Luxury hospitality group Mandarin Oriental has reported an upbeat set of results for the first half of 2010 as confidence returns to the corporate travel market.
Mandarin Oriental London, which will house Heston Blumenthal’s new restaurant Diner from December this year, was just one of many regions that enjoyed a resurgent six months to 30 June, with Asia leading the improving pack.
Earnings before interest, tax, depreciation and amortization for the first six months of 2010 were US$58 million compared to US$35 million in the first half of 2009.
The group’s underlying profit for the period was US$13 million, up from US$1 million in the same period in 2009.
Simon Keswick, chairman, said: “While a full recovery is dependent on global economic conditions, the group’s performance is expected to improve as rates and occupancies continue to move towards pre-crisis levels.”
The group’s two wholly-owned Hong Kong hotels benefited from increased demand particularly from the corporate sector. At the Mandarin Oriental, Hong Kong, RevPAR increased by 46 percent, whilst the Excelsior, Hong Kong also achieved stronger occupancy, at 84 percent, and produced an increase in RevPAR of 30 percent.
Mandarin Oriental, Tokyo, which operates under a long-term lease, attracted higher occupancy despite new competitive supply in the market. The Manila hotel saw an increase in its corporate travel segment, while the Mandarin Oriental, Jakarta achieved a significantly higher average rate following its re-opening at the end of 2009 after renovation.
In Europe, the performance of the group’s London hotel remained resilient in a market which was less affected in 2009 by the weaker global economy.
Both the Munich and Geneva hotels recorded higher RevPAR as a result of strengthening demand. In the USA, the first-half performance at its Washington D.C. hotel fell in comparison with the same period in 2009, which had benefited from activities surrounding the Presidential Inauguration.
The share of results of associates and joint ventures rose due to stronger market conditions in Singapore, Kuala Lumpur, New York and Miami. Bangkok started the year well, but was impacted by political protests from March onwards.
Mandarin Oriental currently operates 26 hotels and has a further 16 under development. Together these represent 17 hotels in Asia, 13 hotels in the Americas and 12 hotels in Europe, Middle East and North Africa. In addition the group operates, or has under development, 14 Residences at Mandarin Oriental connected to the group’s properties.
The company said that while some of the current 16 development projects continue to face delays, the group is reviewing an increasing number of opportunities in key city centre and resort destinations around the world.