Millennium & Copthorne Hotels has reported a 10.7% increase in London revpar for the first half of 2017, driven by higher tourist numbers as a result of the weak pound.
In its half year results to 30 June 2017, the company reported that revpar in the capital grew by 14.5% and 7.9% during the first quarter and second quarter respectively. Revpar across the first six months of 2017 increased to £101.38, with growth in both average room rate and occupancy.
Average room rate and occupancy at the Bailey’s hotel in London continued to improve after its refurbishment last year. Refurbishment of the Millennium Hotel London Mayfair is planned to commence later this year and is estimated to cost £40m, while the refurbishment of Millennium Hotel London Knightsbridge is anticipated to commence in 2018.
Overall, the group’s UK hotels were impacted by increased security costs following recent terrorist attacks, as well as pressure on labour supply and operating costs.
In constant currency, global group revpar grew by 4.9% during the first six months of 2017 with increases in occupancy and average room rate of 3% and 0.5% respectively. Group revenue increased by 16% to £485m, or by 4.3% in constant currency, with increased contributions from hotel trading and property. Profit before tax increased by £7m or 12.5% for the six-month period.
Chairman Kwek Leng Beng said: “Group results improved in the first half of 2017 on both a reported and constant currency basis. However, there is continuing pressure on the profitability of our hotel operations, particularly in North Asia and New York.”
In the UK Millennium & Copthorne has 21 hotels: 13 under the Copthorne brand, five Millennium hotels and three unbranded, Bailey’s and Chelsea Harbour in London and Hard Day’s Night in Liverpool. CDL Hospitality Trusts, in which the group owns a 37% stake, acquired the 165-bedroom, five-AA-star Lowry hotel in Manchester for £52.9m in May.
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