Mandarin Oriental

Mandarin Oriental saw a significant improvement in its performance in 2021, as restrictions on travel were gradually relaxed in most countries. Performance varied by region, however, as demand remained heavily influenced by the extent and pace with which these restrictions were lessened.

The group delivered a total underlying loss of US$68 million, US$138 million lower than 2020. Results remain materially behind pre-COVID-19 levels.

Combined total revenue of hotels under management increased by 78% in 2021 compared with the prior year. In Europe and the United States, a relaxation of travel restrictions in the second half of the year allowed business levels to improve. In East Asia, by contrast, restraints on international travel remained in place throughout the year, limiting most hotels to domestic demand.

Results for most of the group’s owned hotels improved, driven by both better trading conditions and government support in some countries. In Europe, results were notably better in Munich, London, Geneva and Paris, while Boston and New York performed best of the properties in the Americas. There was also a strong performance by the Hong Kong hotel.

The earnings before interest, tax, depreciation and amortisation (‘EBITDA’) from the group’s property interests in 2021 were US$24 million, compared with a loss of US$62 million in 2020. Due to associated depreciation costs, these same properties in aggregate reported an underlying loss of US$71 million in 2021, compared with a loss of US$174 million in the prior year.

Performance of the management business improved substantially, producing EBITDA of US$17 million compared with a loss of US$12 million in 2020. Particularly strong management fees were earned in resort destinations such as Bodrum and Dubai. There was an underlying profit of US$5 million in 2021, compared with a loss of US$30 million in the prior year.

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 group’s total number of hotels under operation has increased to 36, following the opening of its latest property in Shenzhen in January 2022. In 2021, the group took over the management of the Al Faisaliah Hotel in Riyadh and opened a new hotel on the Bosphorus in Istanbul, both under management contracts. The group also reopened the Mandarin Oriental Ritz, Madrid, in which it owns a 50% interest, after an extensive programme of restoration and refurbishment.

The group’s development pipeline remains robust, with 24 projects expected to open in the next five years. Three new management contracts were announced in 2021, and two new developments have been announced since the start of 2022. Two hotels and three standalone residences projects are scheduled for opening in 2022, while the group also expects to rebrand two properties in the Middle East.

In Hong Kong, the Causeway Bay site under development remains on track to complete in 2025.