Langham Hospitality Investments And Langham Hospitality Investments Limited 1Q 2015
Unique Exposure to the Attractive Hong Kong Hospitality Sector • International trade / finance hub and popular shopping / tourist Long-term destination Favourable • Structural growth in demand from mainland China Macro Trends • Cyclical growth from recovery in the long-haul market • Internationally recognised Actively • Increasing global presence of Langham branded hotels Managed Brands • Active manager with an “ owner- manager” mentality • Prime locations on the Kowloon peninsula Strategic • Major infrastructure and commercial centres under development Locations • Limited current and forecast future supply • Our objective is to provide stable distributions with the potential for sustainable long term growth of such distributions and enhancement in the value of the hotel portfolio • Accomplished through the lease structure, active asset management and ROFR from Great Eagle 2
Our Hotels are Strategically Located on the Kowloon Peninsula in Hong Kong Kowloon Peninsula, Hong Kong Prime Shopping Destinations Nam Cheong Prince Edward To Hong Kong Airport Mong Kok East Nathan Road Shopping & Mong Kok Olympic Tourist belt The Langham Yau Ma Tei International Commerce 2 Centre & West Kowloon Cultural District (under planning) Austin Jordan Kowloon Hung Hom Langham Place Hotel 3 Tsim Sha Tsui Canton Road Shopping Belt & To Hong Kong Tsim Sha Tsui Island office district Metro lines West Kowloon Terminus MTR station Guangzhou-Shenzhen-Hong Kong Express Rail Link (under construction) Eaton • Close proximity of key tourist and shopping belts, existing and expanding commercial districts and future infrastructure • Easily accessible via major roads, MTR stations, the Hong Kong International Airport and rail to mainland China 3
The Langham 4
3 Langham Place Hotel 5
3 Eaton 6
High Quality Portfolio High Quality Langham Branded Hotels Selected Awards The Langham • “Top 25 Hotels in China” and “Top 25 Hotels Location : Tsim Sha Tsui, Kowloon for Service in China” by TripAdvisor Travellers’ Year of commencement : 1994 HKTB rating : High Tariff A Hotel Choice in 2013 GFA (‘000 sq.ft.) : 375 • Two-star Michelin award for T’ang Court Number of rooms : 498 Facilities : 5 restaurants, 1 ballroom, • Named 5-Star Hotel by Forbes Travel Star Ratings 4 meeting rooms, Jacuzzi, health club, fitness centre Langham Place Hotel • “Top 25 Hotels in China” by TripAdvisor Location : Mong Kok, Kowloon Travellers’ Choice in 2012 Year of commencement : 2004 HKTB rating : High Tariff A Hotel • One-star Michelin award for Ming Court GFA (‘000 sq.ft.) : 580 • Condé Nast Gold List 2012 Number of rooms : 666 Facilities : 5 restaurants, 1 ballroom, • Spa Traveller Awards 2012 3 meeting rooms, Chuan Spa, fitness centre Eaton Hotel Location : Yau Ma Tei, Kowloon • Best Eco Hotel 2012 in Hong Kong Year of commencement : 1990 by HotelClub Hotel Awards (Hong Kong) HKTB rating : High Tariff B Hotel GFA (‘000 sq.ft.) : 339 • Capital Entrepreneur Green Enterprise Number of rooms : 465 Awards 2012 by Capital Entrepreneur Facilities : 5 restaurants, 3 ballrooms, 2 meeting rooms, fitness centre Three high quality Langham branded hotels with a combined 1,629 rooms strategically located on the Kowloon peninsula, Hong Kong 7
… and have a Balanced Mix of Room and Non -room Revenue Balanced Revenue Contribution (1) Wide Range of Non-room Revenue Sources 2.4% Range of award-winning facilities and services • Food and beverage • Banquet services • 40.4% Meeting and conference facilities • 57.2% Spa facilities Relatively stable even during the global financial crisis Strong demand from non-hotel customers Well positioned to benefit from Hong Kong’s growing MICE market Room Food and beverage Other hotel operations Award-winning Restaurants Quality Ballroom and Conference Spaces Michelin star-rated restaurants T’ang Court (two-star Michelin), Ming Court (One-star Michelin), Langham Place Hotel The Langham We believe that the majority of the Hotels’ food and beverage revenue was derived from customers who were not staying at the Hotels Note: 8 1. For the year ended 31 Dec 2014
During 2014, our Customers are Diversified in Terms of both Geography and Customer Segment… Diversified Geographical Origin of Customers (1),(2) Diversified Customer Segments (1) 4.8% 7.6% 7.7% 29.4% 29.3% 17.5% 51.3% 10.8% 6.9% 15.9% 8.4% 10.5% China Australia and NZ US Europe ex UK UK Rest of Asia Others Retail Corporate Travel trade Group Other Target Different Market Segments and Do Not Directly Compete with Each Other Customer Segment Breakdown (1) Average Room Rates (1) Geographical Origin of Customers (1),(2) (HK$) (%) (%) 2,295 1.6 5.2 12.5 1,871 3.9 5.8 4.9 7.8 7.5 7.8 23.3 16.8 33.5 29.8 26.5 13.6 1,214 6.5 4.9 7.0 7.3 21.0 7.1 16.9 9.6 11.4 8.1 5.8 10.7 13.9 11.4 59.1 10.3 49.5 49.1 34.9 31.5 23.2 The Langham Langham Place Eaton The Langham Langham Place Eaton The Langham Langham Place Eaton Hotel Hotel Hotel China Australia and NZ US Retail Corporate Travel trade Group Others Europe ex UK UK Rest of Asia Note: Others 9 1. For the year ended 31 Dec 2014 2. Based on self-reported data collected at the time of guest registration and have not been subject to audit or review by an independent third party. Such data excludes room revenue derived from airline crew and others from unidentified countries and other miscellaneous revenue and service charges
Our Hotels are Managed under the Internationally Recognised Langham Brands by the Hotel Manager, Langham Hotels International Limited Our Unique Position Description of the Hotel Manager • Langham Hotels International Limited is a wholly-owned subsidiary • Since 1865 of Great Eagle • Unique style • An operating track record of over 20 years • European heritage • One of the largest luxury hotel operators in Hong Kong • Classic charm • Local expertise and experience • Luxury bespoke service • Increasing exposure to other worldwide gateway cities Selected Awards of Hotels Managed by the Hotel Manager • Luxury in a modern setting • “Young at heart” style of service • Features all of the hallmarks of “The Langham” brand • Since 1990 • Mid-scale to up-scale brand • Embodies modern design • Value for money philosophy We believe strong brand recognition is one of the factors that has enabled the Hotels to command prices at the high end of their competitive market segments 10
2014 Final Results
Highlights of Final Results 2014 • RevPAR over the first three quarters of 2014 reached 4.3% RevPAR growth in 2014 • However, RevPAR declined by 10% in the fourth quarter of 2014 was dragged by protest activities in Q4 2014 • Full year RevPAR was flat in 2014 as compared with that in 2013 • F&B revenue at Langham Place Hotel dropped 9.3% y-o-y in Q4 Impact of the protest • At the Eaton, revenue from F&B rose 9.2% y-o-y in Q4 activities on F&B was mixed in Q4 2014 • For The Langham, F&B revenue down 0.6% y-o-y in Q4 • For the full year, profit excluding revaluation gain was HK$401.5m Distribution per share • Distributable income reached HK$558.8 m Stapled unit of • HK29.8 cents Distribution per share stapled unit for unit holders of HK29.8 cents • The lag effect of the protests also impacted business extending Outlook into 2015 • RevPAR continued to decline in January 2015, but the rate of decline has narrowed further 12
Q4 2014 Hotels operating performance in Q4 2014 Average Daily Rooms Available Occupancy Average Room Rate RevPAR Q4 2014 Q4 2013 Q4 2014 Q4 2013 Q4 2014 Q4 2013 Q4 2014 Q4 2013 The Langham, Hong Kong 496 495 88.3% 93.6% 2,409 2,446 2,128 2,289 Langham Place, Hong Kong 649 651 85.7% 94.3% 1,941 2,075 1,664 1,955 Eaton, Hong Kong 465 465 96.5% 97.6% 1,312 1,377 1,267 1,343 Occupancy Average Room Rate RevPAR Food and Beverages Y-o-y growth in 1H 2014 (in % pts) -5.3 -1.5% -7.0% - 0.6% The Langham, Hong Kong -8.6 -6.5% -14.9% - 9.3% Langham Place, Hong Kong -1.1 -4.7% -5.7% 9.2% Eaton, Hong Kong Respective markets High Tariff A Hotels -3.7 0.0% -4.1% High Tariff B Hotels -0.3 -4.8% -5.1% Note: 1. The Langham and Langham Place are classified as Tariff A hotels, whereas the Eaton is classified as a Tariff B hotel. 13
Hotels performance • In 2014, the hotel continued to house more individual arrivals from The Langham, Hong Kong Mainland China • Arrivals from most other markets declined in 2014 • Enjoyed decent growth in arrivals from Mainland China and other Langham Place, Asian countries throughout the first three quarters of 2014 Hong Kong • The most impacted hotel from the protest activities in Q4 • Accommodated more lower-yielding airline crew travellers in Q4 • The hotel was the least impact from the protests activities • However, it still faces pressure on occupancy in Q4 Eaton Hotel, Hong Kong • The hotel accommodated more lower yielding group travellers in order to maintain its high occupancy over Q4 • RevPAR for the portfolio was up 0.1% y-o-y in 2014 • Revenue from food and beverage rose 2.9% y-o-y in 2014, as banqueting business remained strong in 2014. • EBITDA of the hotel portfolio fell in 2014. 14
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