Weaker pound drives London growth for Millennium & Copthorne Hotels

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The group has seven hotels in London (Source: Getty)

The weaker pound helped drive up profits at global hotel operator Millennium & Copthorne as visitors flocked to London in the first half.

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The figures

The group reported total revenue for the period of £485m, while pre-tax profit increased 12.5 per cent to £63m.

Revenue per available room (revpar) at Millennium's hotels in London averaged at £101.38 for the six months to 30 June. This marked a 10.7 per cent increase across seven London sites, including hotels in Mayfair, Knightsbridge and Chelsea.

Revpar also grew in New York, where Millennium has three hotels, to £144.90. But the figure fell slightly in the rest of Europe, and dropped in Asia, where the average was £69.89.

The fastest growth was in Australasia, where revpar increased 23.4 per cent.

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Why it's interesting

Revpar grew most in London during the first quarter, when it was up 14.5 per cent. Growth then slowed to 7.9 per cent in the second quarter.

While the group did not say whether this was a result of the terror attacks in the period, it did note that security costs increased following the incidents.

In the rest of the world, geopolitical tensions in South Korea caused a sharp drop in revenue for the group's Seoul hotel. It also noted a slowdown in Chinese visitors to major cities across Asia.

While New York revpar grew, the group said the city was underperforming, thanks to a decline in average room rate. But it has agreed a contract with Hilton for the management of One UN New York which will be rebranded as the Millennium Hilton as part of a plan to strengthen US operations.

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What the company said

Chairman Kwek Leng Beng said: "Group results improved in the first half of 2017 on both a reported and constant currency basis, by 12.5 per cent and 1.6 per cent respectively. However, there is continuing pressure on the profitability of our hotel operations, particularly in North Asia and New York."

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