CO129-616-6 Hotels Ordinance- 1949 21-2-1949 - 21-2-1949 — Page 133

a)

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case showed a higher percentage of profits obtained from their rates as extant on the 31st day of July 1948 of more than 20% nett

profits (with full occupancy) per annum on capital, thus, to quote

an extract from one analysis :-

11

Return on Capital In view of the short term of the

"business, namely four years, it is maintained that a return on "capital should be at least 15% to 20%. The capital invested is " $140,000.00 and the adjusted profit as shown in Schedule I gives

11 a return of 19.97%. It is therefore maintained that this

"profit is not unreasonable for a business of this description

** and therefore there is no case to answer for a reduction in

"the room rentals now charged."

The average nett profit on capital for all hotels was 12/14% per annum, with some cases showing a nett profit on capital of 8% per

annum.

14.

After examination of accounts and inquiry by questionnaire,

Counsel for the Association was given by the Hotels Advisory

Committee a short ex parte hearing limited by the Committee to

three-quarters of an hour and the Hotels Residents Association was

given a similarly short ex parte hearing, neither being present

when the other was heard.

15.

Thereafter, the Hotels Advisory Committee visited a number

of Hotels and inspected various rooms and furnishings and on the

30th day of December 1948 the said Committee published a report

as per copy attached to Schedule "C" hereof.

16. It will be noted that the Committee in this report classified

hotels under 4 headings :-

(a) The first consisting of the four main European Hotels,

the first three of which are being run by the Hong Kong

& Shanghai Hotels Limited, one of Your Petitioners;

(b) The second as "Residential Hotels";

(c) The third as "Chinese Operated Foreign Type Hotels"; and

18.

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