Hotel Lotte Reports Operating Profit of 31.8 Billion KRW in First Half... Returns to Profitability

Hotel Sector Deficit Reduced... "Increase in Foreign Tourists"
Lotte Duty Free & Lotte World Turned Profitable in First Half
"Focus on Attracting Chinese Group Tourists in Second Half"

Hotel Lotte announced on the 14th that it recorded an operating profit of 31.8 billion KRW on a consolidated basis in the first half of this year, turning to a profit compared to the same period last year. During the same period, sales decreased by 25.7% to 2.2533 trillion KRW. Net profit increased by 365% to 230.8 billion KRW.

Sogong-dong Lotte Hotel. Photo by Lotte Group

Hotel Lotte is composed of the hotel division, world division, and duty-free division. While the duty-free and world divisions succeeded in turning to profit, the hotel division continued its deficit trend.

By segment, Lotte Hotel, the hotel division, recorded an operating loss of 14.8 billion KRW, but the deficit narrowed compared to last year. Sales increased by 26% from the first half of last year to 579.9 billion KRW. A Lotte Hotel official explained, “After the endemic phase, the influx of foreign tourists accelerated, and hosting state visits helped the performance,” adding, “With the continuation of the staycation trend in the first half, the performance of hotels in urban areas also greatly improved.” The world division recorded an operating profit of 5 billion KRW, turning to profit compared to last year. Sales improved by 36% to 169.2 billion KRW.

Lotte Duty Free, the duty-free division, recorded an operating profit of 41.6 billion KRW, continuing its profit trend following the first quarter. Sales decreased by 39% to 1.5042 trillion KRW. This sharp decline in sales was due to the normalization of the high commission fees previously paid to _ttaigong_ (itinerant traders). However, profitability improved by attracting multinational tourists from Southeast Asia, Japan, and other regions. Overseas business also showed a favorable trend. Operating profit in the second quarter maintained a profit trend following the first quarter, and sales in the first half increased by about 240% compared to the same period last year.

In the second half, Lotte Duty Free plans to focus on attracting customers locally in China following the approval of group tours to Korea. They will develop travel package products linked with travel agencies through promotional activities and expand downtown duty-free infrastructure to strengthen both online and offline promotions. Overseas business is expected to continue smoothly. Recently, the contract for the Guam Airport store was extended for three years, and the opening of the Singapore Changi Airport store is scheduled for the end of the year. With China allowing group tours to Japan, the Tokyo Ginza store and Osaka Kansai Airport store are also expected to accelerate their recovery.

A Lotte Duty Free official stated, “With the recovery of foreign group tourist demand and stabilization of overseas business in the second half, performance is expected to improve significantly,” adding, “We plan to carry out aggressive marketing activities to expand shopping infrastructure and attract domestic and international customers.”

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