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CDLHT third-quarter revenue drops 38.7% to S$30.1m

CDL Hospitality Trusts' (CDLHT) total revenue from master leases and managed hotels across all its markets decreased 38.7 per cent year on year to S$30.1 million for the third quarter ended Sept 30.

Net property income (NPI) also tumbled, shrinking 57.4 per cent to S$15.2 million from the year-ago period, the stapled hospitality group's managers said in an operational update on Friday.

This came as most of CDLHT's properties, with the exception of a New Zealand hotel and the five Singapore hotels, were operating at low occupancies or had just reopened in the July-September period.

While there was inorganic NPI contribution from W Hotel - acquired in July - during the quarter, this was more than offset by the absence in contribution from Novotel Singapore Clarke Quay, which ceased operations after being divested as part of a wider redevelopment plan.

Still, compared with the second quarter, CDLHT saw a rebound in performance. Gross revenue rose 58.2 per cent while NPI grew 49.4 per cent on a quarter-on-quarter basis, in the three months to September.

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This was thanks to the easing of restrictions that were put in place to curb the spread of the coronavirus. All of CDLHT's hotels except Raffles Maldives Meradhoo that were closed from March have since reopened in July and August.

Despite the absence of rental income from Novotel Singapore Clarke Quay, NPI of the Singapore portfolio was 23.2 per cent higher than the second quarter, partially due to the resumption of the staycation business.

The group's five hotels in Singapore achieved an average occupancy rate of 92.4 per cent in the latest quarter, up 1.6 percentage points from 90.8 per cent in the year-ago period.

The high occupancy was sustained by continued demand for dedicated isolation facilities and from foreign workers affected by border closures.

However, the average daily rate at the Singapore hotels in the July-September period fell 61.5 per cent on the year to S$70.

Their revenue per available room thus dropped 60.9 per cent compared to the same period last year.

Overall income contribution from the Singapore portfolio was also lower than a year ago due to major events, wedding banquets and social functions being postponed or cancelled.

"Demand for accommodation facilities used for isolation purposes continues to support occupancy for most of the Singapore hotels into Q4," the managers said.

However, as isolation demand tapers off due to fewer Covid-19 cases, occupancies will then be propped up by staycations, project groups, travel bubbles and reciprocal green-lane travel arrangements.

The managers added that across CDLHT's markets, business levels at most of its city hotels are expected to be supported by domestic travel, government-related businesses, demand from guests affected by border closures or requiring isolation, and essential international business travel.

CDLHT stapled securities were trading at S$0.98 as at 9.44am on Friday, down S$0.01 or 1 per cent.

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