The benefits of brand extension are being exploited by Mandarin Oriental, which is bidding to make itself a dominant player in the luxury hotel segment as it breaks through the 10,000 room barrier.
It currently has nine Residences at Mandarin Oriental in development, opening between 2008 and 2010.
Only one of these, in London, is an owned property. But the company benefits both from one-off branding fees and the ongoing supply of services to the Residences. There are 16 hotels in development and, with the exception of Paris, all are management contracts. The group now has 9,800 rooms in operation or planned and is set to reach the 10,000 target in the next few years. More than half of its portfolio is now outside of Asia.
EBITDA at the group in the first half was US$85m compared to US$49m last year when its flagship property in Hong Kong was closed. Revenue was up 20% to US$477m.