Millennium & Copthorne has revealed the full extent of the global downturn as profits and revpar tumble, with trading in the new year being particularly weak.
The upmarket hotel chain, owned by the Singaporian billionaire Kwek Leng Beng, said it was implementing a recruitment freeze across its 103 hotels, cutting back on new capital expenditure and slashing its dividend by 50 percent.Pre-tax profits slumped by 34.5 percent to £102.8m, and revpar fell 21.2 percent in the first five weeks of 2009.
Kwek Leng Beng, the chairman of the hotelier, said: “The group is anticipating that the next few quarters will present challenging trading conditions.”
In the US, revpar at its New York hotels was down 41 percent and 23 percent at regional US hotels. Revpar at M&C’s Asian hotels fell by 20 per cent. However London was steadier, down 4 percent.
The figures were well below market expectations and the shares tumbled over 17 per cent. M&C cut the final dividend to 4.17p a share, taking its full-year dividend down by half to 6.25p compared with 12.5p in 2008.
Mr Beng said: “In this current uncertain climate, it is difficult to predict with accuracy how long these conditions will continue to exist and when a correction and improvement in market sentiment can be expected.”
Richard Hartman, chief executive, said trading at its New York hotels had suffered from dramatic cut-backs in business bookings.
“You’ve got a choice of trying to go into hibernation or just toughing it out and getting through the other end,” Mr Hartman said. “But we are robust enough to run through this.”