Stamford Land Corporate Ltd

Email This Print This

Operations Review

Hotel Operations & Management

The Group’s hotel operations and management business continued to deliver stable results in the financial year ended 31 March 2017 (“FY2017”). The Group reported an increase in total revenue from this segment of 3.4% from the previous financial year which was contributed by a modest increase in revenue per available room (“RevPar”) of 0.2% and appreciation of Australian Dollar (“AUD”) and New Zealand Dollar (“NZD”) of 2.3% and 5.1% respectively.

International visitor arrivals to Australia continued to increase and reached a record high at the end of 2016. This upward trend is set to continue in the financial year ending 31 March 2018 (“FY2018”). Demand for hotel rooms in Sydney and Melbourne is expected to remain strong and this will have a favourable impact of increasing room rates. However, secondary cities such as Adelaide and Brisbane will continue to experience pressure on RevPar as prevailing supply exceeds demand for hotel rooms.

SYDNEY

Stamford Plaza Sydney Airport ("SPSA")

  • SPSA was recently awarded The Best Airport Hotel in Australia/Pacific Region at the Skytrax World Airport Awards in 2017. As a choice hotel in the competitive Sydney airport precinct, SPSA reported a 3.4% improvement in RevPar in FY2017. Room revenue is expected to remain strong as domestic and international visitors continue to fly into Sydney.
  • Since its opening in September 2015, La Boca Bar and Grill (“La Boca”) in SPSA had been performing well, with an increase in revenue of 21.6% in FY2017. The Group continued its marketing efforts to promote La Boca as its anchor brand of restaurant and La Boca in SPSA as the choice restaurant for Argentinian cuisine within the Mascot vicinity in Sydney.
  • A refurbishment program on the rooms and lobby area is planned in FY2018 to enhance overall guest experience and to strengthen SPSA’s position as the best airport hotel in Australia/Pacific region.

Sir Stamford at Circular Quay ("SSCQ")

  • SSCQ reported another year of respectable results, with improvements in both rooms and food and beverage (“F&B”) revenue. The award winning hotel, recognised for its quality and service, continued to grow its occupancy levels and room rates, resulting in RevPar growth of 3.4% in FY2017.
  • Known for its popular afternoon tea offerings, SSCQ saw tremendous improvements in its F&B offerings despite operating in a highly competitive environment. To further strengthen its strong performance, SSCQ will undergo refurbishment of certain of its common areas in FY2018.

MELBOURNE

Stamford Plaza Melbourne ("SPM")

  • Total revenue for SPM declined by 5.8% as rooms and banquet facilities were progressively taken out of operation during the room refurbishment in FY2017. Occupancy levels and RevPar declined by 3.8% and 8.1% respectively. The refurbishment which comprised of the construction of 26 additional rooms was completed in September 2016, thus increasing SPM’s room inventory and enhancing its revenue growth potential thereafter.

BRISBANE

Stamford Plaza Brisbane ("SPB")

  • Despite a challenging year, SPB maintained its position as the top hotel in Brisbane. An increase in room supply over and above demand resulted in falling occupancy levels and declining room rates in Brisbane as hotels compete for market share. Despite less favourable market conditions, SPB reported a modest RevPar growth of 1.6% in FY2017.
  • A refurbishment program is planned for SPB as it strives to maintain its leading position in the competitive Brisbane market.

ADELAIDE

Stamford Plaza Adelaide ("SPA")

  • With the outlook for the Adelaide economy remaining weak, SPA reported a decline in RevPar of 3.2% in FY2017. On the F&B front, La Boca in SPA continued to perform well, with an increase in revenue of 4.9% in FY2017.
  • Cost efficiency management and productivity improvement remain the key focus for SPA in FY2018 as it strives to compete in a weak economy. A refurbishment program is also planned for SPA to maintain its competitiveness and grow its market share in the competitive Adelaide market. When the refurbishment is completed, overall guest experience will be enhanced.

Stamford Grand Adelaide ("SGA")

  • Despite the weak Adelaide market, SGA reported an increase in total revenue of 4.8% in FY2017 which was contributed by the increase in room and F&B revenue of 7.9% and 5.5% respectively. RevPar saw a modest growth of 1.6% in FY2017.
  • The extension work on The Grand Bar’s outdoor area to increase seating capacity was completed in December 2016. Plans on the refurbishment of the rooms are underway and once completed will augment revenue and reinforce SGA’s position as the only five star hotel in Glenelg.

AUCKLAND

Stamford Plaza Auckland ("SPAK")

  • SPAK recorded another year of good results, with an increase in total revenue of 8.0% which was contributed by the increase in room and F&B revenue of 11.2% and 1.1% respectively. With international visitor arrivals continuing to increase, SPAK was well-positioned to maintain its position as a choice hotel in Auckland, thus recording RevPar growth of 3.1% in FY2017.
  • The construction of the City Rail Link within the vicinity of SPAK may cause disruptions to its operations in FY2018. However, the Group expects this to have minimal impact on the Group’s financial results for FY2018.

PROPERTY DEVELOPMENT

  • The Group’s property development segment delivered a strong set of results for FY2017. Revenue increased by S$78.5 million and this was attributed to the settlement of 174 units in Macquarie Park Village (“MPV”). In addition, the Group obtained development application approval under the Urban Activation Precinct to construct an additional 60 units in the Melbourne Tower, bringing the total number of units in MPV to 712. Construction for the MPV is ahead of schedule and the development is scheduled to complete in 2018.
  • The Group sold two more units at The Stamford Residences (Auckland) and continues its ongoing marketing efforts to sell the remaining five units.

PROPERTY INVESTMENT

  • The Group made a significant impairment loss of S$10.9 million on Dynon’s Plaza, owing to the depressed Perth market and the shorter lease term remaining. There is, however, a three-year tenancy remaining and the property will continue to generate stable rental income.