Mandarin Oriental posts lower Q3 2024 profits due to lower branding fees

The group reported higher Revenue per Available Room year-on-year.

Hospitality and management group Mandarin Oriental reported that the group’s Q3 2024 profit was ‘slightly below than the prior year’.

The group attributed this to lower branding fees this quarter compared to 2023.

In Q3, Revenue per Available Room (RevPAR) increased year on year across all regions. In Asia, both rates and occupancy were fuelled by strong intra-regional demand, with Tokyo and South East Asia performing well.

In Europe, the Middle East and Africa, almost all hotels were able to deliver solid improvements in RevPAR supported by both rate and occupancy. In America, with rates flat, our hotels delivered RevPAR growth through increases in occupancy.

With higher RevPARs in the period, the Management Business generated stronger hotel management fee income and improved profitability, excluding Residences branding fees. Owned Hotels, particularly Singapore, Munich, and Madrid, recorded solid improvements in earnings from last year, partially offset by the absence of earnings from Paris as a result of the disposal of that hotel.

Moreover, consolidated net debt significantly decreased from $301.95m (US$225m) as at 31 December 2023 to $34.89m (US$26m) as at 30 September 2024, mainly due to the receipt of sale proceeds from Paris hotel and retail properties, partially offset by investment in One Causeway Bay – the Group’s mixed-use commercial redevelopment in Hong Kong. The Group’s liquidity position remains robust, with over $939.4m US$700m in available committed debt facilities and cash reserves.

Gearing was 1% of adjusted shareholders’ funds, reduced from 5% at the end of last year.

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