Commenting on the year-to-date results, HSH Managing Director and Chief Executive Officer Mr Clement K.M. Kwok said, "The first quarter results were generally in line with our expectations and reflected the soft market in Hong Kong , as well as the seasonal nature of the hotel industry. We have experienced a mixed start to our business in 2016, with results impacted by the renovations at The Peninsula Beijing and The Peninsula Chicago, and we will work hard to drive revenue and contain costs across our operations.

The Peninsula Hotels

While average room rates were stable with a decrease of 2%, The Peninsula Hong Kong reported a 7% decline in RevPAR as compared with the same period last year, reflecting the generally weaker business environment in Hong Kong .

We were pleased to see a 10% increase in RevPAR and a 12% increase in average room rates in other parts of Asia , mainly due to improved occupancy levels at The Peninsula Bangkok amidst a more stable political environment in Thailand . The Peninsula Tokyo implemented a rate growth strategy and reported strong average rates, enhanced by strong demand due to a weak Japanese Yen attracting increased overseas visitors to Japan . The Peninsula Beijing and The Peninsula Chicago were undergoing renovation projects and this impacted occupancy and RevPAR compared to the previous year.

Hotels in the United States and Europe reported a slight increase in occupancy and a 2% decrease in RevPAR. The Peninsula Beverly Hills performed strongly.

Commercial Properties

Residential Leasing: Occupancy at The Repulse Bay Complex increased, driven by robust occupancy in the unfurnished apartments. Shopping Arcades: The shopping arcades in The Peninsula Hotels, The Peak Tower and The Repulse Bay continue to be popular with premium brands for retail space. The Peak Tower and The Repulse Bay are almost fully occupied. The Shopping Arcades yield reduced by 7% year-on-year. We are working with our retail tenants to develop new marketing campaigns, including “Legendary Artisans” in The Peninsula Hong Kong, to help drive traffic to our arcades

Offices: Yield from the Group’s office leasing increased by 4% year-on-year, due to the increased occupancy and average rental rates in The Peninsula Office Tower and St. John’s Building, located in Hong Kong.

Outlook and Developments

We have experienced a mixed start to our business in 2016. For the remainder of the year, our operating results will be adversely affected by the partial closure of The Peninsula Beijing due to its major renovation, which will result in a significantly improved product in Beijing.

The outlook for the Hong Kong market in terms of tourism, high-end residential lettings and retail rental income is somewhat uncertain. While the trends have been weak, our business has been stable, mainly due to the steady returns of our property leasing business, with our residential apartments and commercial arcades holding up well.

We believe that the smaller, exclusive and high-end nature of the retail outlets at The Peninsula Hong Kong, as well as our luxury residential product at The Repulse Bay Complex, especially our recently fully renovated and enlarged apartments at the de Ricou tower, have been key to maintaining demand for those properties.

Elsewhere in Asia, we continue to see strong and increasing demand in Shanghai, Tokyo, and Bangkok continues to recover. In the US, the economic outlook is positive and our US operations are well-positioned to benefit from the projected growth in consumer spending. Growth in the US domestic and corporate market will be especially beneficial for The Peninsula Chicago with its full renovation completed in April 2016. The Peninsula Beverly Hills is experiencing strong demand following the opening of its fully renovated restaurant The Belvedere in January 2016.

In Paris, business has been affected by the terrorist attacks of 2015. However, we have been seeing some pickup since the beginning of 2016 although the first quarter of the year is in the winter low season and we are hopeful for a stronger recovery in the leisure market from spring onwards

We are pleased to have made good progress with our partners in the ongoing development of our three projects in London, Istanbul and Yangon. We remain confident that our long-term growth is underpinned by a strong balance sheet comprising valuable high quality assets coupled with a low level of gearing.”

About The Hongkong and Shanghai Hotels, Limited (HSH)

Incorporated in 1866 and listed on the Hong Kong Stock Exchange (00045), The Hongkong and Shanghai Hotels, Limited is the holding company of a Group which is engaged in the ownership, development, and management of prestigious hotels and commercial and residential properties in key locations in Asia, the United States and Europe, as well as the provision of tourism and leisure, club management and other services. The Peninsula Hotels portfolio comprises The Peninsula Hong Kong, The Peninsula Shanghai, The Peninsula Beijing, The Peninsula Tokyo, The Peninsula Bangkok, The Peninsula Manila, The Peninsula New York, The Peninsula Chicago, The Peninsula Beverly Hills, and The Peninsula Paris. Projects under development include The Peninsula London, The Peninsula Yangon and The Peninsula Istanbul. The property portfolio of the Group includes The Repulse Bay Complex, The Peak Tower and St. John’s Building in Hong Kong; The Landmark in Ho Chi Minh City, Vietnam; 1-5 Grosvenor Place in London, UK, and 21 avenue Kléber in Paris, France. The clubs and services portfolio of the Group includes The Peak Tram in Hong Kong; Thai Country Club in Bangkok, Thailand; Quail Lodge & Golf Club in Carmel, California; Peninsula Clubs and Consultancy Services, Peninsula Merchandising, and Tai Pan Laundry in Hong Kong.