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Saturday, May 19, 2012

Shangri-La expects better performance this year

KUALA LUMPUR: Shangri-La Hotels (Malaysia) Bhd expects overall performance to improve this year as it completes the renovation of one of its hotels and expands its stable.

Shangri-La's profits slipped in 2011 as renovation at its second-best performing hotel Rasa Ria Resort in Sabah led to a sharp drop in occupancy.

Coupled with a lower occupancy and contribution from UBN Tower, the group posted RM60.56 million net profit on the back of RM429.73 million revenue. Its net profit in 2010 was RM69.9 million.

The renovation of Rasa Ria began in March 2011 and will be completed this month. It will see all the newly-renovated rooms back in the market in the second half of the year.

"The year will be better as Shangri-La KL's performance is going up and we will have Rasa Ria back," managing director Kuok Oon Kwong told reporters following the company's annual general meeting yesterday.

Shangri-La Hotel Kuala Lumpur will continue to be the group's best performer. Last year, it contributed RM161.87 million towards group revenue and a pre-tax profit of RM32.35 million.

Later this year, a Shangri-La-managed Traders Hotel will open in Puteri Harbour, Johor Baru.

The opening of several amusement and theme parks including Legoland, Hello Kitty Town, Little Big Club and a Lat-themed restaurant from September should augur well for the hotel.

In 2010, Shangri-La signed a heads of agreement with Teluk Datai Resorts Sdn Bhd (TDR) to form a 49:51 per cent joint venture to develop the resort. Khazanah Nasional Bhd has an indirect 70 per cent stake in TDR.

The resort development in Langkawi is conditional upon Shangri-La taking up a 20 per cent stake in Traders Hotel Puteri Harbour.

"We are still going through the legalities," Kuok said of the status of it taking the stake in Traders Hotel.

As for the Langkawi hotel, she said no agreement has been signed and expects that the earliest the hotel will be ready will be within the next three to four years.

Meanwhile, Kuok expects its hotel in Kuala Lumpur to feel an impact after the opening of the 412-room Grand Hyatt Kuala Lumpur in mid-2012. "There is bound to be some impact on all hotels and not just us when new rooms are added into the market," she said, adding that this is assuming the market does not grow.

Kuok said that there has been no scheduled renovation.

Over the past few years the group embarked on a complete makeover of the Rasa Sayang Resort and renovated the Golden Sands Resort, both in Penang. It also renovated Shangri-La Kuala Lumpur and, most recently, Rasa Ria.

By Business Times

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