Hotel Portfolio. Another Roller Coaster Year Due to Ongoing Pandemic 2021 has been another roller coaster year for China’s hospitality industry. Most of the pandemic-induced restrictions, including international travel controls and quarantine measures, remained in place during 2021. As a result, there was a sharp decline in the number of tourists and business travellers entering China. The absence of foreign travellers continued to impact the demand for hotel rooms. China’s hotels continued to rely on domestic travel. The intermittent coronavirus outbreaks, particularly during H2 2021, restricting interprovincial travel. The hotel sector was badly hit, setting back the recovery achieved in H1 2021. Xxx Xxxx XXXX’s hotel portfolio comprises four international chain hotels in four key cities in China. Their financial performance in 2021 was disappointing. All hotels, except Sheraton Chengdu Lido Hotel, have incurred operating losses. Despite the short-lived rebound in the second quarter of 2021 and the aggressive cost-cutting measures, the hotel portfolio recorded negative NPI in 2021. The loss was RMB31 million as compared to a loss of RMB51 million in 2020.
Hotel Portfolio. Many pandemic-related measures, including entry visa and border controls for foreigners to China, as well as quarantine measures, remained effective in China in 2021. The absence of foreign travellers continued to affect the demand for hotel rooms. China’s hotel business remained heavily reliant on domestic travel. However, the sporadic COVID outbreaks, particularly in H2 2021, led to the implementation of interprovincial travel restrictions in affected areas. As a result, the hotel industry was badly hit. Xxx Xxxx XXXX’s hotel portfolio comprises four international chain hotels in four key cities in China: Sheraton Chengdu Lido Hotel (69% interest), Hyatt Regency Liberation Square Chongqing, Sofitel Shenyang Lido (70% interest) and Grand Hyatt Beijing at Beijing Oriental Plaza. Revenue was RMB271 million (2020: RMB237 million). Despite the aggressive cost-cutting measures, NPI was a loss of RMB31 million (2020: a loss of RMB51 million).
Hotel Portfolio. Hui Xian REIT’s hotel portfolio consists of four international chain hotels: Grand Hyatt Beijing at Beijing Oriental Plaza, Hyatt Regency Liberation Square Chongqing, Sofitel Shenyang Lido (70% interest) and Sheraton Chengdu Lido Hotel (69% interest). Revenue of the hotel portfolio was RMB237 million (2019: RMB490 million) in 2020. The aggregate NPI recorded a loss of RMB51 million compared to the profit of RMB89 million in 2019. The COVID-19 pandemic has led to travel restrictions and quarantine measures around the world, bringing international travel to a standstill and creating unprecedented challenges for the hotel industry. In Xxxxx 0000, Xxxxx temporarily suspended the entry of foreign nationals, and the ban was subsequently lifted in September. There was a dramatic drop in international tourist arrivals in China during 2020. At the height of the pandemic in H1 2020, there were also restrictions on domestic travel within China. In H1 2020, occupancy rates and room revenues at our four hotels plummeted. Many corporate functions, banquets and weddings were also cancelled or postponed according to government guidelines. All these impacted the income of our hotels. Following the easing of COVID-19 preventive measures and resumption of trans-provincial travel in H2 2020, there was a notable improvement in our hotels’ business. The pace of recovery varied across the cities.
Hotel Portfolio. Hui Xian REIT’s hotel portfolio consists of four five-star hotels: Grand Hyatt Beijing at Xxxxxxx Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx Lido Hotel (69% interest), Sofitel Shenyang Lido (70% interest) and Hyatt Regency Liberation Square Chongqing. The aggregate revenue was RMB231 million (2018: RMB266 million). NPI was RMB43 million (2018: RMB61 million). The drop was mainly due to the renovation works at two hotels as well as the general economic conditions.
Hotel Portfolio. Hui Xian REIT’s hotel portfolio comprises four international hotels in four key cities in China. Their businesses deteriorated quickly commencing late January when the COVID-19 outbreak started to spread across the country. The COVID-19 and the travel restrictions slammed the operations of the hotels during the Reporting Period. In late March 2020, the Chinese government has temporarily suspended the entry into China by foreign nationals. There was a sharp drop in the number of tourists and demand for hotel rooms. As a result, occupancy rates plunged to record low. Not just room revenue, but the business from restaurants, banqueting, conferencing and corporate events were also affected drastically. Despite the implementation of aggressive cost-cutting measures, including human resources management and deferral of capital expenditure plans, the hotel portfolio still incurred an operating loss during the Reporting Period. The aggregate NPI reported a loss of RMB44 million as compared to a profit of RMB43 million during the same period in 2019. As the capital city and political centre, the preventive measures in Beijing were particularly strict. Tourists and returning residents were subject to special quarantine measures either before or after entering Beijing. The “Two Sessions” was also postponed from March to May 2020 due to the COVID-19 pandemic. Hotels in Beijing recorded extremely low occupancy rates. The sudden spike of COVID-19 infections in mid-June in Beijing came as another blow. On 16 June 2020, Beijing raised its COVID-19 emergency response from Level 3 to Xxxxx 0, and tighter restrictions were implemented again in the capital city. During the Reporting Period, Grand Hyatt Beijing has recorded its worst performance since its opening 20 years ago. It has recorded operating loss since February 2020. Occupancy rate dropped significantly from 76.8% a year ago to 15.5%. Average room rate was RMB1,068 (2019: RMB1,284).
Hotel Portfolio. Hui Xian REIT’s hotel portfolio consists of four international hotels: Grand Hyatt Beijing at Xxxxxxx Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx Lido Hotel (69% interest), Sofitel Shenyang Lido (70% interest) and Hyatt Regency Liberation Square Chongqing. Due to the COVID-19 outbreak, travel restrictions have been implemented by many countries and such measures had completely changed the operating landscape of the hotel industry. In Xxxxx 0000, Xxxxx has temporarily suspended the entry by foreign nationals. There were also restrictions on domestic travel within China. As a result, there was a drastic drop in both international and domestic tourist arrivals. Room revenue and occupancy rates at our hotels plummeted. Bookings of corporate events, banquets and weddings were also cancelled or postponed according to government guidelines. All these hit the income of our hotels. The aggregate revenue of our hotel portfolio was RMB63 million (2019: RMB231 million) during the Reporting Period. The aggregate NPI recorded a loss of RMB44 million compared to the profit of RMB43 million for the corresponding period in 2019 despite the aggressive cost reduction measures that continue to be in place, including human resources management and deferral of capital expenditure plans.
