Peninsula sees improvement
Hongkong & Shanghai Hotels Ltd’s Peninsula Hotel in Tsim Sha Tsui. Affected by Japan’s massive earthquake, the company’s Tokyo arm experienced a sharp fall in occupancy. Paul Hilton / Bloomberg |
Japan quake, flagship’s renewal plans soil the hotels’ sheets in Q1
The Hongkong and Shanghai Hotels Ltd, which operates The Peninsula hotels in many cities around the world, said Monday business performance saw general improvement in the first quarter compared with a year ago, but this did not prevent its stocks from slipping.
All the Peninsula hotels recorded an increase in average room rate and revenue per available room (RevPAR) – a closely watched performance measure – in the quarter, the Hong Kong-based group said on its website.
RevPAR increases for the Peninsula hotels in Hong Kong, other Asian regions and the United States were lifted 13 percent, 12 percent and 19 percent respectively during the period, it said.
However, affected by concerns about the radiation leakage following Japan’s massive earthquake in March 2011, its Tokyo arm experienced a sharp fall in occupancy, which is currently running in the 30 to 40 percent range, said the group.
Hongkong and Shanghai shares decreased HK$0.12 or 0.91 percent to close at HK$13.08 on its Hong Kong trading on Monday, compared with the 1.36 percent loss of the city’s benchmark Hang Seng Index.
“Its stock now trades below 250-day moving averages as besides the Japan earthquake, investors also worry that its upcoming renewal project in Hong Kong Peninsula Hotel will affect its business performance,” said Louis Wong, director of Phillip Securities.
In November 2011, the group announced it had approved plans for a complete renovation of guest rooms at the local Peninsula, expected to be undertaken in two phases from January 2012 to April 2013.
The renewal will increase the Hongkong and Shanghai’s three year capital expenditure program by around HK$350 million. This will disrupt its earnings during the renovation period, according to the group.
On the back of tourism recovery in Asia, Hongkong and Shanghai in March reported a full-year net profit of HK$3.01 billion in 2010, up 13.1 percent from the HK$2.66 billion a year earlier.
But performance of the hotels varied significantly in different locations, the group said, adding that business was strengthened in Greater China but recovery lagged in some parts of the US and Japan in 2010.
Hong Kong, which hosts the group’s flagship Peninsula, received a record-high of 36 million visitors in 2010, a notable increase of 21.8 percent over 2009, Hong Kong tourism board announced earlier.
The city’s overall hotel occupancy rates rose to 87 percent last year from 78 percent in 2009, while average achieved room rate (total amount charged for all rooms divided by number of rooms) also increased by 13.9 percent to HK$1,165, according to government data.
Hongkong & Shanghai operates nine hotels in Hong Kong, New York, Chicago, Beverly Hills, Tokyo, Bangkok, Beijing, Shanghai and Manila, with a total of about 3,000 rooms.
Peninsula Paris – its first hotel in Europe, has begun construction work and is due to open in 2013, according to the group.
China Daily
(HK Edition 05/17/2011 page3)
http://www.chinadaily.com.cn/hkedition/2011-05/17/content_12521024.htm