City Development's hotels hit by 35% profit crash

Find out what hurt it badly.

According to CIMB, most hotel players reported yoy declines in RevPAR, with CityDev the worst hit with a 35% yoy decline in hotel PBIT. Geopolitical tensions in Korea and economic weakness in Europe were the main causes for its overseas hotels while the fall in corporate travellers and increasing room supply affected its Singapore hotels (CDLHT’s RevPAR down 8% down yoy). 

Here's more:

The initial signs are that overall sector RevPARs could be flat or down yoy in FY13.

Residential development margins continue to shrink as the twin effects of competitive pricing and high land costs begin to show in the financials. The mass market remains in the hot zone.

Most developers are taking advantage of this window to expedite launches in this sector. But upside to pricing at current levels remains challenging. Volumes for high-end projects remain weak.