【Peninsula Hotel Parent Company】Grand Hotel Recorded Profit of 320 Million Yuan Last Year, No Dividend Distribution CEO Wu Wei Cheng: Aim to Gradually Shift Toward Optimizing Operations and Creating Value

Peninsula Hotels parent company, The Peninsula Hotels (00045), announced that due to improved operational performance, it will record a full-year profit of HKD 320 million in 2025, compared to a loss of HKD 940 million in the same period in 2024. Basic earnings are HKD 105 million, versus a loss of HKD 180 million in 2024. The hotel does not pay dividends.

The company stated that the improvement in performance is driven by strong hotel operations, especially notable at the renovated New York Peninsula Hotel. Tokyo and London Peninsula Hotels also showed robust results.

Table of Contents

• Last year, Peninsula Hotels in Greater China maintained stable performance
• In Q4, average room rates in Greater China rose to HKD 4,524, Europe remains the strongest
• Peak Tram Sky Terrace visitor numbers saw significant growth
• CEO Hu Weicheng: Major investment cycle completed, considering shifting to a growth model with more “asset efficiency”
• Early this year, market demand in Greater China is expected to be uneven
• Three senior executives will resign from the board to support the company’s move toward a dual-layer management structure

Last Year, Peninsula Hotels in Greater China Maintained Stable Performance

Last year, revenue was HKD 7.98 billion, down 22% year-on-year. Excluding income from the sale of London Peninsula Residences, operating revenue was HKD 7.58 billion, up 11%. Hotel performance revenue was HKD 5.63 billion, up 13%.

During the period, the average room rate in Greater China was HKD 4,053, down 4.8% year-on-year, but average room revenue per available room (RevPAR) increased by 8% to HKD 2,644. Occupancy rate rose by 7 percentage points to 65%. The recovery in inbound tourism and expanded visa-free travel policies in mainland China helped maintain stable performance. Consumers in the region remain price-sensitive for luxury goods, but international long-haul travelers (especially from the Middle East and Russia) contributed to revenue growth. The three Peninsula hotels in the region achieved good results in both room and banquet business, though food and beverage performance lagged due to cautious consumer spending. In Hong Kong, the Peninsula Hotel faced ongoing weakness in F&B, partly due to increased competition from mainland China’s Greater Bay Area and local spending tightening. Despite softness in luxury retail, the group’s retail malls remained generally stable.

Excluding Greater China, the average room rate was HKD 4,053, a 4.8% decrease, but RevPAR increased by 18.9% to HKD 2,624, with occupancy rising to 66%. Japan’s inbound tourism demand was strong, boosted by cherry blossom season, international group tours, art installations, and driving experiences, leading Tokyo Peninsula Hotel to record historic high results. The hotel plans renovations in 2026, including upgrades to guest room technology, rooms, dining venues, and public areas.

In Europe, Peninsula Hotels’ average room rate was HKD 12,584, up 3.8%, with RevPAR at HKD 7,151, up 13.8%. Occupancy was 57%. In the US, average room rate was HKD 7,889, up 7.3%, RevPAR HKD 5,394, up 12.9%, with occupancy at 68%.

In Q4, Greater China Peninsula Hotels’ average room rate rose to HKD 4,524, Europe remains the strongest

In Q4 last year, the average room rate in Greater China was HKD 4,524, up 6.1% year-on-year and 22.4% quarter-on-quarter. RevPAR was HKD 3,428, up 16.7% year-on-year and 38.4% quarter-on-quarter. Occupancy was 76%, an increase of 7 percentage points year-on-year and 9 percentage points quarter-on-quarter.

In other parts of Asia (excluding Greater China), RevPAR averaged HKD 3,091, up 14.9% year-on-year; average room rate HKD 4,241, up 6.1%; occupancy 73%, up 6 percentage points.

In Europe and the US, the hotels’ seasonal RevPAR was HKD 7,135 and HKD 6,413, respectively, up 11% and 13.4% year-on-year. Average room rates were HKD 13,122 and HKD 8,880; occupancy rates were 54% and 72%.

Peak Tram Sky Terrace visitor numbers saw significant growth

In terms of commercial properties, revenue was HKD 1.32 billion, down 69% year-on-year. Excluding London Peninsula Residences sales income, revenue increased 5% to HKD 930 million. Revenue from The Peak Tram, retail, and other businesses was HKD 1.02 billion, up 6%.

The group noted active leasing at Repulse Bay’s The Repulse Bay, with improved occupancy and steady full-year results. The Peak Sky Terrace launched a new experience, with strong sales of Peak Tram ticket packages, and several high-end retail and dining tenants moved in, leading to a notable increase in visitor numbers.

Additionally, the group’s first standalone restaurant brand, Primo Posto, officially opened, marking an important milestone in expanding its dining business independently.

CEO Hu Weicheng: Major investment cycle completed, considering shifting to a growth model with more “asset efficiency”

CEO Hu Weicheng stated that 2025 is undoubtedly a key year for the company’s active transformation. The group’s major investment cycle has largely concluded, with the opening of London and Istanbul Peninsula Hotels, and operations gradually stabilizing. Management’s focus is shifting from project delivery and stability to optimizing operations and creating value.

With new leadership in place, the group has launched a comprehensive strategic review to ensure continued competitiveness and financial flexibility in a rapidly changing environment.

The group plans to focus on two main areas: first, enhancing performance by maximizing the value of existing assets, aiming to elevate operational standards to match top global luxury brands; second, driving business transformation for long-term growth and portfolio evolution. The group intends to gradually pursue growth by carefully selecting cities, resort hotels, and branded residences to enhance brand value and diversify revenue streams, while maintaining disciplined capital allocation.

Strengthening flagship properties remains central to the group’s strategy. The Hong Kong Peninsula Hotel will celebrate its 100th anniversary in 2028, with plans to upgrade its property assets.

The group is actively considering shifting toward a growth model with more “asset efficiency,” increasing partnerships, and reducing direct asset holdings. Collaborating with suitable partners can accelerate expansion, share risks, and maintain financial discipline, while retaining appropriate control to protect brand reputation.

The goal is to improve existing assets’ performance gradually, and through new developments and more effective capital use, significantly increase the group’s EBIT (earnings before interest, taxes, depreciation, and amortization) by 2035.

Early this year, market demand in Greater China is expected to be uneven

Looking ahead, management remains cautiously optimistic. Ongoing geopolitical tensions and a slower recovery in long-haul travel are expected to cause uneven market demand in Greater China in early 2026. The long-haul leisure travel market in Hong Kong is improving, with more events planned, which should benefit the region. However, competition from consumers in Shenzhen and other areas is expected to persist.

Hu Weicheng expects Tokyo Peninsula Hotel to continue performing best, supported by stable international demand, high-profile events, and strong brand promotion. The new flagship hotels in London and Istanbul will continue to enhance brand recognition, and European operations are expected to see fruitful development in 2026. The group remains optimistic about the London Peninsula Hotel’s prospects.

In the overall portfolio, the group will continue focusing on profit growth, emphasizing rent control, operational efficiency, and highlighting the unique positioning of each property. The 2026 investment plan includes upgrades to flagship properties, digital transformation, and sustainability initiatives. Overall, 2026 is expected to be a steady year of progress.

Three senior executives to resign from the board to support the company’s move toward a dual-layer management structure

Additionally, The Peninsula Hotels announced that Liao Yiqing, Keith James Robertson, and Ross Riese will resign from their executive director roles, effective after the upcoming Annual General Meeting on May 13. They will continue to serve as President of Corporate & Governance, CFO, and COO, respectively. These changes are purely governance and management restructuring to support the company’s transition to a dual-layer management system, where, apart from the CEO, the Board will be composed entirely of non-executive directors to enhance independence and oversight.

Pope Peren and Fung Kuo-lun will also step down as independent non-executive directors after the AGM. The company is currently seeking suitable replacements.