Hotel leader scores record $17m profit

By SIMON HENDERY

Although growth in international tourism helped to drive CDL Hotels' profit up 60 per cent last year, the company says it is working to reduce its dependency on overseas visitors.

CDL, the country's largest hotel operator, yesterday reported a record net profit of $17.1 million for the year to December 31, up 60 per cent on 2001.

Revenue from the company's 28 Millennium, Copthorne and Quality hotels was up 8.5 per cent during the year to $114.2 million thanks to increased occupancy (up 5.9 per cent) and average room rates (up 4.5 per cent).

Total group revenue - including the contribution from part-owned subsidiaries CDL Investments and Kingsgate International - fell 6 per cent because of a drop in Kingsgate's revenue.

CDL managing director Tsang Jat Meng said the company was continuing a strategy of reducing its exposure to the international market by boosting its domestic marketing.

"International tourism remains important. Tourism New Zealand continues to do well in promoting the country overseas," Tsang said.

"This being so, the threat of conflict in the Middle East and in Asia are still of concern."

He said the departure of United States carrier United Airlines and uncertainty about the impact of a union between Qantas and Air New Zealand were also factors which could affect international arrivals.

International visitors accounted for 63 per cent of CDL's guests last year, down from 65 per cent in 2001, and Tsang said he expected the ratio to fall to 60 per cent this year.

"Building up the domestic base will provide a buffer for any fluctuations in international visitor flows."

Tsang said CDL, which is 70 per cent owned by Britain-based Millennium & Copthorne Hotels, was seeing the benefits of an ongoing programme of major upgrades to its hotels.

Occupancy at Waitangi's Copthorne hotel was up 11 per cent and average room rates up 27 per cent after a $3.5 million renovation.

Tsang said the New Year had started positively with good trading results throughout the group. "Barring unforeseen circumstances, we expect another profitable year."

The ups and downs

* CDL Investments (60 per cent subsidiary)

The property-development company's revenue rose 21 per cent to $23.9 million as a result of an increased number of sales and a shift to focusing on properties at the higher end of the market.

The company reported a net profit of $6 million compared with a loss of $260,000 in 2001 after the sale of loss-making property services division Knight Frank. And it said it benefited from the strong property market last year, which had been driven by low interest rates, a competitive exchange rate and good levels of immigration.

* Kingsgate International (51 per cent subsidiary)

The Sydney hotel and property development company's operating revenue fell 33 per cent to $50.9 million last year as it completed sales of its Birkenhead Quays apartment development.

The company used up its remaining tax credits, and as a result net profit was down 6 per cent to $10.2 million.