Millennium & Copthorne under pressure in Asia

With revenue per available room (revpar) down 0.1% in the quarter to £77.66, group revenues for the quarter were down 2.8% to £211m, meaning for nine months it was up 3%.

Revpar was dragged down by the 9.6% decline across Singapore and Rest of Asia, while London and New York revpars also dipped because of room closures during refurbishment at the Millennium Bailey in London and ONE UN in New York.

Stronger sterling impacted translation of results, contributing to growth in the group's reported currency revenue, with constant currency revenue up 1.3% and like-for-like revenue decreased by 0.8%.

Pre-tax profit slumped 28% to £36m and earning per share 33% to 7.3p, which the company blamed mainly on "adverse trading conditions in Asian markets", particularly Singapore, which is also facing increasing pressure on labour costs.

Chairman Kwek Leng Beng said the revenue and profit pressure on Asia was unlikely to relent, with slower economic growth in China and higher operating costs.

Regionally, he said Singapore was "unlikely to stabilise until the end of 2017" as hotel room inventory continues to grow, noting that visa restrictions were holding back growth in Taipei's mainland Chinese visitor numbers, while Seoul was still recovering from lower visitor numbers after a viral outbreak in May.

"Trading conditions elsewhere were more benign although we remain cautious about the outlook in New York and London," added.

Looking to the final quarter, group revpar was up 1.6% for the three weeks ended 21 October 2015 on a constant currency basis, boosted by recent acquisitions of Grand Hotel Palace Rome and Hard Days Night Hotel, or up by 1.1% if they are excluded.

In the period, London was down 0.4%, New York down 2.3%, Singapore down 1.9% and rest of Asia down 5.6%. Revpar was up for rest of Europe 8.0%, Rest of US 14.1% and Australasia 3.6%.

Long-planned upgrades to hotels in Mayfair and Knightsbridge are hoped to begin in 2016, which will eventually re-position both appeal to higher yielding customers but in the interim will reduce room inventory.

MLC's share price was down 3.13% to 498.90p by 0930 GMT.