A revival in the global hotels market, which allowed “aggressive” rises in rates for New York rooms, has helped Millennium & Copthorne achieved a doubling in profits.
M&C, which runs 87 hotels worldwide, said that underlying pre-tax profits rose to £55.0 million last year compared with £26.4 million in 2003.
The increase reflected a market rebound following the Sars epidemic, which affected Asian takings in 2003, and the September 11 attacks in 2001. All of the company’s Asian hotels achieved double digit growth in occupancy last year, with regional American hotels helped by the recovery in domestic air travel volumes to levels reached in 2000.
However, provincial room rates showed only a marginal rise to £52.91, less than half the £108.77 charged at M&C’s New York hotels after a 15 per cent price rise. At the refurbished Millennium Hilton hotel, takings, on a revenue per room basis, increased by 23 per cent.
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In London, where the average room rate rose to £79.79 last year from £73.85, M&C achieved a “strong improvement in business”, led by growth at the Millennium Knightsbridge.
“2004 was a pivotal year,” Kwek Leng Beng, the M&C chairman, said.
“We started the year facing the trading uncertainties caused by numerous external events. We have finished with a significantly higher hotel operating performance.”
The company also made a profit of £52 million from the sale of the New York Plaza, hotel, of which it owned half, and £2.7 million from the disposal of marina interests in Sydney.
Including exceptional items, profits soared to £94.8 million from £18.7 million in 2003.
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Tony Potter, the M&C chief executive, added in comments to a conference call that the group was planning to perhaps double the size of its chain in the UK, where the company currently runs 17 hotels.
“We’ve identified the specific locations,” he said.
“We’re working on concluding two management contracts as we speak and feel very confident that by the half year we’ll have some good news.”
M&C shares stood 13.25p higher at 401.5p in afternoon trade.