SINGAPORE (March 2): Mandarin Oriental, a member of the Jardine Matheson Group, has declared FY16 earnings of US$55.2 million ($77.9 million), 38% down from its earnings of $89.3 million in the previous year on weak demand in a number of its key cities.

For the full year ended Dec 31, the group’s combined total revenue of hotels under management declined by 1% to US$1.3 billion.

Revenue per available room (RevPAR) across the group’s 29 hotels in US dollar terms fell by 3% on a like-for-like basis, which the group attributes to challenging conditions in many of its destinations in 2016.

Asia RevPAR was down 1% on a like-for-like basis with particularly softer demand in Hong Kong and Jakarta – while weaker demand in London and Paris put pressure on occupancy and rates city-wide such that the group’s overall RevPAR for Europe fell 15% in terms of like-for-like sales.

In the Americas, positive trading conditions, especially at the group’s associate and manage hotels, saw RevPAR increase 3% on a like-for-like basis on the group’s flagship New York Hotel’s improvement in its competitive position.

Mandarin Oriental says it experienced softer demand in many of its key markets throughout the year, particularly Hong Kong, London and Paris. Its London property, Mandarin Oriental Hyde Park, was impacted further by the start in September of its phased renovation programme, which is expected to complete in the second quarter of 2018.

The group was able to benefit from a positive trading environment in Tokyo; a return to normal operations in Munich following a public area renovation; as well as a contribution from its newly-acquired equity interest in Mandarin Oriental, Boston.

Contributions from these factors were however partly offset by weaker performances in Washington DC and Jakarta.

Mandarin Oriental group CEO James Riley expects challenging conditions to continue impacting the group’s performance in a number of key markets this year, while earnings will be disrupted by the renovation of its London party.

Nevertheless, Riley expects results to benefit from the “increasing demand of high net worth individuals from both traditional and emerging markets” travelling to the group’s key destinations, in addition to enhanced contributions from its renovated flagship properties and from new hotel openings.

Shares of Mandarin Oriental closed 0.4% lower at US$1.28.