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The Hongkong And Shanghai Hotels, Limited Disclose First Quarter 2015 Unaudited Operating Statistics

May 15, 2015 Financial No Comments Email Email

At its Annual General Meeting held today, The Hongkong and Shanghai Hotels, Limited (HSH) (Stock Code: 00045) disclosed its unaudited first quarter operating statistics for 2015.

Commenting on the year-to-date results, HSH Chief Executive Officer and Managing Director Mr Clement K.M. Kwok said, “The first quarter results were generally in line with our expectations and reflect the seasonal nature of the hotel industry. We have experienced a mixed start to our business in 2015 and will work hard to drive revenue and contain costs across our operations.

The Peninsula Hotels

While average room rates remained stable, The Peninsula Hong Kong reported a 4% decline in RevPAR as compared with the same period last year, reflecting the generally weaker business environment in Hong Kong. The depreciation of the Japanese Yen has resulted in fewer Japanese travellers choosing Hong Kong as a destination.

We were pleased to see an 18% increase in RevPAR and a 4% increase in average room rates in other parts ofAsia, mainly due to improved occupancy levels at The Peninsula Bangkok amidst a more stable political environment in Thailand. The Peninsula Tokyo experienced strong demand. The Peninsula Beijing and The Peninsula Chicago will start commence their renovation projects and therefore will have a lower number of occupied rooms in the coming months as compared to the same period last year.

Hotels in the United States and Europe showed a 3% decrease in RevPAR. The Peninsula Paris has 200 rooms and is included in these statistics from Q3 of 2014, having been opened as from 1 August 2014.  Room inventory at The Peninsula New York was reduced from 239 to 235 from March 2015 due to the creation of a second Grand Suite. Business was negatively impacted by the cold weather in the US and the January terrorist attacks in Paris, although the higher average rates in Paris contributed to a 9% growth in average room rates for the US andEurope.

Commercial Properties

Residential Leasing: Occupancy at The Repulse Bay Complex increased, driven by higher occupancy in the de Ricou apartments following its recent overall renovation.

Shopping Arcades: The shopping arcades in The Peninsula Hotels, the Peak Tower and The Repulse Bay continue to be popular with premium brands for retail space. The Peak Tower and Repulse Bay are fully occupied. We are converting one floor in The Peninsula Manila into commercial space.

Offices: Yield from the Group’s office leasing increased by 13% year-on-year, due to the increased occupancy and average rental rates in The Peninsula Hong Kong Office Tower and St. John’s Building, located in Hong Kong.

Outlook and Developments

We have experienced a mixed start to our business in 2015. For the remainder of the year, our operating results will be adversely affected by the partial closure of The Peninsula Beijing and the disruption to The Peninsula Chicago as a result of their renovation projects. However, the extensive renovations in Beijing and Chicago will significantly enhance the competitiveness of those hotels. We are excited about the quality of the upcoming developments in London and Yangon, Myanmar. At the same time, our hotels business is well-balanced by the more stable earnings that are generated by our investment property division, particularly The Repulse Bay Complex and The Peak Complex.”

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