Weak and uncertain global economic conditions have translated into a 10-percent drop in profits for Hongkong and Shanghai Hotels, the company that controls some iconic properties including the Peninsula Hotel in Hong Kong as well as hotels in Paris, New York and Chicago.
The company reported a 1-percent dip in revenue during the first half of the year to US$347 million, as the impact of a dwindling number of visitors from Mainland China along with weak demand in Europe and the United States filtered down to the company’s balance sheet.
Profits at the company’s flagship in Hong Kong’s Tsim Sha Tsui dropped 10 percent year-on-year in terms of revenue per available room to HK$3,439 (US$444) and the occupancy rate dropped 2 percent.
On the other hand, the revaluation of real estate boosted profits by HK$477 million ($61 million).
The company also blamed a weaker Japanese yen for the drop in revenue in Hong Kong, which led to fewer Japanese tourists and encouraged more tourists from Mainland China to travel to Japan instead.
The group is now launching construction in new deluxe hotel and mixed-use properties in London, Istanbul and Yangon, Myanmar.