Revenue surge boosts hotel group

Dubai based Kingdom Hotel Investments saw profits grow 8 per cent in the first half of this year.

Kingdom Hotel Investments (KHI), the international hotel and resort property company based in Dubai, reported an eight per cent growth in net profit on a 53 per cent surge in revenues in the first half of the year. Sarmad Zok, the chief executive of KHI, said the positive results were mainly due to the company's purchase of five hotels in Asia. "KHI has delivered a strong financial performance in the first half as we continue to actively manage the group's portfolio in selective high-growth markets, especially in Asia," said Mr Zok. The economic slowdown hit the tourism industry hard, but KHI has managed to stay in the clear on the strength of its existing diversified portfolio in the Middle East, Asia and Africa. "Asia represented 43 per cent of reported hotel revenues compared to 21 per cent in 2007," said Mr Zok. "The positive aspect of investing in emerging markets is that their economy growth rates were still on the rise when the rest of the world was facing a downturn." One-time payments to develop and expand a number of projects drove net profits to US$20.6 million (Dh75.6m) compared to $19.1m in the same period last year. Revenues reached $115.5m from $75.4m. "The market has finally reached a point where people are becoming nervous about selling or buying property because of the global economic uncertainties," said Mr Zok. "We welcome that break and will take this time to work on developing our projects." The company has also set aside some of its planned expansions and upgrades, such as one planned for the Four Seasons hotel in Langkawi, Malaysia, due to escalating costs and a decline in market conditions. During the year KHI postponed the sale of a development in Phang Nga, Thailand, while in Da Nang, Vietnam the company halted the residential component of a project. But overall property sales, such as the Dubai Pearl development and the Raffles Residences in Manila, managed to keep KHI's revenues high. Prince Alwaleed bin Talal, the Saudi billionaire and member of the royal family, is the founder and chairman of KHI. The company has 34 hotels - 23 in operation and another 11 under development - in 21 countries. [e-mail]