Hongkong and Shanghai Hotels earnings fall
Hong Kong – 20 March 2017 –
Hongkong and Shanghai Hotels, owner of the Peninsula Hotel chain, recorded a worse-than-expected 32.5 percent slump in 2016 earnings as escalating geopolitical uncertainties from Brexit, US presidential elections and global terror attacks dampened tourist sentiment.
Net income came in at HK$675 million (US$86.94 million), compared with consensus estimates of HK$684 million, according to a Reuters poll of analysts. Group revenue fell a smaller-than-expected 1.9 per cent to HK$5.63 billion, the South China Morning Post reported.
“The ‘Brexit’ vote, the US presidential elections, mixed economic performance in many of the countries in which we operate and continued terrorist incidents and threats all pose uncertainties to our business,” said Clement Kwok King-man, chief executive of Hongkong and Shanghai Hotels.
“In addition, sentiment in our main market of Hong Kong was negative towards tourism and retail business for much of 2016 although we believe we have seen some stabilisation since.”
Occupancy rates among luxury hotel operators have been under pressure amid currency volatility and global economic headwinds, prompting many to lift room rates in an attempt to boost overall revenue.
Hongkong and Shanghai Hotels has raised its revenue per available room by as much as 4.3 percent more than the market average since 2012, according to a survey by global consultancy OC&C Strategy Consultants of 25 leading global hotel groups.
The Peninsula Hotel in Tsim Sha Tsui booked a 4 per cent on year drop in revenue while its occupancy rate decreased by 1 percentage points from last year.