Tantan-dae-ro Lee Boo-jin "Will Continue Sustainable Growth"

Successful Overseas Expansion Strategy After Inauguration
Opened 5 Trillion Won Sales Era Last Year
Reappointed as Inside Director at Shareholders' Meeting
"Will Continue Sustainable Growth"

On the 19th, Lee Boo-jin, President of Hotel Shilla, who attended as the chairperson at the 47th regular shareholders' meeting held at Samsung Electronics Jangchung Building in Jung-gu, Seoul, stated, "We will continue sustainable growth." (Photo by Hotel Shilla)

[Asia Economy Reporter Seungjin Lee] Amid the worst crisis faced by the hotel industry due to the impact of the novel coronavirus infection (COVID-19), Lee Boo-jin, CEO of Hotel Shilla, emphasized on the 19th, "We will strengthen our competitiveness to actively respond to internal and external changes and discover new business opportunities to continue sustainable growth."

At the 47th regular shareholders' meeting held at Samsung Electronics Jangchung Building in Jung-gu, Seoul, Lee said, "Since the beginning of the year, we have been facing challenges for survival due to great uncertainty." She then presented strategies for sustainable growth, including strengthening digital capabilities, maximizing customer experience, and securing international competitiveness.

Since the COVID-19 outbreak, with the ban on Korean entries and the full-scale implementation of social distancing, major domestic hotels including Hotel Shilla have been in a state of temporary closure. They have introduced not only temporary shutdowns but also paid leave. As a result, some analysts say that CEO Lee, who took office in 2010, is now facing a true test.

Lee has served as the chairman of the shareholders' meeting for nine consecutive years. At this meeting, Hotel Shilla approved three agenda items: the 47th financial statements, the reappointment of Lee as an inside director, and the limit on directors' remuneration.

Since Lee's appointment in 2010, Hotel Shilla has been regarded as having taken a solid path. In particular, Shilla Duty Free has shone with its overseas expansion strategy, operating offline duty-free stores at a total of five locations including Changi International Airport, Macau International Airport, downtown Tokyo in Japan, and downtown Phuket in Thailand.

Last year, Hotel Shilla achieved the era of 5 trillion won in annual sales amid favorable domestic and overseas duty-free business. Hotel Shilla recorded sales of 5.7173 trillion won and operating profit of 295.9 billion won last year. These figures represent increases of 21.3% and 41.5%, respectively, compared to 2018.

Accordingly, Hotel Shilla presented a strategy to improve profitability by stabilizing overseas business in the duty-free sector and strengthening product competitiveness and operational efficiency in the hotel sector, but the situation is blocked by the adverse factor of COVID-19.

Since COVID-19, Hotel Shilla's room occupancy rate has dropped to 20-30%. Also, the Shilla Duty Free store operating at Gimpo International Airport's international terminal will suspend operations for one week from the 21st to the 28th. Hotel Shilla plans to decide on resuming operations by monitoring flight schedules and passenger situations once the summer schedule starting next month is released.

The outlook for the hotel and duty-free industries overall is bleak due to COVID-19. Jongdae Park, a researcher at Hana Financial Investment, said, "If the COVID-19 outbreak had been a localized issue in China and Korea, the recovery period for duty-free store performance would likely have been around May, but as it has become a global problem, the calculation has become complicated." He added, "Although the decline in performance can be reduced faster than expected, the timing of turning to sales growth may be delayed." He further diagnosed, "Sales of duty-free companies such as Hotel Shilla and Shinsegae in February and March are estimated to have decreased by 40% compared to the same period last year."

This content was produced with the assistance of AI translation services.