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Shangri-La Hotels posts 12% decrease in revenue for FY2009

KUALA LUMPUR: Shangri-La Hotels (Malaysia) Bhd posted a 12% loss in revenue to RM367.371 in FY2009, compared with RM415.447 million in the previous financial year. According to the group’s statement to Bursa Malaysia on Feb 24, the decrease was largely due to major renovations at Shangri-La Hotel Kuala Lumpur and Golden Sands Resort in Penang for most of 2009.

A significant slow down in the global travel industry also had a negative impact on the group’s hotel operations. Nevertheless, Shangri-La Hotel Kuala Lumpur posted a profit of RM2.245 million in FY2009, compared with a loss of RM4.334 million the year before, which included a charge of RM24.147 million for asset write-offs related to its renovation programme, it said.

Due to extensive renovations to guestrooms and public areas, which resulted in reduced room availability from February 2009 to end-November 2009, occupancy levels in Golden Sands Resort fell from 69% in 2008 to 41% 2009. The resort made a loss of RM5.48 million in FY2009, compared with a profit of RM16.41 million in the previous financial year.

Its Rasa Sayang Resort in Penang recorded a drop in occupancy from 66% in 2008 to 63% to 2009. However, revenue at the group’s Rasa Ria Resort in Sabah increased by 2% despite the softer market conditions. “The resort’s occupancy for the year, at 73%, was the same level as in 2008. The resort ended the year with a profit or RM31.70 million, a 7% increase from RM29.64 million in 2008,” it said.

The group’s investment properties saw an increase of 5% in total combined rental revenue to RM24.552 million. The growth was attributed to higher contributions from UBN Tower.

“Amidst a recovering global economy, demand trends in the business and leisure travel markets have begun to show some encouraging signs of improvement. However, there has been a slower recovery in demand from the group’s major long-haul travel markets, particularly the UK and Europe, due to ongoing economic uncertainty, it said.

The group’s hotel business is expected to improve gradually this year, and with the completion of extensive renovations at Shangri-La Hotel Kuala Lumpur and Golden Sand Resorts, both hotels should see better occupancy levels and improved operating results for 2010.

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