Revpar falls 11.5% in London for Millennium & Copthorne

Millennium & Copthorne has reported an 11.5% fall in London revpar to £98.03 for the first nine months of 2018.

The decline was largely down to the July closure of the Mayfair hotel. Millennium & Copthorne said that the refurbishment of the hotel, which first started in November 2017, was on track to be completed in early 2019. The cost of the work is predicted to come to £50m.

Average room rate in London was also down 5.4% to £125.64 for the period.
If the hotel is excluded from the figures, revpar for London was up 5.6%.
Worldwide total revenue for the first nine months of 2018 fell by 2.4% to £730m, while revpar decreased by 3.8% to £79.26.

Chairman Kwek Leng Beng said: "The group experienced mixed trading results for the first nine months of the year, with hotel revenues flat for the period on a like-for-like basis and lower profit due to continuing cost pressures.

"The hospitality sector is facing challenging trading conditions, including significant supply growth, technological ‘disruption', industry consolidation and rising minimum wage requirements and labour costs in key jurisdictions. These challenges, which are impacting the availability of talent and reducing margins, are exacerbated by geopolitical headwinds, such as the uncertainty surrounding Brexit and global trade tensions.

"The group will address these issues through product innovation, tighter cost control and by flattening the management structure to enhance our competitiveness. The group also continues to focus on delivering value from significant capital expenditure projects in addition to the repositioning of the Mayfair property as a five-star deluxe hotel and the development of our new hotel and residential apartment complex in Sunnyvale California, which broke ground in October 2018."
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