15
ANNUAL REPORT 2014
CDLHT's Singapore Hotels Performance
FY 2014
FY 2013
Variance
Average Occupancy Rate
89.1%
87.4%
+1.7pp
Average Daily Rate
S$210
S$218
-3.7%
RevPAR
S$188
S$191
-1.6%
HOTELS PERFORMANCE FOR FY 2014
Singapore
Visitor arrivals to Singapore recorded a 3.1% yoy decline to 15.1 million in 2014
(3)
. The decline was mainly due to a drop in visitor
arrivals from China, the second largest inbound market for Singapore. The drop in Chinese arrivals could be attributable to the
disappearance of Malaysia Airlines flight MH370 and the political instability in Thailand. A ban on "forced shopping" tours by
China in October 2013
(4)
also impacted the Chinese arrivals to a certain extent. Despite the drop in tourist arrivals, CDLHT's
Singapore Hotels managed to achieve a record-high annual occupancy of 89.1% in FY 2014. However, average room rates
declined due to rate competition from increased new supply of hotel rooms and a cautious corporate spending environment.
As such, RevPAR dipped marginally by 1.6% to S$188 for the year.
Overseas
CDLHT's Australia Hotels in Brisbane and Perth experienced weaker performance in the year due to the slower pace of the
Australian economy and lower activity levels in its mining sector, but the effect was mitigated by the defensive lease structure
which provides CDLHT with a high proportion of fixed rent. Contribution from the Australia Hotels was down 9.4% yoy to
S$16.7 million in FY 2014, attributable to the weakening of the Australian dollar.
For New Zealand, Rendezvous Grand Hotel Auckland contributed S$10.2 million in FY 2014, up S$0.5 million from FY 2013 due
to the annual escalation of base rent and the stronger New Zealand dollar.
The Maldives Resorts registered yoy RevPAR growth of 3.1%
(5)
for 2014. The Maldives market, in which hotel rates are priced in
US dollar, has been feeling the negative impact of the progressive strength of the US dollar in the second half of the year which
has been compounded by the sharp depreciation of the Russian rouble. Despite this, the resorts contributed to an increase in
net property income of S$7.6 million in FY 2014, mitigating the decline from the Singapore and Australia Hotels.
The Japan Hotels have continued to perform well, registering a yoy RevPAR growth of 25.6%
(6)
for the last 13 days of 2014 in
which CDLHT owns the hotels. As the hotels were acquired on 19 December 2014, the contribution will only be recorded in
2015 as the financial impact of the contribution over the last 13 days in December 2014 was immaterial to CDLHT.
GROWTH FROM ACQUISITIONS
Expanding our geographical presence
(3) Singapore Tourism Board, International Visitor Arrivals, 11 February 2015
(4) BBC, "China moves to ban 'forced' shopping tours", 4 October 2013
(5) The yoy comparison assumes H-REIT, through its indirect wholly-owned subsidiaries, owns the Maldives Resorts for the year ended 31 December 2013.
(6) The yoy comparison assumes H-REIT, through its Japan trust, owns the Japan Hotels for the last 13 days of December 2013.
(7) Excluding acquistion costs and based on an assumed exchange rate of S$1.00 = ¥90.99.
Hotel MyStays Asakusabashi
Hotel MyStays Kamata
On 19 December 2014, CDLHT secured a strategic foothold in Japan with the acquisition of two Tokyo business hotels for a
purchase consideration of ¥5.8 billion (S$63.7 million)
(7)
which was fully funded by way of Yen-denominated debt.
