Hong Kong and Shanghai Hotels' (0045) saw profit rose 7.6 percent from 2017 to HK$1.24 billion, including a net property revaluation gain of HK$523 million and said it will spend HK$684 million on upgrading the Peak Tram, and will be suspended for 2 months.
For hotel businesses in Hong Kong, the occupancy rate in the fourth quarter fell by 6 percentage points year-on-year to 78 percent. However, the average rent rose by 11.7 percent year-on-year to HK$6,223, resulting in an increase in the average rentable housing income by 4 percent to HK$4,855.
Chief executive Clement Kwok King-man emphasized that the evaluation of hotel businesses cannot only focus on occupancy rates or rental prices as the company will adjust them, the focus should be the average rentable housing income.
The hotel business in Hong Kong was temporarily stable and benefited from the influx of visitors, Kwok added.
Kwok pointed out that the company has not considered opening hotels in the Greater Bay Area, as he believes the Peninsula Hotel is more suitable to enter mature markets, and accelerate expansions of Peninsula products in mainland China.
The Peninsula Hotel projects in London, Yangon and Istanbul Hotel are under construction, while the three major developing hotels are scheduled to complete in 2021.
The underlying profit for 2018 fell 4.49 percent year-on-year HK$765 million, excluding the post-tax effects of unrealized property revaluation movements and other non-operating items.
It proposed a final dividend of 16 HK cents, indicating the full-year dividend rising 5 percent to 21 HK cents.