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Hospitality group Millenium and Copthorne has seen its profits fall 28% in 2018 and said Brexit uncertainty has led to recruitment issues at its London hotels.
In its full-year results Millennium and Copthorne’s profits fell from £147m to £106m attributed to the US-China trade war, Airbnb and minimum wage levels.
In constant currency, hotel revenue for 2018 increased slightly by 0.6%, while reported hotel revenue was down by £13m or 1.5%, reflecting the stronger pound. Additionally revenue per available room fell to £81.57 from £82.78 in 2017.
The company added concerns about Brexit have affected its UK hotels especially in London, where the hotels started to face “difficulties” in recruiting EU workers which currently comprise more than half of the London workforce.
Chairman Kwek Leng Beng said: “The hospitality industry faced a range of geo-political and global economic headwinds in 2018, many of which look set to continue in the current year, including US/China trade relations, Brexit and increasing minimum wage levels in many jurisdictions.
“The board’s priority is to evaluate and develop new and innovative strategic plans to meet the challenges facing our fast-changing operating environment. The shortage of talent from rank and file to senior management is intensifying with many new hotels being built around the world, not to mention the growth of Airbnb and serviced apartments.
“Any hospitality business that wants to progress will need to evolve and embrace these changes to stay relevant and profitable in the immediate and medium term. Restoring profitability in our New York hotels also remains at the top of the board’s objectives.”
He added: “Meanwhile, we continue to invest in and reposition our hotels. We look forward to our Mayfair hotel being rebranded and opened as The Biltmore, Mayfair in the second quarter of this year. This is the first opening under Hilton’s new LXR Hotels & Resorts collection in Europe. This also will mark the group’s debut in the London five-star deluxe market and it is our aim to fast track our lost earnings growth at this hotel after it re-opens.”
