Hotel Lotte Reports Operating Profit of 35.7 Billion KRW in Q1, Returns to Profitability

Sales decreased by 25% to 1.1034 trillion KRW
Hotel and World Business recover to pre-COVID levels
Duty-free sales increase... Profitability improves

Hotel Lotte announced on the 15th that its consolidated operating profit for the first quarter of this year turned positive to 35.7 billion KRW compared to the same period last year. During the same period, sales decreased by 25% to 1.1034 trillion KRW. Hotel Lotte is composed of the Hotel Business Division, World Business Division, and Duty-Free Business Division.

Signiel Seoul exterior view. [Photo by Hotel Lotte HQ]

Hotel Lotte analyzed that the Hotel Business Division succeeded in improving performance due to an increase in foreign tourists following the COVID-19 endemic phase and the resumption of large-scale events such as state visits. Regarding the World Business Division, it was evaluated that the division achieved its highest operating profit in the first quarter due to the effects of pent-up consumption after the endemic and the recovery trend of inbound tourists.

Lotte Hotel Group HQ stated the outlook, "With the COVID-19 endemic, we expect demand recovery due to previously suppressed overseas travel demand and the resumption of large-scale events," adding, "We anticipate significant synergy effects from the integration of the Hotel Business Division with the Resort Business Division."

Lotte Duty Free recorded an operating profit of 35.8 billion KRW in the first quarter, turning positive. Sales decreased by 39.5% to 754.2 billion KRW. Although sales declined during the normalization process of the commission fees paid to commercial customers, profitability improved as efforts were made to attract multinational tourists from Southeast Asia and Japan, and sales from domestic customers increased. The reversal of the bonded sales license fee reduction amount reflected in last year's business report also had a positive impact.

The overseas business also maintained a relatively good performance trend. First-quarter sales at overseas branches increased about fivefold compared to last year, and operating profit maintained a positive trend. With the opening of a new store at Melbourne Airport in Australia next month and continuous development of new overseas businesses, its share is expected to grow further. Currently, overseas business sales account for about 10% of total sales at Lotte Duty Free.

Lotte Duty Free plans to accelerate performance normalization by reducing fixed costs such as rent at Incheon International Airport store in the second half of the year, expanding downtown duty-free infrastructure, and strengthening online and offline promotions in line with the increasing trend of international passengers in the endemic era.

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