[Asia Economy Reporter Kim Jonghwa] Ajou Hotel & Resort announced on the 21st that its performance improvement is expected due to proactive measures taken over the two years following the COVID-19 pandemic.
When COVID-19 spread last year, Ajou Hotel & Resort formed an exhibition TF team to respond organically to emergency situations in Korea and the United States.
Judging that long-term operational funding would be necessary, the company prepared for emergencies through immediate asset securitization and, despite real estate being a sector where short-term securitization can be difficult, swiftly sold one hotel without any losses.
They realized more than tenfold profits by selling part of the startup SparkPlus, which they invested in 2016, at an appropriate time, securing liquidity to overcome the crisis.
Amid unstable market conditions, they actively sought opportunities to purchase undervalued assets and laid the groundwork to expand their business portfolio.
Quickly reading the changing global paradigm, they established related departments and increased personnel to discover businesses in the tech field related to hospitality and real estate, as exemplified by the previous success of SparkPlus, striving to ensure business sustainability.
Moreover, despite the prolonged COVID-19 situation, they have continued normal operations without reducing staff. This contrasts with many global hotel chains that have taken drastic measures such as restructuring 20% of their workforce. During the peak of the pandemic, they temporarily closed hotel operations for about two months but actively utilized government employment retention subsidies, implemented paid leave, and executives voluntarily returned 30% of their salaries.
As the recovery from COVID-19 remains slow, Ajou Group’s hotel division is expected to post a slight operating loss next year, but earnings before interest, taxes, depreciation, and amortization (EBITDA) are projected to be positive.
Not focusing solely on domestic hotel investments, their investments in hotels across various regions in the United States have led to noticeable performance improvements in hotels in New York and LA, which are expected to serve as key levers for performance recovery.
Moon Yunhoe, CEO of Ajou Hotel & Resort, stated, "Ajou Hotel & Resort is a company that values talent, focusing on people’s safety and employment stability rather than workforce reduction during the COVID-19 crisis," adding, "We will continue to build a business portfolio to secure sustainability and future growth engines in our specialized fields of hospitality and real estate tech."
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