‘Horrid year’ for hotel chain
One of the largest hotel chains in the country has posted a small profit from its hotel operations.
Millennium & Copthorne Hotels chairman Colin Sim said its hotel operations performed better than anticipated with the profit of
$1.9 million before tax, 94 per cent down on 2019.
However, the hotel chain’s parent company, Millennium & Copthorne Hotels NZ, recorded a profit of $46m thanks to its residential land and property development businesses in New Zealand and Australia, which include CDL Investments in New Zealand. The $46m for the year to December 31, 2020, was 7.5 per cent below $49.7m in 2019.
‘‘Our 2020 results are almost entirely due to the performance of our property development operations through our majorityowned subsidiary CDL Investments, which had a very positive year despite the difficulties caused by
Covid-19, and sales of our apartment units in Sydney, Australia,’’ Sim said.
‘‘The headline numbers mask the fact that 2020 has been a horrid year overall for our hotel business, and its impact will continue to be felt well into 2021 and beyond,’’ he said.
Millennium & Copthorne’s 2020 revenue totalled $172m, 25 per cent lower than 2019’s $229.7m, and that was driven by CDL Investments and Australian subsidiaries, Sim said.
He warned that its hotel operations result in 2021 might be worse than in 2020. That was because the first three months of
2020 were similar to 2019 and contributed to the $1.9m before tax profit but in early 2021 its hotels had significantly lower occupancy.
Managing director BK Chiu said its hotel business in 2020 was devastated, while CDL Investments’ property development results were ‘‘remarkable’’. ‘‘Nevertheless, our strong balance sheet and an agile organisation set us up to manage the new demands for recovery and to make future investment decisions,’’ BK Chiu said.
In 2020, the hotel operations achieved 39.2 per cent occupancy.
Two of the company’s about 20 hotels are operating as managed isolation facilities – the Grand Millennium Auckland and M Social Auckland. ‘‘Unsurprisingly, our hotels’ revenue in 2020 was less than half of what we earned in 2019 and included what we received for the managed isolation hotels,’’ Sim said. The hotel operations received the wage subsidy from March through to June as well as the June extension and a final resurgence payment in September. In total the hotel operations received $9.5m and Sim said all of it was paid out to its employees. ‘‘We met the criteria to receive the subsidy, and we have been audited by the Ministry of Social Development on our use of the wage subsidy and they have found no issues,’’ Sim said.