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CHAIRMAN’S STATEMENT
favourable initiatives and aim to welcome 40.0 million
foreign visitors in 2020
(6)
in conjunction with the Tokyo
Olympics. The government’s approval of the integrated
resorts will likely also provide support for long term
tourism growth.
In Maldives, the near term outlook continues to be
challenging. Given that the room rates are priced in US
dollar, the relative strength of the US dollar against some
of the top source markets has affected demand and caused
a downward adjustment in room rates as a compensating
effect. In addition, the cautious consumer sentiment
towards discretionary spending in the high-end leisure
market and slowing growth in China may continue to
affect the performance of our Maldives Resorts. As such,
the Managers have been working with operators of both
resorts to improve the market mix as well as taking cost
containment measures.
For the Australia Hotels, rent contribution for FY 2016
was lower mainly due to negative currency translation and
lower variable income. With the subdued natural resources
sector outlook and increase in new hotel room supply
in Perth and Brisbane, the trading performance of the
hospitality sector will likely remain challenging. However,
the defensive lease structure of the Australia Hotels which
provides CDLHT with largely fixed rent will mitigate any
downside risks in the hotels’ performance.
The acquisition of Hilton Cambridge City Centre in October
2015 has augmented CDLHT’s portfolio performance in FY
2016. The positive influence of the rebranding exercise in
2016 coupled with the product uplift after its refurbishment,
has supported a yoy RevPAR growth of 11.9%. Looking
ahead, the weaker pound is likely to improve tourism flows
in UK and international arrivals are expected to increase
in 2017
(7)
. However, there will be economic uncertainty
due to the impending commencement of the formal Brexit
negotiations in March 2017, which may affect corporate
demand.
In New Zealand, the tourism sector continued to enjoy
strong growth, reflected by the 11.8% yoy growth in visitor
arrivals in 2016 to a record high of 3.5 million
(8)
. The surge
in tourism arrivals was supported by additional commercial
flight capacity serving Auckland during 2016, with new
international airlines being launched and new routes
being established. This has benefited our NZ Hotel, Grand
Millennium Auckland, which saw a robust yoy RevPAR
growth of 10.8%.
The Managers are optimistic about the outlook of the New
Zealand hospitality sector and the growth momentum is
likely to be supported by the increase in new international
air services and a strong events calendar. In 2017, New
Zealand will host a number of global sporting events,
including the World Masters Games, Lions Tour and
Rugby League World Cup, which are expected to increase
international visitor flows to Auckland. Grand Millennium
Auckland’s new variable lease structure allows CDLHT
to be strongly positioned to maximise the benefit of the
growth trajectory going forward.
The importance of broadening our asset base remains a
paramount consideration. Our geographically diversified
portfolio of quality assets is expected to continue to
provide CDLHT with the benefits of income diversification
and generate sustainable returns for our Stapled
Security Holders.
OVERVIEW AND FINANCIAL REVIEW
Grand Millennium Auckland
(6)
Nikkei Asian Review, "Japan prepares for mass influx of tourists", 11 January 2017.
(7)
TTG, "2017 could be ‘record year’ for inbound tourism", 30 December 2016.
(8)
Statistics New Zealand, "International Visitor Arrivals to New Zealand".
8