Headwinds in the hospitality industry in Singapore and the Maldives sent City Developments Limited (CDL) Hospitality Trusts' results sliding in the first quarter.
While gross revenue rose 5.8 per cent to $44.7 million, net property income fell by 2.3 per cent to $33.7 million for January-March compared with the year earlier.
Income available for distribution fell 8.5 per cent to $21.9 million, while income available for distribution per stapled security (DPS) was down 9.0 per cent to 2.22 cents.
"The weak global economy has given rise to a challenging operating environment," said Mr Vincent Yeo, chief executive of the trust's managers. "Corporate expenditure remains constrained."
The trust owns six hotels in Singapore, including Grand Copthorne Waterfront, M Hotel, Orchard and Novotel Singapore Clarke Quay. The hotels' average occupancy rate for the first quarter was 83.9 per cent, a fall of 3.8 percentage points from the same period last year. Room revenue fell 6.9 per cent to $161.
Although this year will see more events than 2015, the company said the hospitality sector here remains uncertain, citing the Singapore Tourism Board's modest forecast for visitor arrivals to rise by 3 per cent this year.
AT A GLANCE
$44.7 million (+5.8%)
NET PROPERTY INCOME: $33.7 million (-2.3%)
INCOME AVAILABLE FOR DISTRIBUTION PER STAPLED SECURITY: 2.22 cents per share (-9.0%)
The increase in room supply will grow faster than visitor growth numbers, it said, estimating that there will be 3,930 rooms this year. This will cause room rates to remain competitive.
It expects better growth in Singapore after renovation works at the Grand Copthorne Waterfront Hotel and M Hotel are completed this year. These will increase meeting room capacity and significantly augment its food and beverage offerings at the Grand Copthorne.
In the Maldives, where it owns two resorts, the company recorded the biggest decline in net property income, falling by 9.8 per cent compared with the same 2015 period.
The group attributed this to the strength of the United States dollar against the currencies of the countries where most of its guests come from. Chinese visitors, who form the biggest group of tourist arrivals for the Maldives, fell by 10.8 per cent in the first quarter.
The group's results were mitigated by its newly acquired hotel in Britain, the Hilton Cambridge City Centre, which had a 7.3 per cent rise in revenue per available room.