SHKP Quarterly

Positive externalities expected in the 4th quarter Although the operating environment of the hotel industry will still be challenged by the volatile global economic and geopolitical environment, Hong Kong’s tourism industry has seen a gradual recovery, with the number of inbound travellers returning to about 80% of the average number between 2017 and 2019. A number of large-scale multinational exhibitions and business events, showcasing jewellery, beauty products and fresh produce, will be held in Hong Kong in the second half of the year , supporting the recovery of the hotel business. Thanks to the Hong Kong Tourism Board’s efforts in drawing over 30 large-scale conventions to be held in Hong Kong in the next few years, it is expected that over 300,000 business travellers will be attracted from around the world. The food and beverage, and banquet businesses are also key sources of hotel revenue. During the first half of the year, these businesses saw a recovery. The Group hotels remain focused on driving restaurant and banquet business and improving service excellence in the fourth quarter, as this is the traditional peak season for the hotel industry, driven mainly by the festive atmosphere. Multifaceted approach to hotel enhancement and talent acquisition To continuously provide visitors with a satisfactory, comfortable hospitality experience, the Group is dedicated to enhancing both the software and hardware of its hotels. Royal Park Hotel in Sha Tin recently completed comprehensive enhancement works. The Group refurbished the rooms, lobby and bar of Four Seasons Hotel Hong Kong, and enhancement works are planned for The Ritz-Carlton, Hong Kong and W Hong Kong . The Group expects these upgrades to help boost room rates, thus enhancing hotel profitability. Facing a manpower shortage, the Group employed a multi- faceted approach to sourcing talent. To relieve the workload of its staff, the Group introduced robots to handle check- in and check-out procedures, as well as food delivery in its restaurants. The Group’s hotels are also collaborating with local universities to recruit interns, such as the School of Hotel and Tourism Management and the College of Professional and Continuing Education of The Hong Kong Polytechnic University. After completing internships at the Group’s hotels, the students will have priority in being considered for positions in the hotels. The Group has also proactively sought government consultation on the possibility of importing labour to ensure that the hotels have sufficient manpower to provide quality service to visitors from around the world. Sustainability and Technology Continuing the Group's strategically implemented ESG and Technology initiatives throughout our entire hotel portfolio, the Group's hotels are committed to improving our ESG performance. ESG Initiatives: The Group completed energy audits in the Four Seasons Hotel Hong Kong , The Ritz-Carlton, Hong Kong, Hyatt Centric Victoria Harbour Hong Kong and The Royal Garden . These audits enable the Group to identify specific opportunities to increase efficiencies, reduce operating expenses and increase the value of the Group's assets. Following are a few measures that are planned for Q4 2023 and Q1 2024: • Sub metering” to better monitor and manage accurately the electricity use in different areas (F&B restaurants, rooms, public spaces). • Continued replacement of LED lights in both front of house and back of house areas (with sensors). In the first three quarters of 2023, across the Group's portfolio, these initiatives cumulatively saved about 400,000kWh per year. On food waste reduction, the Group rolled an AI-based food scanner that records all the food items that go to waste. This information is then used to improve menus and adjust cooking portions, resulting in less food waste and lower food costs. Technology Advances: The Group has deployed AI assistants in guestrooms to personalise our service, and better understand our customer needs. The Group will also undertake pilot projects in selected hotels in the coming year to further personalise our services. Introducing Go Royal by SHKP An integrated loyalty programme to build customer loyalty To provide customers with more comprehensive services, aligned with the consumption patterns of the new generation, last year, the Group’s hotels launched Go Royal by SHKP, the largest hotel and shopping loyalty programme in Hong Kong. As Go Royal by SHKP shared the same loyalty currency with The Point, which is an integrated customer loyalty programme for the Group’s major malls, members can redeem hotel dining and stays, as well as leisure and shopping privileges, with a user-friendly mobile app. This helps reinforce the synergy between the Group’s hotels and malls, optimizing value for both customers and the Group’s various businesses. Since its launch, Go Royal by SHKP has seen encouraging membership take-up of more than 100,000, attracting new customers for the hotels, whilst offering current loyal customers with an enriched shopping experience through loyalty programmes and points redemption. Royal Park Hotel is newly renovated and ready to welcome visitors from around the world with its refreshing look 剛完成全面翻新工程的帝都酒店，以煥然一新的姿態招待各地旅客 7