Mandarin Oriental sees revenue, profit slump
SINGAPORE – Mandarin Oriental International says demand for its hotels was adversely affected in 2009 by poor economic conditions that led to material reductions in both occupancy levels and room rates.
The group responded by focusing on maintaining its competitive position in each of its markets and by reducing costs.
This enabled Mandarin Oriental to achieve an underlying profit for the year despite revenues being significantly lower than in 2008.
The group also benefited from a gain on the sale of its Macau hotel interest, said chairman Simon Keswick.
The group’s underlying profit for the year was US$12 million, compared with US$67 million in 2008
Properties in Asia and the Americas were the most adversely affected, including the group’s two wholly owned hotels in Hong Kong.
At Mandarin Oriental, Hong Kong, revenue per available room fell by 30 percent, while at The Excelsior it decreased by 27 percent.
Conversely, at the group’s wholly owned flagship hotel in London, RevPAR was down by only five percent in local currency terms, although its contribution to earnings was reduced further due to the weaker pound.
Three new hotels were opened in 2009, in Sanya, Barcelona and Las Vegas, bringing the total number of hotels in operation to 25. The Group’s hotel in Jakarta re-opened in October following extensive renovations.
In 2010, it is anticipated that a further two properties will open, in Macau and Marrakech. Both properties will be operated under long-term management contracts.
A number of development projects are facing delays, and one previously announced project in Chicago will not proceed.
A new 195-room hotel and residences project to be built in Abu Dhabi has been announced recently, bringing the total number of hotels under development to 16.
Ian Jarrett
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