Hotel Lotte reported a sharp 64% decline in operating profit for the third quarter of this year, dropping to 24.2 billion won (about $17.3 million), compared to the same period last year. However, the company saw an 8% increase in revenue, which reached 1.2844 trillion won ($917.6 million).
By segment, the hotel division experienced a 13% drop in operating profit for the quarter, totaling 38.6 billion won ($27.6 million). Despite this, revenue from its luxury hotels, including Lotte Hoitel Seoul, grew, driven by higher business and state guest bookings. L7 Hotels also delivered a strong performance.
In contrast, the duty-free business faced significant losses, posting an operating deficit of 46 billion won ($32.9 million) for the quarter, a sharp deterioration from the 9.8 billion won ($7 million) loss recorded during the same period last year. The ongoing economic downturn, reduced consumer spending, and delayed return of Chinese group tourists contributed to the downturn. Additionally, a one-time expense of 16 billion won ($11.4 million) related to a voluntary early retirement program in August was reflected in the results.
In response to these challenges, Lotte Hotel Duty Free declared a state of emergency management in June, implementing cost-cutting measures such as downsizing its workforce, reducing executive salaries, trimming business expenses, cutting store sizes at its World Tower location, and offering the early retirement program.
Lotte Hotel World division also saw a 3% decline in operating profit for the third quarter, totaling 31.5 billion won ($22.51 million) compared to the same period last year.
