Emperor Hotel profits drop HK$100 million

The profits of Emperor Entertainment Hotel have declined 16 per cent year-on-year, amounting to almost HK$100 million, as profits dipped during the annual year of 2014/2015 to HK$504.3 million from HK$600 million.
The group that controls in Macau Grand Emperor Hotel and Best Western Taipa Hotel (formerly branded Inn Hotel Macau) saw its revenues drop 10.2 per cent year-on-year to HK$2.03 billion from HK$2.27 billion.
This decline was mainly explained by reduced visitor spending and the slowdown in the Chinese economy. However, the board of the group also cited protests in Hong Kong, the smoking ban on mass market gaming floors, new measures controlling cross-broader capital flows, and tighter visa restrictions as reasons for the decline.
The main source of revenue for Entertainment Hotel, which operates under a gaming licence held by SJM, was gaming, which accounted for HK$1.7 billion and generated 85.1 per cent of the group’s total revenue.
However, gaming revenue in Grand Emperor declined 15.6 per cent year-on-year from HK$2.1 billion.
While revenue from gaming in Grand Emperor went down the self-managed VIP rooms of the group increased revenue by 11.8 per cent to HK$504.7 million from HK$451.5 million. The 10 tables of the Emperor Hotel generated an average win per table per day of HK$243,000 from HK$218,000.
Best Western boosts revenue
During the financial year, the revenue from the two hotels increased 41 per cent to HK$303.7 million from HK$215.4 million due to the acquisition of Best Western Macau (named Inn Hotel Macau at that time) which was finalised in March 2014. Hotel revenue during the year was 14.9 per cent of the total revenue of the group.
During fiscal year 2014/15 Grand Emperor Hotel had an occupancy rate of 88 per cent and an average room rate of HK$1,258 per night, a decrease from HK$1,304 in 2014. Conversely, the average room rate in Best Western increased to HK$620 per night from HK$559 per night. However, the occupancy rate decreased to 93 per cent from 98 per cent.
In relation to food and beverage revenue, Emperor Hotel generated HK$129.7 million from HK$122.4 million in the previous year. Revenue from rental and other activities also increased to HK$45.2 million from HK$38.2 million.
In spite of declining gaming revenue during the year, the company is confident about the long-term prospects of ‘Macau as a premier global gaming and entertainment destination, supported by the city’s solid fundamentals including close proximity to the Mainland, continuous infrastructure improvements and attractiveness of cross-cultural experiences’.
J.S.F.