Harbour Centre slips into net loss as Covid-19, social unrest sink luxury hotel occupancy in Hong Kong

The owner of The Murray and Marco Polo hotels, reports net loss of HK$1.28 billion versus a profit a year earlier
Business recovery in the second half would be challenging as the city faces a third wave of Covid-19 cases

Hong Kong property

Georgina Lee

Published: 10:55pm, 23 Jul 2020

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Harbour Centre Development, a luxury hotel operator controlled by Wharf Reic, has slipped into a loss in the first six months of this year, citing the impact of the coronavirus outbreak.

The company, which owns the Marco Polo Hong Kong and The Murray, incurred a net loss of HK$1.28 billion (US$165 million) through June 30, versus a net profit of HK$268 million a year earlier. Revenue dropped 18 per cent to HK$654 million.

Its two hotels only achieved 15 per cent in occupancy rate, sending room revenue down by 97 per cent. The unrelenting Covid-19 pandemic suggests a meaningful recovery for the sector is a long way off, it added in an exchange filing on Thursday.

“Covid-19 will continue to affect the Group’s businesses, as its duration and extent of impact are not easy to determine under this volatile situation,” the company said. “The local political issues and escalating Sino-US tension also cast great uncertainties over the outlook.”

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Hong Kong’s tough quarantine and travel restrictions

The gloomy assessment came as Hong Kong battles with a third wave of coronavirus cases. New daily infections hit a record high of 118 Thursday, bringing the total number of confirmed cases to 2,249 and deaths to 15.

The company also owns other investment properties in Hong Kong. It said these properties were struggling as tenants’ retail sales plummeted. The city retail sales tumbled 35 per cent during the first five months.

“The recovery of business in the second half of the year would be hugely challenging and serious recovery may take a long time when it starts,” it added. “A paradigm shift may also mean things will never be the same again.”

In China, the group’s 80 per cent-owned Suzhou IFS commercial building offers Grade-A offices and is to house a hotel, Niccolo Suzhou, slated for completion in 2021. Due to the pandemic-related lockdown measures, construction of the project was delayed and presale of the project stalled.

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