Landis Hospitality Group (麗緻餐旅集團) yesterday approved plans to close Landis Taichung Hotel (台中亞都麗緻飯店) next week, as the COVID-19 outbreak sharpens losses in an increasingly crowded market.
“As the virus outbreak is to persist for a while, the board decided it is better to shut down the Taichung property to rein in losses,” Landis Hospitality director of finance and accounting Kay Ku (古亦敏) told a news briefing at the Taipei Exchange Market.
The 13-year-old property is the first five-star hotel to exit the Taiwanese market as tourist arrivals fall and local travelers forgo gatherings over fear of the flu-like disease.
The outlet has accumulated NT$350 million (US$11.7 million) in losses as of the third quarter of last year, with slim chances of generating profit against growing competition and operation costs, the hotel and restaurant operator said.
The group — which also runs the Landis Taipei Hotel (台北亞都麗緻飯店) and has franchise relationships with four other hotels in New Taipei City, Hsinchu and Tainan — also said that high rent expenses contributed to the closure, which is to take effect on Monday.
Landis Hospitality said that it would seek arbitration if the landlord, Cathay Life Insurance Co (國泰人壽), claims damage beyond the premature cancelation fees stipulated in the lease. The group reportedly sought rent concessions, but to no avail.
High rent forced Westin Taipei (台北威斯汀六福皇宮) out of the market in 2018.
Despite its convenient location in central Taichung, Landis Taichung struggled in an increasingly crowded market that has been joined by the Place Taichung (台中大毅老爺行旅) and Millennium Hotels and Resorts (台中日月千禧酒店), as well as other international hotel brands that are expected to open in the area.
Landis Hospitality would help more than 200 employees find jobs at other hotels and provide full refunds for hotel and restaurant vouchers, group chairwoman Michelle Hsu (徐儷萍) said.
With a focus on business travelers, the hotel failed to turn a profit since its 2007 opening, with the exception of 2010.
Hsu said that she had tried to defend the Taichung property, which has come under criticism from the board over the years for its poor earnings.
The affiliated Pause Landis (璞石麗緻溫泉會館) in New Taipei City’s mountainous Wulai District (烏來) has halted operations from Feb. 14 to Sunday next week, as the hot-spring resort has also been hard hit by the outbreak.
Hsu did not comment on reports that Cathay Life’s affiliated hotels would seek to fill the vacancy.
The group reported NT$54.01 million in net losses for the first three quarters of last year, with the hotel wing accounting for 80.74 percent, Landis Hospitality data showed.
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