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Monday, March 20, 2017, 19:31

Peninsula Beijing renovations cut HSH earnings

By Oswald Chan

 Peninsula Beijing renovations cut HSH earnings
Visitors taking pictures in front of the Peninsula Hotel in Tsim Sha Tsui. The HongKong and Shanghai Hotels (HSH), owner of the hotel, reported a 32.5 percent plunge in its profit attributable to shareholders for 2016. (Edmond Tang / China Daily)

Hong Kong – The HongKong and Shanghai Hotels (HSH) posted a 32.5 percent plunge in profit attributable to shareholders for last year, hit by partial closure of the Peninsula Beijing for an extensive renovation project.

Hong Kong should do more to lure more high-spending visitors to the city so that we can benefit

Clement Kwok King-man, Chief Executive, HongKong and Shanghai Hotels

Hong Kong’s oldest listed conglomerate, owning and operating the Peninsula Hotel brand as well as commercial properties and clubs and services in major cities, said earnings for the 12 months to December 31 were HK$675 million (US$87.1 million), down from HK$1 billion for 2015.

HSH declared a final dividend of 15 HK cents, taking the total for 2016 to 19 cents per share, 5 percent lower than the payout for 2015.

The company expected all 230 renovated guest rooms in the Peninsula Beijing would be operating by the middle of this year which should boost average room rate at least 50 percent.

HSH anticipated the underlying hotel business in Hong Kong should further stabilize this year.

"We have seen stability in hotel room occupancy rate and retail tenant leasing for the Peninsula Hong Kong in January and February this year, though it is difficult to give a prediction number for the entire year of 2017,” HSH Chief Executive Clement Kwok King-man said at a press conference on Monday.

"Hong Kong should do more to lure more high-spending visitors to the city so that we can benefit,” Kwok added.

The Peninsula Hong Kong’s revenue dipped 4 percent to HK$1.29 billion last year while room occupancy declined 1 percent. The average room rate climbed 2 percent but revenue per available room remained flat.

Visitor arrivals dipped 4.5 percent in Hong Kong last year as the number of visitors from the Chinese mainland declined. Retail sales in the city plunged 8.1 percent in the same period.

Looking ahead, the conglomerate will focus on the three Peninsula hotel projects in London, Istanbul and Yangon as the main engine of profit growth.

HSH is investing 150 million euros (US$161 million) in The Peninsula Istanbul which is scheduled for completion in 2019.

The Peninsula London and Peninsula Yangon are both scheduled for completion in 2021. HSH has earmarked 600 million pounds (US$744 million) and $100 million to develop the London and Yangon hotel projects respectively.

oswald@chinadailyhk.com

 

 
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