Mandarin Oriental Hotel Group

• 42 hotels • over 10,000 rooms • present in 27 countries• 18 hotels in Asia• 12 hotels in The Americas

• 12 hotels in Europe, Middle East and North Africa. • 13 Residences connected to its properties• equity interests in a number of its properties and

net assets of approximately USD 2.3 billion as at 31st December 2010. 

History

In 1963 ,The Mandarin was opened in Hong Kong

In 1974 it expanded through the acquisition of a 49 percent interest in The Oriental, Bangkok

In 1985, the Company rationalized its corporate structure by combining the two prestigious properties under a common name, Mandarin Oriental Hotel Group.

Mandarin Oriental’s objectives

Being widely recognized as the world’s best luxury hotel group

Strengthening its competitive position in all markets

Achieving a strong financial performance

The Group’s mission is to delight its guests

Distinctive Exotic Lively Imaginative Guest centered Harmonious Time giving

It’s Legendary! The Residences at Mandarin Oriental offer a truly

unique lifestyle with the best of both worlds: the comforts of a private home combined with the unsurpassed amenities and legendary services of Mandarin Oriental.

Guest-Centered Technology

plug-and-play live broadcast capabilities

live television feeds video conferencing web streaming live interviews to be

transmitted globally 97 television channels digital library of film: art,

films, music, video games

Socio- cultural impacts

Combining local cultural elements of each host country and city, with Oriental traditional ones.

The Oriental touches delight and surprise the guests.Mainly found in:

• design

• restaurant menus

• staff

• in spa services

Sigourney Weaver, actress

Lance Armstrong, cyclist

Kenzo Takada, fashion designer

Harry Connick Jr, musician & actor

Sa Dingding, singer & songwriter

Helene Grimau, pianist

Restaurants

Clientele made up of: hotel clients + local clients

The menus fulfill the needs and preferences of both international travelers and local clients.

Passion for creating memorable dining experiences, adding value to the brand.

The SPA

Mandarin Oriental Bangkok became the world’s first well-known hotel spa in 1999.

Provides various treatments and programs for the body, mind and spirit.

Tailor-made services

Distinguishes the brand from its competitors

Complex range of luxurious leisure activities meant to relax and entertain the guests.

• swimming

• sports (tennis, squash, golf, boxing)

• cooking classes, yoga & fitness

• many others

Leisure activities

Economic impacts

MOHG Expansion Strategy Edouard Ettedgu-appointed CEO in 1998 Wanted to add value to the company by turning it

into an international brand North America was seen as a critical market- the

company needed to strengthen its overall corporate presence in the region

Mandarin Oriental New York

New York was chosen as the first city in the new expansion strategy

Why? Center of luxury media industry One of the top 3 cities in the world

How to develop?acquire and transform an existing hotelbuild a brand new hotel

Mandarin Oriental New York Challenges of the new environment:

High labor costs due to location (the industry is labor intensive)

Difference in the perception of dining and leisure habits

The heavy investment in restaurant and spa services would be faced with high failure rates and a ratio of profit to sales very low

Travel and tourism industry In 1999, travel and tourism accounted for

10.8% of the global GDP and 200 million 200 million jobs worldwide

By 2010 the industry was expected to grow to 11.6% of global GDP and support 250 million jobs

The expected growth was slowed down by the financial crisis of 2007 and in 2009 the industry accounted for 9.2% of world GDP and more than 235 million jobs worldwide.

The luxury hotel industry

Target group: high average net worth individuals

Customer expectations: amenities and facilities like spa services, celebrity chef run restaurants, design quality and aesthetics and the experience of a superior service

Competition

Main competitors in the luxury hotel industry: Accor Hospitality Four Seasons Starwood Hotels and Resorts (St. Regis) The Peninsula Hotels Marriott Hotels (Ritz-Carlton)

Competiton

Two main ways to manage competition:

A global outlook focusing on the strongest competitors in the industry (including individual properties with historical heritage)

A regional outlook by focusing on the five primary luxury competitors in the geographical proximity

Financial data

Total revenue: $ 513.2 million Net profit: $44.1 million Earnings per share: 4.48 US cents