Asian upscale hotels look to have delivered handsomely to investors, according to the results from two leading groups.
Shangri-La Asia saw net income rise 69% in 2007 and Hongkong & Shanghai, owner of the Peninsula brand, enjoyed a 64% rise in net income.
The US$340.9m of net income achieved by Shangri-La was ahead of analysts expectations and came off the back of sales of US$1.22bn, up from $1bn in 2006.
The company currently runs 52 hotels but has more than 48 projects in development. It plans to have 50 hotels in China alone within four years.
At Hongkong & Shanghai the net income of US$443m was from sales up 22% to $583m. The big surge in net profit came thanks to revaluation surpluses and EBITDA was ahead by 18%.
The group opened its eighth hotel during 2007, in Tokyo, the first new hotel since 2001. Despite the bumper figures, CEO Clement Kwok described 2007 as a mixed year for trading.
Beijing was challenging due to the large number of new luxury hotels opening ahead of the Olympics, Bangkok was affected by political events and the property in Manila was briefly seized by anti-government rebels.
The three hotels in the US had buoyant trading but Kwok warned that the slowdown there was likely to impact on results, both in the US and "inevitably" also in Asia.
In contrast to the growth at Peninsula, Shangri-La added 2,943 rooms of which 2,572 were in mainland China. It is continuing to grow in the country where it said the stable economic and political environment had "vindicated" its strategy. It said profits would be enhanced in the current year thanks to the cut in corporate tax rates in China from 33% to 25%.