LONDON (Alliance News) - Millennium & Copthorne Hotels PLC on Thursday said pretax profit in the first quarter of 2016 slipped, as hotels revenue declined on weak performances from major hotels and it warned that the trading outlook remains uncertain.
The hotel company said its pretax profit in the three months ended March 31 slipped to GBP18 million from GBP19 million in the first quarter of 2015 due to a fall in hotels revenue to GBP165 million from GBP170 million.
M&C said it experienced weak trading performances in its hotels located in major cities, while disruption from refurbishment work at Grand Copthorne Waterfront Hotel Singapore and renovation at ONE UN New York also hit revenue.
Revenue per available room fell by 2.6% to GBP60.02 from GBP61.60, which M&C said resulted from lower occupancy and room rates in most regions it operates in, including New York, London and Singapore.
Total revenue, however, grew to GBP192 million from GBP189 million thanks to higher contributions from property income, mostly relating to a land sale in Christchurch, New Zealand, and an increased contribution from Millennium Mitsui Garden Hotel Tokyo, as well as favourable movements in foreign exchange rates.
"The decline in performance reflects challenging conditions facing some hospitality markets as a result of political and economic uncertainty, structural change within the industry including the growth of 'sharing economy' lodging, online travel agencies and industry consolidation," Chairman Kwek Leng Beng said in a statement.
M&C said it has responded to those conditions by making a number of senior executive appointments including a global head of branding and marketing, regional heads in Asia and the US and a chief financial officer, who will be joining in July.
"Once they have familiarised themselves with the group's business, these senior executives will implement our core strategy of driving revenue and profit from owning and operating hospitality assets over the long term," Beng said, although he added that the trading outlook still remains "uncertain".
Shares in the company were down 4.1% at 425.70 pence shortly after market open.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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