Hotel and restaurant operator FDC International Hotels Corp (雲品國際) in the third quarter saw its net profit slump 34.32 percent from a year earlier to NT$21.78 million (US$704,809), dragged by its restaurant conversion efforts.
The slowdown might come to an end this quarter with the opening of Gala de Luxe (頤璽) in New Taipei City’s Sinjhuang District (新莊) to replace seafood buffet restaurant Giardino (品花苑).
FDC closed the loss-making buffet restaurant in May and spent months converting it into a banquet facility with a potentially higher profit margin.
Demand for wedding banquets slackened in the third quarter as Taiwanese traditionally refrain from tying the knot during Ghost Month, which this year fell between Aug. 11 and Sept. 8, FDC said.
FDC owns banquet facilities in New Taipei City and Taoyuan under the brand Gala de Chine (頤品大飯店).
Profit margins for banquet operations are twice as high as that for other restaurants, prompting the group to grow its banquet arm despite sharp competition, FDC president David Ding (丁原偉) said previously.
Revenue last month more than doubled to NT$227 million, the highest for the month of October, thanks to the inclusion of Palais de Chine (君品酒店) into the group and the launch of Gala de Luxe, FDC said.
Gala de Luxe might need more time to become an evident profit driver after one-off severance compensations for Giardino employees, asset impairments, renovation and other conversion costs, it said.
For the first three quarters, FDC accumulated NT$108.7 million in net profit or earnings of NT$1.66 per share, down 24.5 percent from the same period last year, it said in a statement.
FDC’s flagship property Fleur de Chine (雲品酒店) near Sun Moon Lake is to place more emphasis on room charges, instead of occupancy rates, in the pursuit of a better profit margin, the company said.
Daily room rates at the resort in Nantou County surpassed NT$8,000 per night this year as it gains headway in drawing independent travelers and cuts its dependence on tour groups, which have lower accommodation budgets, officials said.
Domestic travelers account for 75 percent of clientele, allowing the hotel to emerge unharmed from a drop in Chinese tourists, officials said.
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