Mandarin Oriental expects to post an underlying loss for the first half of 2022, as trading conditions remain difficult, particularly in East Asia, Ben Keswick, chairman of the hospitality company, said in a filing to SGX Thursday.
“The outlook for the full year is dependent on the level of travel restrictions implemented by governments,” Keswick said in the statement.
Mandarin Oriental said its main focus is now rebuilding revenue and business activity levels, noting its total number of hotels has risen to 36 after its latest property in Shenzhen opened in January of this year.
The group has a development pipeline of 24 projects due to open in the next five years, the filing said.
2021 net loss
For 2021, Mandarin Oriental reported an underlying net loss, excluding non-trading items, of US$68.1 million, narrowing from 2020’s underlying net loss of US$205.9 million. Revenue for the 12 months ended 31 December grew to US$316.9 million, up from US$183.7 million in 2020, the filing said.
The combined total revenue of hotels under management, including associates, joint ventures and managed hotels, came in at US$1.05 billion for 2021, up 78 percent on-year, but still well below 2019’s US$1.33 billion, the company said.
Keswick noted 2021 was a challenging year due to the Covid-19 pandemic.
“However, performance improved in the second half as barriers to travel were gradually reduced in most parts of the world. This, together with government and other pandemic-related support enabled the Group to significantly reduce underlying losses,” he said.
“Results were boosted by Covid-19-related receipts that included government support, primarily in Europe, rent concessions in Tokyo, and business interruption insurance proceeds for hotels in the United States,” the company said. “In East Asia, restraints on international travel remained in place throughout the year, limiting most hotels to domestic demand.”
Results were “materially below pre-pandemic levels,” the company said.