Millennium & Copthorne Hotels said revenue per available room at its NZ assets grew by 8.2% in 2017, helping to drive hotel income up by 11.6% to $105.6m for the year to December.
The hotel group reported total revenue, which includes property sales, for the year of $187.3m, up from 2016’s $172m, and profit before tax of $74.9m, up 5.9%.
“The increases in revenue and profit from 2016 reflects both positive trading conditions in the tourism industry in New Zealand and ongoing positive sales activity from majority-owned CDL Investments New Zealand Limited,” said M&C.
“We expect 2018 to be another positive and exciting year for MCK. With the addition of Grand Millennium Auckland and M Social Auckland in particular, we expect to benefit from the growing number of tourist and business visitors.”
Last year saw the first full year of operations of Grand Millennium Auckland and, following a refurbishment and rebuild of the former Copthorne Hotel on Quay Street, the opening of M Social Auckland in Q4 of 2017.
The company also added The Waterfront Hotel in New Plymouth earlier this year, paying $11m for the 42-room hotel.
“The Waterfront Hotel, which will be branded a Millennium Hotel, sits in a different market to the Copthorne Grand Central New Plymouth. The acquisition will boost our supplier, customer and national networks, in turn benefitting both hotels,” said M&C.
Domestic customer campaigns and “ongoing initiatives to capitalize on the changing dynamics of visitors from China and South-east Asia” had helped drive yield in the hotel business.
“With an increase in occupancy rates, a resolution to the shortage of labour in the hospitality sector was crucial. To overcome this hurdle and retain talent in our hotels, we are pleased to report that MCK established a ground-breaking partnership and collaboration with the government and various institutions,” said M&C.
“Proactive management drove further gains as we adapted our systems to achieve better cost management, while improving the company’s customer preference ratings.”
However, the hotel group plans to be part of industry action against Auckland council’s targeted accommodation rate.
“In July 2017, Auckland Council narrowly voted to introduce a controversial targeted rate on a selection of accommodation providers. This discriminatory form of tax by the Auckland Council, now implemented, has garnered strong opposition from the accommodation industry in Auckland who intend to initiate a judicial review of the Council’s targeted rate in 2018.”
Its property investment and development business, CDLI, announced a record operating profit after tax for the year of $32.2m, up from 2016’s $27m.
M&C said it would pay all shareholders a fully imputed dividend of 6 cents per share, up 20% on 2016’s dividend.