Peninsula warns on unrest as occupancy dives to 14pc

Business | Kevin Xu and Reuters 15 May 2020

Peninsula Hotels owner Hongkong and Shanghai Hotels (0045) yesterday said the occupancy rate at The Peninsula Hong Kong fell 56 percentage points year-on-year to 14 percent in the first quarter of 2020 as the coronavirus pandemic took its toll on travel and tourism.

On a quarterly basis, the local occupancy rate fell 22 percentage points.

In comparison, the hotel's occupancy rate was 35 percent in the first half of 2003 when the SARS epidemic struck the city.

The average room rate, which measures the average rental revenue earned for an occupied room per day, dropped 26.6 percent year-on-year to HK$4,395 in Hong Kong in the first quarter.

Revenue per available room, calculated by dividing total room revenue by the total number of rooms available for sale, slumped 85.2 percent year-on-year to HK$616 in Hong Kong in the first quarter.

The company said it is concerned about the political situation in Hong Kong and the possibility that the social unrest may continue and escalate during the summer of 2020.

The group's unaudited revenue for the first two months plunged 21 percent year-on-year. Net profit fell by 59 percent year-on-year to HK$494 million last year and revenue fell 5 percent to HK$5.87 billion. Excluding the non-cash investment property movements, underlying profit dwindled 35 percent to HK$480 million in 2019 from a year before.

In the aviation industry, passenger traffic is not expected to return to pre-crisis levels until 2023 at the earliest, and may suffer even more if new health rules impose an excessive cost burden, the International Air Transport Association said.

"Covid's effects on air travel are certainly going to last a number of years with no quick rebound to 2019 levels," the global airline body's chief economist Brian Pearce said.

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