Underperformance and refurbishments hit Millennium & Copthorne Hotels revenue
Millennium & Copthorne Hotels has seen revenue fall due to underperforming London properties and refurbishment works.
The hotel group saw total revenue in the first half of the year fall to £477m, compared to £485m the previous year. Hotel revenue slipped from £418m in the first six months of 2017 to £404m this year.
Revenue per available room (revpar) fell from £78.69 to £75.29, but despite this the group's pre-tax profits were up on the same period last year at £65m.
Group chairman Kwek Leng Beng said: "Results in the first half of 2018 were mixed. While North Asia and New Zealand saw higher revenue, our London hotels under-performed partly due to their slow adjustment to competitive market conditions in addition to the impact of refurbishment at our Mayfair property. Although New York revpar was up, mainly due to improvements at Millennium Hilton New York One UN Plaza, the region remains unprofitable. Singapore was down slightly.
"Since the close of the second quarter, we underlined our commitment to stepping up investment in group assets by closing the Mayfair hotel entirely at the beginning of July. We look forward to its re-opening as our flagship property in Q1 next year. Additional refurbishment projects in London and New York will be announced in due course."
The company boss said he was "cautious about the immediate future" due to volatile political and economic conditions, "especially Brexit", but group plans to step up investment in its properties will continue.
Jennifer Fox, the group's new chief executive added: "I am pleased to have joined Millennium & Copthorne and see there is opportunity to strengthen the company and drive results for our shareholders.
"Since arriving on 19 June, I have reinforced the leadership team with two key appointments in a group chief marketing officer and a head of human resources. In the past six weeks I have been reviewing the earnings profile and potential of our most important properties. A strategic plan is currently being developed."
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