Huatian Hotel Group recorded RMB263 million (approx: US$42 million) operational revenue and RMB48.7938 million (approx: US$7.9 million) net profit, down 39.51% and 28.03% y-o-y respectively, according to its Q1 2015 fiscal report.
Revenue and earnings plunged amid last year’s government drives to curb official spending with well-established luxury hotel brands especially affected. For 2014, Huatian Hotel reported RMB1.514 billion (approx: US$245 million) operational revenue and RMB98.8415 million (approx: US$16 million) net profit, down 14.97% and 184.62% y-o-y respectively.
One observer said the government’s move to curb “three types of public expenses” dealt a serious blow to high-end hotels. The budget cuts for official conferences led to a 30-40% drop in revenue from conferences and dining, affecting the financial results of the entire hotel industry.
Huatian Hotels said it would launch the Huatian Select Hotels brand within its luxury brand to increase profits by entering the mid-range hotel market and business hotel market to appeal to a broader customer base. It will make guest rooms the key revenue focus.(Translation by David)
