CDL Hospitality Trusts (CDLHT) has reported a 19.1% q-o-q drop in net property income (NPI) for the 1QFY2021 ended March to $19.8 million as travel restrictions continue to impact its business.
However, NPI grew 1% y-o-y for the quarter, in-line with revenue which grew 2.8% y-o-y to $34 million. The better performance y-o-y is mainly due to stronger contributions from New Zealand and Maldives properties.
Revenue per available room (RevPAR) for New Zealand and the Maldives grew 5.4% and 64.1% y-o-y respectively. The trust recorded sharp declines in RevPAR for the rest of its markets.
For its Singapore hotels, including W Hotel which was acquired in July 2020, CDLHT reports that despite a higher average occupancy rate for the quarter at 69.9% (from 54% in the 1QFY2020), the average daily rate was lower at $96 compared to $189 previously, resulting in NPI from Singapore hotels decreasing 31.2% y-o-y to $8.1 million.
The better performance of the Maldives properties follows the boost in tourism arrivals in March, primarily from India, Russia and Ukraine.
For its New Zealand portfolio, despite business attrition as borders remained closed, demand was supported by government bookings for isolation facilities, in addition to higher food and beverage income.
For its Australian portfolio, earnings were impacted by the absence of contribution from Novotel Brisbane which was divested in October 2020. NPI from Australian properties fell 45.2% y-o-y to $1.2 million.
For CDLHT’s properties in Japan, the UK, Germany and Italy, demand remains impacted by ongoing restrictions in travel and various forms of lockdowns.
Claymore Connect, CDLHT’s only retail mall, recorded a 72.7% y-o-y reduction in NPI due to lower occupancy, which dropped to 79.4% from 87.1% the previous year, as well as the extension of rental reliefs and temporary rental assistance to tenants and impairment provisions.
SEE:Ascendas REIT reports dip in portfolio occupancy to 90.6% in 1Q21 business update
Looking ahead, CDLHT remains bearish on its near-term outlook given the gradual recovery expected for international travel. “International arrivals in 2021 are expected to be significantly lower than 2019 and CDLHT’s financial performance in the near term will continue to be adversely affected,” it says.
It expects business to continue being supported by domestic travel, government-related businesses, demand from guests affected by border closures or requiring isolation and essential international business travel.
For its Singapore properties, government bookings for self-isolation facilities at four of its six hotels are expected to continue into 2QFY2021. Domestic tourism campaigns are anticipated to support demand for staycations, while a pick-up in event-related bookings is also anticipated as larger MICE events resume.
While the outlook for the Australia and New Zealand markets looks brighter with the commencement of the Australia-New Zealand travel bubble, CLDHT states that the near-term outlook for Japan and Germany remains uncertain given the ongoing Covid situation.
As at 9.55am, units in CDLHT are trading flat at $1.27.
