Kerry Group’s luxury hotel chain Shangri-La Asia reported net losses for the first half of 2015 and said a weak outlook for the global economy and the depreciations of the Chinese renminbi would likely result in deeper losses.
Shangri-La Asia operates the Shangri-La, Kerry and Traders hotel chains. The company reported a net loss of U$900,000 for the first six months of the year, down from net profits of US$37.8 million in the same period in 2014. Losses in China alone were $34.3 million compared to US$15.5 million.
“The group’s hotels in general continue to face a challenging business environment characterised by weakening local currencies which have reduced the affordability of overseas travel for many; lower profits in US dollar terms; weak demand from key markets, especially for some of the luxury hotels in the portfolio; and oversupply of hotel rooms in certain cities in mainland China,” the company said in a statement to the stock exchange. “Given the significant impact of the hotel portfolio on the overall operating results of the group and the recent depreciation of the renminbi, the group’s operating profits are expected to be materially lower than those of the previous year.”