External factors hit Millennium and Copthorne trading

External factors hit Millennium and Copthorne trading

Millennium and Copthorne Hotels saw pre-tax profit for 2015 fall by 5.6% to £152 million as revenue per available (RevPAR) room fell.

The group, which reported its full year figures to the London Stock Exchange this morning, blamed performance at its Asian hotels as the main contributor to the fall in RevPAR.

Although overall revenues were up 2.5% to £874 million, constant currency RevPAR decreased 1.3% in the year.

For the fourth quarter of 2015, RevPAR in constant currency fell by 4.1% and for the year as a whole RevPAR in Asia, including Singapore, fell 9%.

London and New York also saw RevPAR declines during 2015, due mainly to the impact of refurbishments at Millennium Bailey’s Hotel London and ONE UN New York.

As previously announced, the hotel group recorded a “net charge” of £43 million against pre-tax profits in 2015.

This included £76 million of losses relating primarily to four of the group’s properties in New York, Europe and Asia, offset by revaluation gains of £33 million on investment properties.

Profit before tax for the year fell by 42.0% to £109 million but excluding revaluation gains and impairment losses, pre-tax profit decreased by 5.6% to £152million.

Kwek Leng Beng, Millennium and Copthorne chairman said: “In 2015, global hospitality markets were impacted by falling commodity prices, mounting concern with regard to terrorism, health advisory travel alerts and uncertainty regarding growth of the Chinese market.

“These external factors, which negatively affected the year’s performance, are expected to continue in the current year. Although the short term trading outlook is uncertain, the group has a long term perspective.

“Management considers that asset ownership is key to creating long term value in a changing hospitality industry landscape. The group will therefore continue to focus on its strategy of ownership and management of hospitality real estate assets.

“In 2016, management will work on optimising returns on the group’s assets by undertaking refurbishment projects, whilst remaining vigilant with regard to controlling costs.”

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