Formosa International Hotels Corp (FIH, 晶華國際酒店集團) yesterday said that its board of directors would not collect a bonus from last year’s earnings and senior executives would take a temporary pay cut of 30 percent to help the company ride out the COVID-19 pandemic.
The decision was made after the board approved last year’s earnings results. The nation’s top hotel and restaurant operator posted NT$1.38 billion (US$45.39 million) in net profit, or earnings per share of NT$10.58.
That represents a 2 percent decline from a year earlier, as the group can no longer recognize income from properties overseas after selling its majority stakes to InterContinental Hotels Group PLC.
Photo: CNA
“I’m grateful to the board directors and senior executives for their understanding and sacrifices,” FIH chairman Steven Pan (潘思亮) said.
“The group is to take advantage of the slow season to upgrade its products and services so that it can remain competitive during this tough time,” he said.
FIH’s move came after top retail and online travel brand Lion Travel Service Co (雄獅旅行社) last week introduced similar measures, which Pan praised as “admirable.”
The board also called on the government to focus on the plight facing the tourism and hospitality industry due to the pandemic.
Major hotel chains in Taiwan have seen their business plunge by 30 to 50 percent from a year earlier as foreign tourist arrivals have come to a virtual standstill, while domestic travelers favor staying home to avoid being exposed to the virus.
FIH said that it would distribute a cash dividend of NT$3.92 per share based on earnings from the second half of last year, as it has sufficient liquidity in the medium term.
The company had already distributed a cash dividend of NT$6.12 per share based on earnings made in the first half of last year.
Despite its generous payout scheme, FIH shares tumbled 5.2 percent to close at NT$94.8 yesterday, Taiwan Stock Exchange data showed.
They have dropped 43.57 percent so far this year, more than the broader market’s decline of 25.9 percent.
The group, which owns the Regent Taipei, Silks Place (晶英) and Just Sleep (捷絲旅) hotel brands, as well as independent restaurants, is seeking to shore up business through major discount offers, as its peers are doing. Many are also launching takeout food services to drive up food and beverage sales.
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