Hotel Lotte Reports Operating Loss of 27.3 Billion KRW in 1Q, Returns to Deficit

Impact of Weakness in Duty-Free and World Divisions

Hotel Lotte turned to a loss in the first quarter of this year due to sluggish performance in the duty-free and World divisions.

According to Hotel Lotte on the 17th, the company announced yesterday that its consolidated operating loss for the first quarter was 27.3 billion KRW, turning to a loss compared to the same period last year. First-quarter sales increased by 7.1% to 1.1815 trillion KRW.

By business segment, the hotel division's first-quarter sales rose 4.6% to 276.5 billion KRW. Operating loss narrowed to 14.7 billion KRW. The company stated that the hotel division's performance is gradually improving, supported by the recovery in tourism, with 3.4 million foreign tourists visiting Korea in the first quarter.

Sales in the duty-free division increased 8.7% to 819.6 billion KRW. However, operating loss in this division turned to a loss of 28 billion KRW compared to the same period last year. It is reported that the duty-free operating loss turned negative due to factors such as the prolonged slowdown in China's domestic economy, the recovery speed of Chinese tourists not reaching pre-pandemic levels, and rising product costs caused by a high exchange rate.

The World division recorded sales of 85.4 billion KRW and operating profit of 15.3 billion KRW in the first quarter. Sales increased by 0.5%, but operating profit decreased by 10.6%. A Lotte World official explained, "The winter peak season performance fell short of expectations due to bad weather, an increase in overseas travelers, and intensified external competition," adding, "We plan to increase visitor numbers through the introduction of new content and various promotions."