in underlying first-half profits on a year ago on Monday, despite a property revaluation that boosted profits attributable to shareholders by 6 per cent.

“We have faced challenges in some of our key hotel markets, with weaker tourist arrivals in Hong Kong and weak demand during the winter first quarter in Paris, New York and Chicago,” chief executive Clement Kwok King-man told a news conference after the publication of  earnings for the first six months.

Group revenue for the first half dipped 1 per cent to HK$2.69 billion, hit by a dwindling number of mainland visitors to Hong Kong and weak demand in Europe and the United States  over the winter.

The group’s flagship hotel in  Tsim Sha Tsui,  its largest profit contributor, saw a 10 per cent year-on-year fall in revenue per available room,  an industry gauge of hotel profitability, to HK$3,439. Its occupancy rate decreased by 2 percentage points from last year.

A property revaluation gain boosted profit attributable to shareholders to HK$477 million, 6 per cent up on last year.

Kwok blamed a softening Japanese yen for its flagging Hong Kong business.