Brazil hotel influenced Belmond’s Q4, full-year results
Brazil hotel influenced Belmond’s Q4, full-year results
01 MARCH 2017 8:20 AM

Belmond executives said performance of its Belmond Copacabana Palace hotel in Brazil helped full-year numbers, but led to a “seasonally low” fourth quarter.

HAMILTON, Bermuda—Belmond’s Copacabana Palace in Rio de Janeiro, Brazil, had a heavy influence—both positive and negative—on the company’s fourth-quarter and full-year 2016 results, executives said on an earnings call Tuesday morning.

Belmond EVP and CFO Martin O’Grady told analysts on the call that the company expected revenue per available room would range between -5% and 1% in the fourth quarter of 2016, but RevPAR was down 7%, leading to a seasonally low quarter for the company. Occupancy decreased 4 percentage points for the fourth quarter and average daily rate was consistent with the fourth quarter of 2015, according to the company’s earnings release.

“Brazil dominated our results both on the upside and downside,” O’Grady said. “Belmond Copacabana Palace in Rio turned in a strong performance in the third quarter as it benefitted from the Olympic Games, but the hotel was negatively impacted in the second and fourth quarter by pre- and post-Olympics lull, and also by Brazil’s economic and political crisis.”

He added that the Belmond Copacabana Palace’s adjusted earnings before interest, taxes, depreciation and amortization was up $3 million over 2015 in a net basis for full-year 2016.

For the full year, same store RevPAR for owned hotels increased 3%. ADR also increased 3%, and occupancy was consistent with 2015.

As of press time, Belmond’s stocks were down 3%. The Baird/STR Hotel Stock Index was up 18.3% at the same time.

2017 guidance
Belmond is expecting 2017 to be another good year, but CEO Roeland Vos said the company is anticipating a weak first quarter. For full-year 2017, RevPAR is expected to range from 1% to 5% growth on a constant currency basis.

“Looking forward, we expect 2017 to be another year of growth,” Vos said. “… You will note that this guidance is negatively impacted by the comparison to the Olympic year in Brazil. The impact of the Belmond Copacabana Palace on its own is 4 percentage points to our own year-over-year growth. That means that if we took this hotel out of the equation for both year’s comparisons, our RevPAR guidance would be 5% to 9% growth. That is certainly solid.”

He added that many of the challenges the company is anticipating for 2017 are isolated to the first quarter, and that he expects economic and political turmoil and the effects of Hurricane Matthew on the Belmond Charleston Place in Charleston, South Carolina, will continue to affect performance in 2017.

“At a high level, for our first quarter of 2017, we’re seeing headwinds in Brazil, the Caribbean and for our trains and cruises,” he said.

Another Starwood hire
Belmond added a former Starwood Hotels & Resorts brand director to its team in the third quarter of 2016 and added another former Starwood employee this year. Robert Koren, who previously held operations and finance positions at Starwood, joined Belmond in February as VP of Southern Europe.

The company also recently hired Kenneth Hatton as SVP of global development, and Ariel Bouzas as VP of the project management office.

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