HOTELIER Millennium & Copthorne (M&C), a unit of Singapore’s City Developments, says it is planning a project to convert the Copthorne Orchid Hotel Singapore into condominiums.
‘This is expected to generate cash and profit from an alternative use of an asset and save an estimated £10 million (S$22 million) of maintenance expenditure required to retain the property in its current use,’ the UK-based group said yesterday, in announcing its 2009 results.
It reported that trading had improved towards the end of 2009 and into 2010 as it reported full-year pretax profit at the top end of expectations.
M&C, which operates 120 hotels in 19 countries, said pretax profit fell 20 per cent to £81.9 million. Forecasts had ranged between £68 million and £81 million, with the consensus at £77 million, according to a Reuters Estimates poll of six analysts.
Revenue per available room (RevPAR), a key industry measure, dropped 6.2 per cent to £53.62 but the rate of decline slowed in the third and fourth quarters. In the fourth quarter, RevPAR increased in London, compared with the previous year, while the rate of decline slowed in New York and Singapore.
‘We were anticipating stronger demand towards the end of the year and the actual results for the fourth quarter have exceeded our expectations,’ said chairman Kwek Leng Beng. The improvement has continued into the current year, with group RevPAR up 3.5 per cent in the first five weeks. He said, however, it was too early to predict the trading performance for 2010. ‘We are encouraged by the signs of stability in some of our markets, while conditions remain challenging in others.’
On Tuesday, InterContinental Hotels, the world’s biggest hotelier, warned trading will stay tough until business travellers return in greater numbers, putting pressure on its shares after 2009 profit fell 34 per cent. US rivals expect bookings to improve, with Sheraton owner Starwood Hotels & Resorts looking for flat to 5 per cent RevPAR growth in 2010 and Marriott seeing RevPAR up 2 per cent to down 2 per cent. M&C shares closed on Thursday at 376.5 pence, valuing the business at £1.17 billion.
Source: Business Times, 20 Feb 2010