Mandarin Oriental International has attributed a 22% drop in underlying profitability in the first six months of 2006 to the ongoing renovation of its flagship Mandarin Oriental, Hong Kong.
EBITDA (earnings before interest, tax, depreciation and amortisation) dropped to US$48.9m (£25.8m) from US$62.7m (£33m) for the same period in 2005.
The company said that some of this loss was offset by improvements in other subsidiary hotels. The Excelsior, Hong Kong and the group's European properties benefited from rising average occupancy rates, the company claimed.
Mandarin Oriental, Hong Kong is scheduled to reopen in late September with 200 rooms and most of the public areas completed, while the full complement of 502 rooms is expected to come on line by the end of the year.
September will also see the addition of a new property to the group's European portfolio, with the opening of a 99-bedroom Mandarin Oriental in Prague.
Chairman Simon Keswick said: "While revenues in the second half will continue to be affected by the Hong Kong renovations, overall market conditions in Mandarin Oriental's key locations are expected to remain strong for the rest of the year."
By Matthew Batham