Hongkong & Shanghai Hotels reported a 13% increase in full year net profit to $386m for 2010, with revenue up 12% to £380m, but said that performance had varied "significantly" globally, as the economies around the world recovered at different speeds.
At the time of going to press Marriott International had announced that demand in North America was at the bottom end of expectations, and the operator of the Peninsula brand said that there was "strength in Greater China but recovery lagging in some parts of the US and Japan".
HSH CEO Clement Kwok said that, the hotels division had "recorded a mixed performance as economies around the world recovered at different speeds and travel demographics shifted from established long-haul markets to intra-regional and domestic markets. Challenges remained in some markets where we operate, including weak corporate business, oversupply of luxury hotels and political instability".
Nevertheless, Kwok said that the group experienced a strong surge in the second half of the year in markets such as Hong Kong and New York. The group is also on schedule to open its first hotel in Europe, in Paris in 2013. The group said that it continued to look for future new Peninsula hotel developments, but remained "very selective" in seeking opportunities in "exceptional" locations in key gateway cities.
The group is exposed to the wavering US economy through three hotels, but also has a site in Tokyo, which it said had see occupancy levels drop to 20% after the country's earthquake, from an average in the high 60%-level throughout 2010. The company has yet to asses the impact on its business in the aftermath of the earthquake, but said that it hoped to restore a healthy operating environment at the hotel "as quickly as possible".
For the nine-strong company, global variations mean that it suffers from both financial and geographical issues. With most of its estate in Asia and North America, however, it is at least clear of North Africa's current political instability.