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Chairman’s Statement

Chuan Spa at Langham Place, Mongkok, Hong Kong

Kong, EBITDA increased by a marked 207.3% from HK$76.6 million in 2009 to HK$235.4 million in 2010. The key factor there was the renewed profit contribution from The Langham London, which was operating at closer to its full inventory with 350 rooms in 2010 and achieved a higher occupancy thereof. EBITDA from the Hotels Division would have been higher, had there not been a one-off provision associated with the rebranding of the Xintiandi hotel in Shanghai.

In 2010, there were three additions to the hotel portfolio, namely, the 204-room Eaton Luxe in Nanqiao, Shanghai, the 376-room Langham Place, Beijing Capital Airport and the 357-room The Langham, Xintiandi, Shanghai. The first two hotels are operated under pure hotel management contracts, whereas the Group has a one-third equity stake in the Xintiandi property.

Continuing our strategy of building the global franchise of the Langham brand, we have in December 2010 acquired a 100% interest in a 330-room hotel redevelopment project in downtown Chicago. The redevelopment is currently scheduled for completion in 2013 and the hotel is expected to be branded a Langham. This investment is supported by its bottom-of-the-cycle valuation and is part of the Groups strategy to own hotels in strategic gateway cities that will anchor our hotel brand.

Hong Kong Hotels

The Langham, Hong Kong

The trend in corporate activities remained robust in 2010. The increased demand for hotel rooms, and hence a higher

Great Eagle Holdings Limited

level of occupancy, enabled the Hotel to raise room rates, especially in the higher-yield retail business. However, heightened competition in the market has led to slower banquet business, especially from the wedding segment. Nevertheless, with increased covers and average spend in the restaurants, revenue from food and beverage in 2010 managed to remain in line with 2009.

For the year 2010, the hotel achieved an average occupancy of 80% (2009: 73%) and average room rate of HK$1,779 (2009: HK$1,575 re-based*).

  • *

    The average room rate for our Hong Kong hotels in year 2009 has been re-based to include service charges, in line with industry practices.

Langham Place, Mongkok, Hong Kong

Room revenue was boosted by corporate and leisure travel, with significant pick up in average room rate in the last quarter of 2010. Corporate functions and the strong performance of the restaurants contributed to an 8% growth in food and beverage revenue in 2010, notwithstanding a slow down in wedding banquet business due to increased competition.

For the year 2010, the hotel achieved an average occupancy of 85% (2009: 76%) and average room rate of HK$1,487 (2009: HK$1,324 re-based).

Eaton Smart, Hong Kong

The hotel unveiled its renovated lobby and restaurants in the fourth quarter of 2010 and was re-branded as Eaton Smart Hong Kong. Active demand for rooms from both corporate and retail travellers allowed the Hotel to further increase its occupancy and to raise room rates towards the latter part of 2010. For the full year in 2010, Revenue Par Available Room (RevPAR) increased by 27% year-on-year to reach HK$782. On the other hand, with slower banqueting demand from the wedding segment, as well as closure of restaurants during the hotel renovation in the third quarter of 2010, revenue from food and beverage dropped by 12% year-on-year in 2010.

For the year 2010, the hotel achieved an average occupancy of 87% (2009: 78%) and average room rate of HK$900 (2009: HK$794 re-based).

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