Millennium and Copthorne hotels sees 8.1% increase in revenue from two openings
Millennium and Copthorne hotels have reported an 8.1% increase in revenue to £880m due to the opening of two hotels in New York and Auckland.
The Millennium Hilton New York One UN Plaza re-opened in September 2016 after refurbishment, and the Grand Millennium Auckland joined the group in September 2016.
For the year to 31 December 2017, group revenue per available room increased by 7.9% to £82.78 (2016: £76.71), Total revenue grew by 8.9% to £1,008m (2016: £926m), including foreign exchange gains of £46m and profit before tax increased by 36.1% to £147m (2016: £108m).
This included impairment charges of £38m, net revaluation gains of £9m and reversal of impairment of the group's shareholder loan to Fena Estate Co of £12m.
Chairman Kwek Leng Beng said: "The increase in 2017 hotel revenue was attributable mainly to a full year of trading at two of our hotels: Millennium Hilton New York One UN Plaza and Grand Millennium Auckland.
"Performance was impacted by industry-wide factors, including political instability in Korea, the unabated growth in popularity among customers of online travel agents and alternative lodging options; and rising costs, especially in London, where Brexit is impacting a hospitality labour market already affected by minimum wage legislation.
"Our New York business will take some time to restore profitability in light of strong union operating environment, union driven wage increases and the continuing growth in room supply."
In January 2017, the group received building permit approval for the Yangdong development project in Seoul. Construction is intended to commence soon.
The group also intends to start construction this year on a 263-room hotel and a 250-unit residential apartment block in Sunnyvale, California, which is expected to take 18 months to complete.
Phased refurbishment work on Millennium Hotel London Mayfair commenced in the fourth quarter of 2017 and is scheduled to complete in 2019. Refurbishment of Millennium Hotel London Knightsbridge is also planned to start next year.
Last month, minority shareholders of Millennium & Copthorne Hotels rejected a bid from the majority stakeholder, City Developments Limited, to acquire the reminder of shares in the global business.
Millennium & Copthorne shareholders reject CDL bid >>
CDL bids for full control of Millennium & Copthorne Hotels >>
Millennium & Copthorne's annual results negatively impacted by weak pound >>
Videos from The Caterer archives
