Mandarin Oriental

• Underlying profit increased to US$81 million, from US$8 million in 2022
• Strong operating and financial performance driven by record rates
• Management fees grew by 30%, with strong recovery by hotels in Asia
• Increased development pipeline with two new hotel openings and eight new management contracts announced
• Final dividend at US¢3.50 per share, resulting in total dividend of US¢5.00 per share

In 2023, Mandarin Oriental’s performance benefitted from consumers’ robust appetite for luxury leisure travel. The group continued to provide the exceptional levels of service for which the brand is legendary and secured record room rates. The business also continued to build occupancy, which translated into substantial improvements in Revenue Per Available Room (‘RevPAR’) across almost all hotels.

Underlying profit increased to US$81 million, from US$8 million in 2022, with underlying earnings per share at US¢6.41, compared with US¢0.60 in 2022. Non-trading losses of US$446 million primarily comprised a non-cash decrease in the valuation of the Causeway Bay site under development, resulting in a loss attributable to shareholders of US$365 million.

Net debt fell to US$225 million at the end of 2023, from US$376 million at the end of 2022. This reflected significantly higher operating cashflow from the business, net of ongoing capital investment, as well as proceeds from disposals. Gearing as a percentage of adjusted shareholders’ funds was 5%, compared to 8% at the end of 2022.

In 2023, the management business delivered strong operating performance, with a 30% increase in hotel management fees and a 55% improvement in EBITDA. Combined Total Revenue for hotels under management was US$1.9 billion in 2023, 21% above 2022. This increase was driven primarily by a 29% increase in RevPAR, primarily due to a gradual recovery of occupancy across all geographies, a continuation of high rates in Europe, Middle East and Africa, and a solid rebound in rates in Asia. Food & Beverage (‘F&B’) revenue increased by 18% year-on-year.

Mandarin Oriental’s 13 owned properties reported a combined EBITDA 63% higher than 2022, and most properties maintained or improved their earnings. There were materially improved contributions by Hong Kong and Tokyo, both of which were severely impacted by stringent travel restrictions in 2022. London and Geneva also delivered considerably improved results, driven by better RevPAR and F&B performance. There were lower earnings in 2023 from Singapore, due to its closure for renovation and repositioning, and Miami.

In 2023, the group opened two new hotels and completed one rebranding, expanding its portfolio to a total of 38 hotels and nine residences. Eight new hotel and residences projects were announced during the year. These projects will strengthen Mandarin Oriental’s brand presence in a broader range of destinations and enrich its customer proposition in existing locations. At the end of 2023, the group’s development pipeline had a total of 28 hotels and two standalone residences expected to open over the next five years, with four of these expected in 2024.

As part of Mandarin Oriental’s regular review of its asset portfolio, the property in Jakarta was sold to Astra in June 2023, while retaining the management contract. The group has also announced the sale of the Paris hotel, while retaining a long-term hotel agreement. The Causeway Bay site in Hong Kong, which is being redeveloped as a mixed-use office and retail complex, remains on track to complete in the first half of 2025.