Luxury hotel group Mandarin Oriental International saw profit for 2008 tumble, as corporate travellers reigned in spending in the latter part of the years due to the global recession.
Although the group reported an increase in turnover of $500,000 for the year ending 31st December 2008, its pre-tax profit slumped to $84.5m compared with $130.2m a year ago.
Mandarin Oriental said a fall in demand from September onwards from the corporate segment, in particular the financial services market, was the principal reason for the fall.
Despite this, the group's directly owned Hong Kong hotels maintained their profitability and the leisure market held up well.
European performance was adversely affected by currency movements and an eight-month renovation project at its Geneva property.
Simon Keswick, chairman of the group, warned business would continue to be challenging, with further decreases in occupancy expected at most of its hotels.
Keswick said: "Nonetheless, Mandarin Oriental's financial position is strong and the long term outlook remains positive due to the strength of the brand and the limited supply of luxury hotels in the group's key markets."
The group is set to launch three hotels in 2009, in Marrakech, Barcelona and Las Vegas, which will operate under long-term management contracts.
Mandarin's new Beijing hotel has been postponed after a fire at the construction site in February.
The group currently operates 23 hotels, with a further 18 under development.
By Gemma Sharkey
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