Annual Report 2022
Mandarin Oriental Hotel Group is an international hotel investment and management group
with luxury hotels, resorts and residences in sought-after destinations around the world. Having
grown from its Asian roots 60 years ago into a global brand, the Group now operates 36 hotels and
nine residences in 24 countries and territories, with each property reflecting the Group’s oriental
heritage, local culture and unique design. Mandarin Oriental regularly receives international recognition
and awards for outstanding service and quality management, and has a strong pipeline of hotels and
residences under development. The Group has equity interests in a number of its properties and
adjusted net assets worth approximately US$4.9 billion as at 31st December 2022.
Mandarin Oriental continues to drive its reputation as an innovative leader in luxury hospitality,
seeking selective opportunities to expand the reach of the brand, with the aim to maximise
profitability and long-term shareholder value.
The parent company, Mandarin Oriental International Limited, is incorporated in Bermuda and
has a primary listing in the standard segment of the London Stock Exchange, with secondary listings
in Bermuda and Singapore. Mandarin Oriental Hotel Group International Limited, which operates
from Hong Kong, manages the activities of the Group’s hotels. Mandarin Oriental is a member
of the Jardine Matheson Group.
Contents
1 Corporate Overview
3 Corporate Information
4 Highlights
6 Chairman’s Statement
8 Group Chief Executive’s Review
14 Operating Summary
16 Development Portfolio
18 International Brand Recognition
20 Sustainability
29 Financial Review
34 Directors’ Profiles
36 Financial Statements
98 Independent Auditors’ Report
107 Report of the Valuers
108 Five Year Summary
109 Responsibility Statements
110 Corporate Governance
137 Shareholder Information
138 Mandarin Oriental Hotel Group Contact Addresses
2 Mandarin Oriental International Limited
Mandarin Oriental Hotel Group
International Limited
Directors
John Witt Chairman
James Riley Group Chief Executive
Matthew Bishop Chief Financial Officer
Graham Baker
Kieren Barry
Matthew Bland
(joined the board on 1st April 2022)
Francesco Cefalu
(will join the board on 1st April 2023)
Paul Clark
Joanna Flint
Christoph Mares
Vincent Marot
Paul Massot
(will retire on 31st March 2023)
Anne O’Riordan
Y.K. Pang
Jeremy Parr
(stepped down on 31st March 2022)
Company Secretary
Jonathan Lloyd
Directors
Ben Keswick Chairman
John Witt Managing Director
James Riley Group Chief Executive
Matthew Bishop
Jinqing Cai
Adam Keswick
Archie Keswick
Y.K. Pang
Richard Solomons
Company Secretary
Jonathan Lloyd
Registered Office
Corporate Information
3Annual Report 2022
Mandarin Oriental International Limited
Combined revenue exceeded 2019 levels
Group returns to underlying profit
Strong performance from management business, particularly resort hotels
Good recovery by owned hotels, although results impacted by Hong Kong and Tokyo
Two new hotels and two new residences opened and seven new projects announced
Results
Year ended 31st December
2022
US$m
2021
US$m
Change
%
Combined total revenue of hotels under management
1
1,568.1 1,053.5 49
Revenue 454.1 316.9 43
Underlying EBITDA (Earnings before interest, tax,
depreciation and amortisation)
2
111.4 40.7 174
Underlying profit/(loss) attributable to shareholders
3
7.6 (68.1) n/a
Revaluation loss on investment property under development (104.1) (73.9) (41)
Gain on asset disposals 47.0 – n/a
Loss attributable to shareholders (49.5) (141.4) 65
US¢ US¢ %
Underlying earnings/(loss) per share
3
0.60 (5.39) n/a
Loss per share (3.92) (11.19) 65
US$ US$ %
Net asset value per share 2.61 2.62 –
Adjusted net asset value per share
4
3.87 3.93 (2)
Net debt/shareholders’ funds 11% 16%
Net debt/adjusted shareholders’ funds
4
8% 10%
1
Combined revenue includes turnover of the Group’s subsidiary hotels in addition to 100% of revenue from associate,
joint venture and managed hotels.
2
EBITDA of subsidiaries plus the Group’s share of EBITDA of associates and joint ventures.
3
The Group uses ‘underlying profit/loss’ in its internal financial reporting to distinguish between ongoing business performance
and non-trading items, as more fully described in note 33 to the financial statements. Management considers this to be a key
measure which provides additional information to enhance understanding of the Group’s underlying business performance.
4
The Group’s investment properties are carried at fair value on the basis of valuations carried out by independent valuers at
31st December 2022. The other freehold and leasehold interests are carried at amortised cost in the consolidated balance sheet.
Both the adjusted net asset value per share and net debt/adjusted shareholders’ funds at 31st December 2022 have included the
market value of the Group’s freehold and leasehold interests.
Highlights
4 Mandarin Oriental International Limited
Net debt/adjusted shareholders’ funds
Underlying EBITDA and net interest expense
US$m
US$m
US$m
US$m
Net debt
Adjusted shareholders’ funds
Net interest expense
IFRS 16 ‘Leases’ impact on EBITDA and
interest on lease liabilities
Underlying earnings before interest, tax, depreciation
and amortisation (EBITDA)
Asia
America
Europe, Middle East and Africa (EMEA)
Rooms
Food and beverage
Others
2022
2022
2022 2022
900.0
533.8
1,568.1
134.3
102.6
18.0
111.4
2.1
20.1
8.8
375.8
4,896.7
7.7%
Combined total revenue
by type of business
Combined total revenue
by geographical area
2021202020192018
2021
275.5
239.0
593.0
78.5
2020
718.1
491.8
1,325.1
115.2
2019
763.1
514.8
1,397.6
119.7
2018
565.3
360.0
1,053.5
128.2
2021
(85.4)
14.2
(74.2)
1.7
15.9
11.2
144.0
16.2
154.5
2.7
18.9
10.5
179.1
16.4
1.6
18.0
187.9
8.8
30.7
14.6
40.7
2.6
17.2
10.0
2018 2019
2020
2021
506.2
5,170.9
9.8%
300.4
5,936.1
5.1%
284.7
5,826.6
4.9%
517.5
4,965.7
10.4%
202020192018
1,568.1
462.1
275.0
831.0
593.0
278.6
76.2
238.2
1,325.1
636.1
348.6
340.4
1,397.6
758.7
358.0
280.9
1,053.5
354.0
170.4
529.1
5Annual Report 2022
Chairman’s Statement
Overview
2022 has been a year of transition, after two years in which the global hospitality industry was badly hit by the
pandemic. Travel restrictions in Europe, the Middle East and America fell away during the first quarter, but East
Asia continued to be hampered by constraints on movement well into the fourth quarter. The performance of the
Group recovered strongly in the year, with combined total revenue of hotels under management of US$1.6 billion
in 2022, a significant increase from 2021 and 18% above 2019.
2022 Financial performance
Underlying earnings before interest, tax, depreciation, and amortisation (‘EBITDA’) were US$111 million, compared
to US$41 million in 2021. The Group achieved an underlying profit of US$8 million for the full year, its first
profit since 2019. Although profitability remained significantly below pre-pandemic levels, this is a substantial
improvement compared with 2021, when the Group recorded an underlying loss of US$68 million.
Non-trading losses of US$57 million (US$73 million in 2021) comprised a US$104 million (3%) non-cash decrease
in the valuation of the Causeway Bay site under development, offset by a US$47 million realised gain from the sale
of Mandarin Oriental, Washington D.C. in September 2022, leading to a loss attributable to shareholders of
US$49 million.
At 31st December 2022, the adjusted net asset value per share, which reflects the independent valuation of both the
Group’s owned hotel properties and of the Causeway Bay site, was US$3.87, a 2% decrease compared with 2021.
Net debt fell to US$376 million from US$517 million at the end of 2021. Gearing as a percentage of adjusted
shareholders’ funds was 8%, compared to 10% at the end of 2021.
The Group remains well funded, and its liquidity position remained robust, with US$226 million of cash reserves
and US$471 million in available, committed debt facilities.
No dividend will be paid in respect of 2022.
Year in review
The Group’s performance benefitted from the resumption of normal travel conditions as 2022 progressed. Most of
the Group’s owned or partially owned properties reported better earnings in 2022. Performance from owned hotels,
however, continued to be adversely affected by lower contributions from the Hong Kong and Tokyo hotels, whose
performance was heavily impacted by COVID restrictions throughout most of the year. Results were notably better
in London, Paris, Singapore, and Bangkok, driven by improvements in occupancy and high rates. Overall EBITDA
from the Group’s owned hotel business was US$77 million, compared to US$24 million in 2021. After depreciation
and interest charges, there was an underlying loss from the Group’s property interests of US$7 million in 2022,
compared to a loss of US$71 million in the prior year.
The Group’s management business recorded a stronger performance, with an EBITDA of US$34 million, compared
to US$17 million in 2021. Management fees increased in particular in resort destinations such as Bodrum, Lake
Como, and Dubai. The Group’s management business reported an underlying profit of US$17 million in 2022,
compared to US$5 million in 2021.
6 Mandarin Oriental International Limited
Development
In 2022, the Group announced seven new management contracts, in Greece, Italy, Egypt, Kuwait, the Maldives,
China and Vietnam. The Group’s robust development pipeline includes 26 projects expected to be completed in the
next five years.
The Group opened two new hotels in the year, in Shenzhen, China and Lucerne, Switzerland, and two standalone
residences in Barcelona, Spain and Beverly Hills, USA. Five projects are scheduled for opening in 2023: Mayfair in
London, Costa Navarino in Greece, Muscat in Oman, Zurich in Switzerland, and residences in New York.
The Causeway Bay site in Hong Kong, which is being redeveloped as a mixed-use office and retail complex, remains
on track to complete in 2025.
Sustainability
We continued to make progress against our various sustainability goals and commitments in 2022, and have set
long-term environmental targets for each of our hotels. We have largely achieved our goal to eliminate single-use
plastics in our hotels and we remain committed to improving this. Our ambitious goals for the future include
actively reducing food waste, expanding our responsible procurement practices, and empowering our colleagues
further in carrying out volunteering activity.
People
On behalf of the Board, I would like to express my sincere appreciation to all our colleagues for their dedication and
commitment throughout the year. Our colleagues are central to the legendary guest experience for which the Group
is renowned, and we remain focussed on being an employer of choice.
Outlook
The Group expects to see a strong improvement in its results in 2023, particularly as restrictions in East Asia
continue to ease. With a robust pipeline of new developments and a globally recognised brand, the Board also
remains confident in the long-term success of the Group.
Ben Keswick
Chairman
2nd March 2023
7Annual Report 2022
Group Chief Executive’s Review
Mandarin Oriental is widely recognised as one of the world’s leading luxury hotel groups, and the heritage of our
brand is a thread that runs through each of our properties. 2022 has been an important year of transition for the
Group, as we have moved from a difficult pandemic environment to the return of more normal travel conditions
and hence recovered our ability to operate. We remain focussed on building on and leveraging the strength of our
brand – oriental mastery of luxury and service excellence underpinned by our people. We are committed to our
vision – A World of Fans – as well as our strategy to grow our development pipeline and our management business.
We aspire for the Fan to grow in relevance and stature outside of the boundaries of our properties, paving the way
for Mandarin Oriental to evolve from a luxury hotel group to a luxury brand.
In 2022, it was pleasing to see the Group make a robust recovery and deliver increasingly improved performance,
as travel conditions around the world gradually returned to normal. As we emerge from the pandemic, we have
positioned the Group for long-term growth, maintained our service standards and continued to create moments
of delight for our guests.
Our hotels performed strongly in regions without travel restrictions and were able to sustain their market-leading
position. In Asia, the operations of our hotels were hampered by travel restrictions. In Southeast Asia these began
to be relaxed in the middle of the year but those in China and Japan continued into the fourth quarter. However,
with the full relaxation of these restrictions at the end of 2022, we are confident of a strong rebound in performance
in 2023. Financially, while performance remained below pre-pandemic levels in the year, the Group reported a
significant improvement in EBITDA to US$111 million, compared to US$41 million in 2021. For the first time
since the outbreak of the pandemic in 2020, the Group was able to record an underlying profit for the year.
In addition to delivering improved operational and financial performance, we are encouraged that the Group has
made great strides across our strategic priorities.
In 2022, the Group opened two new hotels in Shenzhen and Lucerne, and two residences in Barcelona and Beverly
Hills. We expect to open several new properties across Europe, the Middle East, and Asia in 2023 and to complete
a comprehensive renovation of Mandarin Oriental, Singapore. In addition, seven new management contracts were
announced in 2022, further strengthening our development pipeline. We are focussed on delivering this pipeline
and bringing our new properties to market.
2023 also marks the 60th anniversary of the opening of the Group’s first hotel – Mandarin Oriental, Hong Kong.
The Group is delighted to commemorate this historic occasion with several celebratory events planned throughout
the year.
We relaunched mandarinoriental.com in 2022, following a comprehensive overhaul resulting in enhancements to
elevate the guest digital experience and drive higher revenue through our digital sales channels. Our guest recognition
programme – Fans of M.O. – continues to grow, and we now have over 1.4 million members, representing an increase
of 32% since 2021. We extended our footprint with the launch of Mandarin Oriental Exclusive Homes, a hand-picked
collection of the most luxurious private homes. We are also proud to be able to announce that we have achieved the
elimination of 99% of single-use plastics across our portfolio of hotels. As we look ahead, we are optimistic about
the future.
8 Mandarin Oriental International Limited
2022 Performance
Overall, the Group’s financial performance improved significantly in 2022. Following the removal of travel
restrictions in most parts of the world, the Group experienced strong demand, and occupancy increased
considerably compared to 2021. Our hotels also achieved high rates, with many setting new records, as guests
sought luxury and superior service. In China and Japan, however, travel restrictions that were in place until late
2022 limited the recovery of our hotels compared to 2021 and other regions.
Combined total revenue from hotels under management was US$1,568 million, a 49% increase compared to 2021,
supporting the Group’s return to profitability. EBITDA was US$111 million and underlying profit was US$8 million.
This performance represents a marked improvement compared to our 2021 financial performance, when we reported
an EBITDA of US$41 million and an underlying loss of US$68 million.
The improved performance was primarily driven by higher occupancy and strong rates in Europe, the Middle East,
and Africa (‘EMEA’) and America. While occupancy generally remained slightly below pre-pandemic levels in key
gateway cities and leisure destinations, our hotels achieved record rates, resulting in strong Revenue Per Available
Room (‘RevPAR’). In EMEA, RevPAR was US$564, 45% above 2021, driven by improved occupancy and average
daily rate (‘ADR’). RevPAR also exceeded 2019 by 22%. Similarly, in America, the Group recorded RevPAR of
US$397, 50% above 2021.
In Asia, the Group achieved occupancy of 39% in 2022, compared to 35% in 2021. Travel restrictions in Southeast
Asia were relaxed gradually throughout the year, and the Group’s hotels saw quarter-on-quarter improvements in
occupancy, which led to steadily improving financial performance. In China and Japan, however, travel restrictions
remained in place for almost all of 2022, and demand was suppressed, impacting the performance of our hotels in
those markets.
Owned hotel performance
The Group’s owned hotels, which contribute a major proportion of the Group’s results, recorded an EBITDA of
US$77 million in 2022, considerably higher than the US$24 million result in 2021. These hotels, however, made an
underlying loss of US$7 million in 2022, predominantly due to depreciation charges attributable to the properties.
Of the Group’s 14 owned or partially owned hotels, operations in the Group’s two key profit-generating hotels in
Hong Kong and Tokyo were seriously hampered by stringent travel restrictions for the majority of the year. These
restrictions were removed in the fourth quarter, but not in time to allow much of an improvement in their financial
performance. Prior to the pandemic, Hong Kong was the Group’s most profitable hotel. In 2022, it delivered
a marginally positive EBITDA, supported by food and beverage performance, but remained well below peak
performance levels. Tokyo incurred a significant EBITDA loss, due to the rental charges arising from it being a
leased property. The Group’s owned hotels in Southeast Asia benefitted from the gradual relaxation of restrictions
earlier in 2022. Popular destinations such as Bangkok and Singapore delivered robust profitability, with these hotels
both achieving EBITDA of US$5 million in the fourth quarter, a significant improvement from the third quarter.
In EMEA and America, where trading conditions substantially improved compared to last year, all hotels achieved
positive EBITDA. Of note were contributions made by the Group’s hotels in London and Paris, both of which
delivered profitability at or above pre-COVID levels driven by strong rates. Madrid, which reopened in 2021 following
a three-year restoration, also delivered solid performance. In America, the Group’s hotel in Miami delivered another
good result, and hotels in key cities such as New York and Boston were able to achieve record rates.
9Annual Report 2022
Group Chief Executive’s Review Continued
Management business performance
The Group’s management business delivered a higher proportion of the Group’s overall result than it did
historically. As a result of the improved trading conditions and Mandarin Oriental’s expanded portfolio of hotels
and residences, total hotel management fees were US$60 million, 57% higher than 2021. In 2022, the management
business reported a positive EBITDA of US$34 million and an underlying profit of US$17 million, a significant
improvement compared to US$17 million EBITDA and US$5 million underlying profit in 2021.
Most hotels delivered higher management fees than last year, and leisure destinations such as Dubai, Bodrum,
and Lake Como, continued to achieve high rates and occupancy due to strong demand, and produced another
record year of management fees. Whilst the Group has remained agile in adapting to changes in restrictions and
government policies, results in China were inevitably impacted. Only now are normal travel restrictions returning
to the region, and the Group is confident in a fast recovery in travel and improved trading conditions in 2023.
Strategy –
A World of Fans
Through the pandemic, we were focussed on near-term priorities to rebuild business levels and win new business,
uphold the brand’s reputation for quality, and maintain our agile approach to operations to improve profitability.
As we emerge from the pandemic, our vision – A World of Fans – is advancing both the value of the brand and the
profitability of the Group. We see every interaction, both internally and externally, as an opportunity to build
meaningful and long-lasting relationships with a global community of Fans. We are focussed on continuing to
progress our strategic priorities, outlined below, to create the right foundation to drive sustainable long-term growth.
1) Elevating our brand
Mandarin Oriental is a globally recognised brand and the Group’s most powerful asset. The foundation lies in
our portfolio of unique properties delivering 21st century luxury and legendary, personalised, and empathetic
service reflecting the Group’s oriental heritage. We continue to develop the brand’s presence by expanding our
global footprint through new hotels and residences. Partnerships with other luxury brands continue to enhance
the brand beyond the four walls of our hotels. We remain focussed on growing the Group’s existing ventures,
including the continual expansion of Mandarin Oriental Exclusive Homes, our online retail store Shop M.O.,
and our strategic alliance with The Oberoi Group. Our long-term objective is to evolve from a luxury hospitality
brand to a luxury brand. We will continue to review and evaluate strategic opportunities with the goal of
unleashing the full potential of the brand and reaching a wider audience in new sectors.
10 Mandarin Oriental International Limited
2) Powering our core
As our business grows, we increasingly need to leverage our data to gain deeper insight into our properties and
determine new strategies for improved performance and growth. The data we gather and analyse today provides
additional feedback on the strengths and weaknesses in the proposition of each of our hotels. Our colleagues are
actively using this to drive better services, an enhanced guest experience, improved revenue management and
more effective marketing. There is still more, however, that we can do with our data, and we have reorganised
our internal teams to drive excellence in this area, as well as enhancing visibility across all digital and
transformation initiatives.
We are also focussed on driving operational efficiencies by enhancing the effectiveness of our systems and
processes to ensure our internal functions are modernised to enable scalability.
3) Lifting our people
Evolving and protecting our unique cultural DNA remains critical to securing the consistent delivery of service
excellence, a crucial differentiator of Mandarin Oriental. The Group’s focus on acquiring and retaining the right
talent, providing an engaging colleague experience, and preparing the organisation for growth remains central
to our people strategy and is increasingly relevant as the hospitality industry faces talent shortages. We are
embarking on a human resources (‘HR’) transformation to support the needs of a changing workforce. We
recently launched a digital, interactive learning and development platform. In addition, we will be implementing
a HR operating model that simplifies our technology platform landscape and will be redesigning our processes
to enhance our understanding of our talent to support organisational agility.
4) Exceptional quality
The Group firmly believes that its competitive advantage lies in its portfolio of unique properties and consistent
delivery of service excellence, characterised by the warm, engaging, personal interactions we have with our
guests. As we plan for the opening of 26 new hotels and residences in the next few years, we are constantly
evolving our guidelines across design and technology to curate a portfolio of distinct, highly appealing
properties. We are also focussed on leveraging new technologies such as Hello MO, our on-property live guest
communication channel, to provide a customer-centric, personalised experience for guests. In addition, we are
committed to maintaining our high service levels, striving to exceed our guests’ expectations, and evolving our
standards for future guests.
11Annual Report 2022
Group Chief Executive’s Review Continued
Business development strategy
The Group’s long-term strategic priority is to grow its management business significantly by securing management
contracts in key destinations, leveraging the strength of our brand. We will retain ownership of iconic properties
in brand-defining locations, in order to benefit from operational profitability and capital appreciation over the
long-term, while conducting regular reviews of the Group’s asset portfolio.
Today, we operate 36 hotels and nine residences. In 2022, we opened two new hotels in Shenzhen and Lucerne, and
two standalone residences in Barcelona and Beverly Hills. We also announced seven new management contracts in
Costa Navarino (Greece), the Maldives, Cairo, Cortina (Italy), Tianfu (China), Kuwait, and Bai Nom (Vietnam).
These new properties are all management contracts, expanding the Group’s presence into new countries and new
propositions, including the Group’s first alpine resort.
Over the past few years, we have diligently built a robust pipeline, which now comprises over 26 projects expected
to open in the next five years. We are confident that our development strategy will enable a healthy growth rate.
We remain focussed on maintaining the momentum of delivery of new hotel and residences openings and
continued replenishment of our development pipeline. While we are somewhat reliant on developers, we are
working closely with our property owners to ensure the smooth delivery of projects and meet our target of opening
four to five new properties each year. In 2023, we expect to open four new hotels in London, Muscat, Zurich and
Costa Navarino, and residences in New York.
As part of the regular review of our asset portfolio, we completed the sale of Mandarin Oriental, Washington D.C.,
in September 2022.
Looking ahead, the redevelopment of the site in Causeway Bay, Hong Kong is on track to complete in 2025.
Sustainability
Corporate responsibility values are deeply ingrained in Mandarin Oriental’s culture, and sustainability implications
are carefully considered in every decision across the Group. One of our guiding principles is ‘Acting with responsibility’,
and we have established a Naturally Better programme to direct our efforts towards the well-being of the planet,
communities and individuals. As the Group grows, its responsibility to drive sustainability in the way its hotels
operate becomes even more impactful.
We aim to achieve the best possible environmental performance across all of our hotels. We have developed 10-year
environmental targets for each of our hotels, differentiated by reference to the circumstances, priorities and location
of each property and made good progress against these.
In the past year, we have continued to push ahead across our various sustainability goals and commitments, and
we are proud to have achieved considerable success through collective action. This includes broadly achieving our
target to eliminate single-use plastics in our hotels, by reaching 99% elimination in 2022.
Going forward, we will continue to focus on advancing our key sustainability priorities. Our ambitious goals
include actively reducing food waste and expanding our responsible procurement practices. We will also be
providing additional paid leave for volunteering, to empower colleagues to interact with their communities and
contribute to causes that are close to their hearts.
12 Mandarin Oriental International Limited
Culture and colleagues
At the heart of Mandarin Oriental’s reputation as a luxury hotel group is its culture, derived from its oriental
heritage and an unwavering focus on delivering exceptional, personalised, and empathetic service. We continue
to foster a culture of inclusivity and innovation, that encourages new and different behaviours and ideas, to stay
relevant with the pace of change in today’s world. We empower colleagues to feel comfortable in being themselves
and in voicing their ideas. We encourage our colleagues to believe in and deliver our core values of doing the right
thing for customers, communities, and the planet. We must continue to actively support and reward these
behaviours to sustain this culture and mindset.
Our vision – A World of Fans – can only be achieved through our people. I would like to personally thank each
and every one of my colleagues for their commitment, dedication, and hard work in the past year. Their continuing
desire to deliver unique and memorable experiences for our guests and the pride with which they carry the
Mandarin Oriental brand is central to the success of the business.
The year ahead
2023 will be a very busy year for the Group with multiple new openings of hotels and residences, and improvements
to our existing portfolio. We expect the Group’s financial performance in 2023 will benefit from the return of
demand in Hong Kong and Tokyo, two of the Group’s key profit-contributing hotels. We are confident that, with
our globally recognised brand, expanding Fan base, robust pipeline of projects, and our people, we are well-placed
to benefit from improving market conditions and to achieve long-term growth.
James Riley
Group Chief Executive
2nd March 2023
13Annual Report 2022
Group’s subsidiary hotels RevPAR
ASIA
Total portfolio RevPAR
Occupancy is calculated based on the number of occupied rooms out of the total number of available rooms in which
the hotel is in operation during the period. The like-for-like RevPAR presented in the table above includes all hotels
that were in the Group’s portfolio and operating for the entire year of both 2021 and 2022. Any new openings,
closures or disposals during the period are excluded.
Operating Summary
US dollar
2022
US$
2021
US$
% Change
Asia 123 86 43
Europe, Middle East
and Africa 609 400 52
America 397 265 50
Total 306 203 51
Constant currency
2022
US$
2021
US$
% Change
Asia 130 86 51
Europe, Middle East
and Africa 709 400 77
America 401 265 51
Total 340 203 68
Mandarin Oriental, Tokyo 100% leasehold
2022 2021 % Change
Available rooms 179 179 –
Average occupancy (%) 50.5 28.9 75
Average room rate (US$) 485 504 (4)
RevPAR (US$) 245 145 69
Mandarin Oriental, Hong Kong 100% ownership
2022 2021 % Change
Available rooms 494 494 –
Average occupancy (%) 29.8 30.2 (1)
Average room rate (US$) 339 315 8
RevPAR (US$) 101 95 6
Mandarin Oriental, Jakarta 96.9% ownership
2022 2021 % Change
Available rooms 272 272 –
Average occupancy (%) 52.2 49.1 6
Average room rate (US$) 121 92 32
RevPAR (US$) 63 45 40
14 Mandarin Oriental International Limited
Mandarin Oriental, Boston 100% ownership
2022 2021 % Change
Available rooms 148 148 –
Average occupancy (%) 56.6 38.3 48
Average room rate (US$) 702 666 5
RevPAR (US$) 397 255 56
EUROPE, MIDDLE EAST AND AFRICA AMERICA
Mandarin Oriental Hyde Park, London 100% ownership
2022 2021 % Change
Available rooms 181 181 –
Average occupancy (%) 60.3 30.7 97
Average room rate (US$) 1,445 1,281 13
RevPAR (US$) 871 393 122
Mandarin Oriental, Munich 100% ownership
2022 2021 % Change
Available rooms 73 73 –
Average occupancy (%) 65.8 40.1 64
Average room rate (US$) 1,041 906 15
RevPAR (US$) 685 363 89
Mandarin Oriental, Paris 100% ownership
2022 2021 % Change
Available rooms 135 135 –
Average occupancy (%) 60.2 34.0 77
Average room rate (US$) 1,284 1,094 17
RevPAR (US$) 773 372 108
Mandarin Oriental, Geneva 100% ownership
2022 2021 % Change
Available rooms 178 178 –
Average occupancy (%) 59.1 40.2 47
Average room rate (US$) 666 647 3
RevPAR (US$) 394 260 52
15Annual Report 2022
Development Portfolio
The following 25 hotels and 13 Residences at Mandarin Oriental are expected to open in the next five years.
Asia
Mandarin Oriental, Bai Nom
A new resort with branded residences in Phu Yen province, Vietnam offering 72 suites and villas, including 25 Residences. The property will spread out
across a 29-hectare site with guest accommodation located directly on the beach and dotted through the hills.
Mandarin Oriental Qianmen, Beijing
72 courtyard suites located in a traditional hutong quarter, providing a rare opportunity to experience living in an authentic Beijing residential district,
close to Tiananmen Square.
Mandarin Oriental Tianfu, Chengdu
A 267-room hotel located in Tianfu, a modern business district south of Chengdu, the capital city of Szechuan province in China.
Mandarin Oriental, Da Nang
A luxury waterfront resort comprising 69 villas and 18 Residences at Mandarin Oriental, ideally located on a spectacular beach in one of Vietnam’s most
popular leisure destinations.
Mandarin Oriental, Hangzhou
A 194-room hotel in the new Westlake 66 luxury commercial and retail complex, located close to the West Lake, a UNESCO World Heritage Site and
one of China’s primary leisure destinations, with easy access to the city’s principal business hubs.
Mandarin Oriental, Makati
A 275-room hotel located within the Ayala Triangle in Manila’s central business district of Makati.
Mandarin Oriental, Maldives
A picturesque private island resort comprising 120 stand-alone villas, including 10 branded Residences at Mandarin Oriental, with panoramic views of
the Indian Ocean.
Mandarin Oriental, Nanjing
A 106-room hotel located in a premier mixed-use development on the Qinhuai River, in close proximity to historic landmarks including the Gate of China,
which forms part of one of the longest ancient city walls in the world.
Mandarin Oriental, Phuket
A 105-room beachfront resort located on the island’s west coast in picturesque Laem Singh Bay on Millionaire’s Mile, with panoramic views of
the Andaman Sea.
Mandarin Oriental, Saigon
A 228-room hotel located in a mixed-use development in the heart of Ho Chi Minh City, close to key landmarks.
Europe, Middle East and Africa
Mandarin Oriental Shepheard, Cairo
A re-branding of the celebrated Shepheard Hotel in Downtown Cairo, currently closed for renovation. This 188-room and 88-suite property is a heritage
landmark in the city, with stunning views of the Nile and Gezira island.
Mandarin Oriental Cristallo, Cortina
A re-branding of the historic Hotel Cristallo in Cortina d’Ampezzo, Italy, which will re-open as Mandarin Oriental Cristallo, Cortina, in the summer of 2025
after a comprehensive renovation. This 83-room historic hotel enjoys impressive views of the Dolomites and will be the Group’s first alpine resort.
Mandarin Oriental, Costa Navarino
A stunning 99-villa beachfront resort in Greece, located on the southwest coast of the Peloponnese, one of the most breath-taking landscapes in
the Mediterranean.
Mandarin Oriental Downtown, Dubai
A 259-room hotel and 266 Residences at Mandarin Oriental, located on Sheikh Zayed Road, with views over downtown Dubai and direct access to the area’s
business and leisure attractions.
Mandarin Oriental Etiler, Istanbul
A 158-room hotel and 251 luxurious Residences at Mandarin Oriental, located within three standalone towers in the prestigious Etiler district of Istanbul.
Mandarin Oriental, Kuwait
A new 159-room hotel in the heart of the financial district of Kuwait City. Located in an iconic 80-storey tower, the property is designed by the award-winning
architects, Foster + Partners.
Mandarin Oriental Mayfair, London
A 50-room boutique hotel and 77 Residences at Mandarin Oriental, located on Hanover Square in the heart of London’s Mayfair district.
16 Mandarin Oriental International Limited
Europe, Middle East and Africa continued
Mandarin Oriental Punta Negra, Mallorca
A new beach resort in one of the most sought-after locations on the island of Mallorca, occupying an iconic peninsula. Surrounded by natural beauty,
the resort spreads over 3 hectares and offers 131 guestrooms, suites and bungalows just steps from the waterfront.
Mandarin Oriental, Muscat
A 150-room resort and 150 Residences at Mandarin Oriental, located on the beach in a prime city location, with views over the Arabian Sea.
Mandarin Oriental, Tel Aviv
A 225-room hotel and 231 Residences at Mandarin Oriental, in an unrivalled waterfront location overlooking one of the city’s pristine beaches.
Mandarin Oriental, Vienna
A 151-room hotel and 17 Residences at Mandarin Oriental, housed in a heritage building within the Ringstrasse in District One of Vienna, within easy
walking distance of the city’s major attractions.
Mandarin Oriental Savoy, Zurich
A re-branding of the historic Savoy Baur en Ville, currently closed for renovation. This 80-room hotel is situated within the main business centre, close to the
city’s leisure attractions and a short walk from Lake Zurich.
America
Mandarin Oriental, Boca Raton
A 163-room hotel and 88 Residences at Mandarin Oriental, part of a mixed-use complex, surrounded by Boca Raton’s most affluent, residential
neighbourhoods and a short walk from miles of pristine beaches.
Mandarin Oriental, Grand Cayman
A 100-room beachfront resort and 89 branded Residences at Mandarin Oriental, situated on 67 acres at St James Point, on the southern shore of the island.
Mandarin Oriental, Honolulu
A luxury 125-room hotel and 99 Residences at Mandarin Oriental, located on the Hawaiian island of Oahu, in the heart of the Ala Moana District.
Mandarin Oriental Residences, Fifth Avenue
69 luxurious residences located on Fifth Avenue New York, housed in an elegant 1920’s building on the corner of Fifth Avenue and 54th Street.
Opening dates are determined by each project’s owner/developer. All of the above projects will be managed by Mandarin Oriental Hotel Group with no equity
investment from the Group.
Room numbers reflect the latest estimate from each project’s owner/developer, and may therefore differ from the original announcements and the final
number once the project is completed.
17Annual Report 2022
International Brand Recognition
Mandarin Oriental continues to be recognised as one of
the world’s most esteemed luxury hotel brands. In 2022,
the Group received numerous international awards and
accolades from leading publications, travel associations
and related platforms. Key achievements included the
Group’s recognition as one of the ‘Best Hotel Brands’
by Travel + Leisure and 13 properties featured in
Condé Nast Traveller’s ‘Readers’ Choice Awards’.
In 2022, the innovation of 17 restaurants across the
Group were honoured in the Michelin guides, with
27 stars granted, eight of which received the highly
coveted two-star rating. The Group’s continued
commitment to excellence in wellness was also
highlighted, including Forbes awarding 15 hotels
with ‘Five Star Spa’ status.
Mandarin Oriental Hotel Group
Mandarin Oriental was always a solid bet for attention
to detail and exemplary service. The smiling, attentive
staff, are a reminder of what hospitality is all about;
they make you feel welcome as soon as you walk
through the door, and the overall impression is that
no request is too much.
Financial Times, UK
Mandarin Oriental, Bangkok
The world’s best hotels aren’t just beautifully designed,
meticulously staffed and flush with facilities –
the 146-year old Mandarin Oriental, Bangkok is
all of these things – they are also places infused with
a sense of fun, an anything-might-happen frisson.
I simply don’t feel like I’ve been to Bangkok unless
I’ve had at least one night soaking up the good life
at Mandarin Oriental.
Condé Nast Traveller, UK
Mandarin Oriental, Hong Kong
This hotel has always been fun – a celebration of
Hong Kong’s unique identity. Or the first time in
its history, the hotel now also has a club lounge with
cocktail hours and afternoon tea. But it’s not the new
attractions that really matter. What counts is that
Mandarin Oriental remains a much-loved symbol of
the city’s cosmopolitan history.
Condé Nast Traveller, UK
Mandarin Oriental, Barcelona
There’s no need to sacrifice luxury for location at
Mandarin Oriental, Barcelona. Its tranquil spa,
high-end restaurants and sumptuous rooms mean
this hotel is not just the ultimate city break crash pad
but a must-visit destination in its own right. So no one
will judge you if you check in then never actually
venture beyond the front door…
Country & Town House, UK
Mandarin Oriental, Doha
Mandarin Oriental, Doha opened its doors in 2019 as
the anchor for the new art, culture and sustainability
neighbourhood Msheireb Downtown Doha and
fast became one of the most tasteful retreats in the
Qatari capital. While Mandarin Oriental’s signature
hospitality and traditional white-gloved luxury prevail,
this is a hotel with Qatari heritage and soul at its core.
Condé Nast Traveller, UK
Mandarin Oriental Jumeira, Dubai
Five gorgeous pools, a breath-taking private beach,
and a fabulous spa make Mandarin Oriental Jumeira a
prime choice for honeymooners looking for a glamorous
yet relaxing stay in Dubai. With a beachfront location
right in front of Mercato Beach, Mandarin Oriental
Jumeira, Dubai is a great base for discovering all
downtown Dubai’s main attraction. The hotel is
Mandarin Oriental at its finest, as guests are greeted
with a stunning signature scent the moment you enter.
There’s certainly plenty to fall in love with there.
Glamour, UK
18 Mandarin Oriental International Limited
Mandarin Oriental Bosphorus, Istanbul
Launched in September 2021, Mandarin Oriental
Bosphorus, Istanbul was one of the most highly
anticipated hotel openings last year and it is certainly
impressive from its super chic interior to its gorgeous
location, right on the shoreline of the Bosphorus.
Forbes, US
Mandarin Oriental Hyde Park, London
Mandarin Oriental Hyde Park, London has everything
you could want from a romantic hotel stay, from an
indulgent spa with couples treatment options to a broad
selection of stylish food and drink options. The guest
rooms are elegant and contemporary, with the option
to book a view of Hyde Park’s lush greenery, and the
signature suites are worth the splurge.
Brides, US
Mandarin Oriental Palace, Luzern
There is no better base camp than the Palace hotel –
lately reborn as Mandarin Oriental Palace, Luzern –
and in particular its Panoramic Rooftop Terrace Suite,
whose elevated corner position gives 360-degree views
of the astonishing panorama. The Palace opened
in 1906, but I doubt it ever has ever looked so good
or felt so fresh as it does today – luminous, airy,
delicately scented with bergamot and pine needles.
The characterful belle époque elements have been
meticulously preserved. The more time you spend in it,
the more likely you are to appreciate the attention to
detail that has gone into its restoration.
The Telegraph, UK
Mandarin Oriental Ritz, Madrid
Madrid’s grande dame, the Ritz, opened by César Ritz
himself in 1910, has never looked so good. Dazzlingly
fresh from an impressive makeover by French design
studio Gilles & Boissier it is now part of Mandarin
Oriental group, which has spared no expense in
re-opening this Belle Époque jewel for the glamorous
Madrileños who have long frequented it.
Country & Town House, UK
Mandarin Oriental, Milan
Mandarin Oriental, Milan set within four breath-
taking 18th century buildings that would make any
architecture-lover swoon, this former Manor house
is the epitome of chic retreat with a mix of Oriental
opulence and modern Milanese swank. Seriously,
you couldn’t design a more glamorous retreat befitting
this fashion capital.
Forbes, US
Mandarin Oriental, Paris
One of the most luxurious hotels in Paris is undoubtedly
Mandarin Oriental, Paris, among the boutiques of rue
Saint-Honoré, and just a 10-minute walk away from the
world-famous Louvre. This vibrant city hotel, built
around a central, leafy courtyard, brings in the fashion
and creativity of Paris and blends it seamlessly with the
flair and hospitality that Mandarin Oriental group are
so well known for. It is a hotel full of nods to Paris’
history while simultaneously ushering in the future.
Condé Nast Traveller, UK
Mandarin Oriental, Canouan
Privacy and exclusivity are key words at Mandarin
Oriental, Canouan. With just 26 suites and 13 villas,
guests can expect impeccable service and a high
attention to detail – not to mention unmatched
ocean views at every turn.
Forbes, US
Mandarin Oriental, New York
A cornerstone of the city’s five-star hotel scene,
Mandarin Oriental’s New York City outpost is
known (for) elite service, fantastic spa, and impressive
vistas. The rooms feel equal parts timeless in their
definition of luxury and contemporary.
Condé Nast Traveler, US
19Annual Report 2022
Sustainability
Sustainability Update
‘Acting with responsibility’ is central to Mandarin Oriental’s culture, and hence, sustainability implications are
carefully considered with every decision across the Group. We are guided by our desire to ‘do the right thing’,
and this is reflected in our approach to sustainability and our pursuit to seamlessly integrate it into our operations
and processes, from daily procurement decisions to Group-wide commitments. Our sustainability framework
is designed to support Mandarin Oriental in doing the right thing for our Planet, Guests, Colleagues and
Communities with alignment to the United Nations Sustainable Development Goals, which serve as an important
reference as we grow our brand around the world.
Our strong governance structure is well established with an Executive Advisory Panel and Group Sustainability
Office supporting Sustainability Champions at every property, ensuring that sustainability is managed at every level
of the organisation including at the grassroots. Our Champions are empowered to advance our focus on reducing
our environmental impact, procuring responsibly, increasing social impact, and embedding inclusion deeper into
our culture. Our sustainability achievements in 2022 are the result of hard work on the part of our colleagues, all of
whom continue to demonstrate exceptional dedication and professionalism towards positively impacting their local
communities. Across our portfolio, we endeavour to operate responsibly and sustainably over the long term, thereby
fostering a culture that embraces diversity and promotes inclusion, which supports our colleagues and our communities.
In 2022, we appointed Lloyd’s Register Quality Assurance (‘LRQA’) as our third-party auditor to verify each hotel’s
compliance against some of our key sustainability commitments. We relentlessly continued to pursue our ambitious
goal of eliminating single-use plastics where possible
1
and verified this status for 30 out of 35 hotels by year-end –
we are confident the remaining hotels will fully comply in 2023. We estimate that our efforts to-date equate to
eliminating over 99% of single-use plastics in our operations and approximately 930 tonnes of plastic waste per
annum. While our relatively small footprint limits our contribution to global plastic reduction, we are in a strong
position to inspire important changes in the industry such as normalising plastic free supplier packaging. We have
also advanced our responsible sourcing commitments and achieved Group-wide LRQA-verified status for 100%
responsibly procured coffee, tea, cocoa, vanilla, paper and avoidance of endangered seafood types. Keeping in view
the global concern for climate change, we continue to monitor decarbonisation opportunities and that steady
progress is being made towards our 2030 environmental targets with property-led initiatives to reduce energy,
switch to renewables, conserve water and reduce waste.
In the face of mounting global societal, economic and environmental risk, we believe sustainability is essential to
enduring success and resilience. We have thus been actively expanding our sustainability programme to encompass
a good balance of environmental, social and governance (‘ESG’) components and deepening our commitments and
goals. This year, we published our Environmental Policy, Human Rights Policy, and Supplier Code of Conduct to
actively communicate our ESG commitments on our Company website.
1
Excluding supplier packaging, although we continue to work closely with our suppliers to eliminate single-use plastics.
20 Mandarin Oriental International Limited
Mandarin Oriental’s annual sustainability progress, initiatives, achievements, and best practices are covered in
more detail in the Group’s annual Sustainability Report. The 2022 report will be published in Q2 2023.
The following table shares some of the Group’s sustainability highlights as well as the corresponding United Nations
Sustainable Development Goals.
FOR THE PLANET
We place great importance on operating sustainably
over the long term as we grow our portfolio of hotels,
residences, and homes around the world. We have made
commitments towards ‘eliminating single-use plastics’
and established a programme for responsible procurement
that we intend to steadily grow. Our respect for nature and
for the people who work in the supply chain has been an
important factor in driving these initiatives. Environmental
targets for 2030 have been determined for each hotel
through a Group-wide inventory management plan with
consideration of unique locations, utility types used, and
on-site renewable sources.
a) Energy audits, in our hotels at three-year intervals,
provide insights to hotel operations, which inform
recommended strategies and efficiency projects.
Eight energy audits were performed in 2022 in line
with guidance from the American Society of Heating,
Refrigerating and Air-conditioning Engineers (‘ASHRAE’)
Procedures for Commercial Energy Audits with
estimated future savings of US$1.2 million per annum
b) Actively eliminated single-use plastics where possible
across our hotels with LRQA verification
c) Achieved 100% LRQA-verified responsibly sourced
coffee, tea, cocoa, vanilla and paper
d) Avoided serving 19 types of endangered seafood species
which are listed on MOHG’s Endangered Seafood
Avoid List, aligned with the latest WWF Endangered
Seafood Guide
e) Innovative digital processes continued to significantly
reduce paper usage across operations
FOR GUESTS AND COLLEAGUES
We are well known for our health and wellness philosophy
and the holistic care of the body, mind and spirit. We offer
sustainably sourced in-room and spa amenities across our
portfolio, complimentary fitness classes, in-room wellness
videos and signature spa treatments for strong healthy
bodies and to promote mindfulness.
We foster a culture of inclusion and empowerment, where
colleagues feel comfortable to be themselves and voice
their ideas. Our Diversity and Inclusion principles are
incorporated across our business and HR practice.
a) Ongoing implementation of WeCare programme
of enhanced health and safety protocols across
our portfolio
b) Rolled out sustainability eLearning, which was completed
by all colleagues
c) Organised a series of ‘Inner Strength-Outer Strength’
activities on Global Wellness Day to boost colleagues’
physical health and mental resilience
d) Continued raising awareness on Diversity and Inclusion,
with ongoing Group-wide training on ‘Leading a safe,
respectful and inclusive Mandarin Oriental’
21Annual Report 2022
Sustainability Continued
FOR COMMUNITIES
We contribute positively to the local communities
we belong to. That means supporting on-the-ground
initiatives that enhance and benefit our immediate
society. Each one of our colleagues are committed
to identifying impactful ways to support their local
communities and actively engage in initiatives.
a) US-based FANtastic Match donated over US$65,000 to
US colleague charities
b) 17 years of support for Asian Cultural Council’s Mandarin
Oriental Fellowship for Cultural Heritage Preservation
c) The Group has collectively clocked more than 20,000
volunteer hours and donated over US$1.5 million in
support of diverse social segments in various communities
d) Seven hotels have participated in an ‘MOgiving’ pilot
program launched in April involving one paid day of
volunteering offered to all colleagues within 2022.
MOgiving engagement must be with charities or
organisations that are relevant and genuinely support
the local community, and the paid hours are captured
in the normal payroll with no additional costs incurred.
Pilot hotels have logged on average over 250% more
volunteer hours compared to hotels who do not have
the paid volunteering program in place
e) Over 400 initiatives conducted by colleagues in support
of local causes chosen by our colleagues. Initiatives
include blood donation drives, mental health awareness,
environment clean-ups, food and other in-kind donation,
and training opportunities for people with disabilities and
special needs
Some highlights:
i) Mandarin Oriental, Prague, provided accommodation
to three Ukrainian women refugees for three months.
Two out of the three women were employed by
the hotel while living there. The three women
were able to utilise the many services at the hotel
including laundry
ii) Mandarin Oriental, Doha, donated 10% of revenue
sales generated from Afternoon High Tea during
October 2022 to the Qatar Cancer Society.
They donated US$2,500 to support breast
cancer research and treatments in Qatar
iii) Mandarin Oriental, Miami hosted an event for
28 foster families of 62 adults and 66 foster children.
Lunch was served with different games and Santa
photo booths. Hotel Culinary and Banquet teams
spent 240 hours to make the event a success
iv) Mandarin Oriental, Taipei donated US$10,000
from the ‘Love Share’ Christmas Charity Sales
and contributed a total of 3,000 volunteer hours
to Taiwan Pawprint K9 Rescue and Taipei Stray
Cats Protection Association, with the aim of
offering sheltered stray animals better medical
care and resources
22 Mandarin Oriental International Limited
Task Force on Climate-Related Financial Disclosures (‘TCFD’)
Mandarin Oriental is aligning our climate-related disclosures with the Task Force on Climate-related Financial
Disclosures (‘TCFD’) framework. We embarked on our sustainability journey in 2007, the same year that global
warming was deemed unequivocal by the Intergovernmental Panel on Climate Change (‘IPCC’). Climate action is
a key area of our sustainability programme, Naturally Better, and the Company actively monitors and pursues action
to reduce greenhouse gas emissions associated with our business operations and beyond. In 2022, we conducted
a property-level sustainability risk assessment to further enhance our understanding of the physical and transition
risks of climate change on our portfolio and take action to safeguard our business against these risks.
Our disclosure is consistent with TCFD’s core recommendations with two areas pending further advancement –
scenario analysis and Scope 3 assessment. These areas are being taken into consideration for next steps and we aim
to incorporate these into our disclosure over the medium term. We also plan to consider the TCFD’s All Sector
Guidance for other disclosure areas in our subsequent reporting.
Governance
Board’s oversight of climate-related risks and opportunities
The Board has overall responsibility for overseeing climate-related risks and opportunities.
Progress updates on the Company’s sustainability performance, including key initiatives and progress against
relevant targets, are provided to the Board on a regular basis.
The Board delegates to the Audit Committee responsibility for overseeing risk management activities.
The Audit Committee reviews the operation and effectiveness of the Group’s internal control systems and
procedures by which risks, including climate-related risks, are monitored and managed.
Management’s role in assessing and managing climate-related risks and opportunities
The Company has a multi-tiered sustainability governance structure and a sustainability framework to assess
and manage climate and other sustainability-related issues holistically.
The Executive Advisory Panel (‘EAP’), led by the Group Chief Executive, defines key sustainability priorities
for the Company and provides both resources and mechanisms for accountability. The EAP facilitates the
integration of climate-related issues into operations. It meets at least once every quarter.
The Group Director of Sustainability, supported by the Sustainability Office, is responsible for mobilising and
coordinating the sustainability programme across the Company. This includes monitoring of sustainability
progress and verification of compliance toward commitments.
The Sustainability Leadership Council filters thematic priorities into workstreams and focussed action points to
be implemented by the Working Groups.
Working Groups and Task Forces, comprising Group and property-level colleagues, address specific
sustainability topics and challenges that are transversal across multiple departments respectively.
At every property, there is a Sustainability Champion supported by a Sustainability Committee that leverages
on Company-wide resources and tools to implement location-specific mitigation measures and initiatives.
A budget is reviewed and allocated for the execution of the Company’s sustainability strategy on an annual basis.
Performance against Company-wide sustainability targets, including greenhouse gas (‘GHG’) emission
reduction and renewable energy use, is reviewed by the EAP on a regular basis and disclosed in our annual
sustainability reports.
Sustainability performance is a component factored into the performance bonus of top management personnel,
including all hotel General Managers, to support and reinforce the successful execution of the Company’s
sustainability strategy.
23Annual Report 2022
Sustainability Continued
Strategy
Climate-related risks and opportunities identified over the short, medium and long-term
The tables below indicate a summary of key climate-related risks and opportunities identified. We use the following
time horizons:
Short term: Less than 3 years
Medium term: 3-7 years
Long term: More than 7 years
Summary of key climate-related risks
Category Risks Timeframe Impact
Transition Increased pricing of
GHG emissions
Short and
medium term
• Increased operational costs due to higher compliance costs
and increased insurance premiums
Physical – acute Increased severity of
extreme weather events
such as cyclones and floods
Short, medium
and long term
• Increased capital costs from damaged properties
• Reduced revenue from property closures and reduced
travel demand
• Increased insurance premiums
• Reduced revenue and higher costs from negative impacts
on workforce (e.g., health, safety, absenteeism)
Physical – chronic Changes in precipitation
patterns and extreme
variability in weather patterns
Long term • Increased insurance premiums
• Reduced availability of insurance in locations with high
physical climate risks
• Increased operational costs due to increased heating and
cooling needs, as well as increased water prices in locations
with high water scarcity
• Increased capital costs due to damage to facilities
• Reduced revenue from reduced travel demand
Summary of key climate-related opportunities
Category Opportunities Impact
Energy source / resilience Use of renewable energy and
adoption of efficiency measures
• Reduced exposure to future fossil fuel price increases
• Reduced exposure and sensitivity to changes in pricing
of GHG emissions
• Reduced operational costs from increased efficiency
of energy and water use
• Increased operational resilience under changing
climate conditions
Products and services Shift in consumer preferences
toward sustainable options
• Increased revenue through leadership position in sustainable
luxury hospitality
Resource efficiency Move towards highly efficient and
climate resilient buildings
• Reduced operating costs through efficiency gains
• Reduced costs from implementation of mitigation measures
against extreme weather events
• Increased market value of properties that are highly rated as
energy efficient and/or climate resilient
24 Mandarin Oriental International Limited
In 2022, we engaged a third-party consultant to conduct a sustainability risk assessment for our portfolio.
The assessment highlighted individual properties’ exposure to climate, water, biodiversity, socioeconomic and
sustainability-related regulatory risks. The climate risk assessment analysed acute (floods, droughts and cyclones)
and chronic (change in long term precipitation, temperature and sea level rise) physical climate risks, as well as
transition climate risks. The climate risks indicators evaluated were sea level rise, precipitation change, temperature
change, drought risk, flood risk, cyclone risk and relative market carbon intensity. Detailed results of this
assessment offer guidance toward taking targeted, location-specific actions to mitigate climate risks and capitalise
on related opportunities.
One significant climate-related risk for Mandarin Oriental is long-term temperature and precipitation change.
Nearly half of the portfolio (by floor area) is expected to face very high temperature increases by 2050, as compared
to 2010-2020 levels. For the same time horizon, 62% of the portfolio (by floor area) are vulnerable to very high
precipitation changes, typically reductions but some face increments. The impacts of these changes on properties,
buildings, operations and working conditions, as well as guest experience will be further researched and understood,
so that adaptive plans may be formulated and implemented if necessary.
In addition, six properties located in the Middle East and North Africa region were found to be at high water risk.
This is based on an analysis of various indicators including baseline water stress and 2030 projections for water
stress, demand and supply (per business-as-usual scenario). Understanding property-specific water risk levels allows
us to better prioritise investments and water stewardship initiatives to improve water efficiency, reuse and recycling.
We also explore the feasibility of decentralised water harvesting solutions such as installing desalination plants to
minimise our dependence on public water utilities and improve self-sufficiency.
Impact on businesses, strategy and financial planning
Impact on business and strategy
Mandarin Oriental seeks to be an innovative leader in luxury hospitality with the aim to maximise profitability and
long-term shareholder value. To deliver enduring value, it is important that we adapt our strategy in line with the
world’s shift toward carbon neutrality. Key actions that we are taking include:
Developing with sustainability in mind by implementing our Product Standards & Guidelines for
Responsible Hotel Development – a set of mandatory and recommended requirements to address sustainability
in design and construction.
Considering the use of Environmental Impact Assessments in the due diligence process prior to potential
developments.
Piloting energy modelling in the design phase to better gauge energy use and identify energy efficiency
opportunities.
Aligning with industry accreditation for sustainability and pursuing sustainable certificates in building
(e.g., Leadership in Energy and Environmental Design (‘LEED’)) and hotel operations (e.g., Global
Sustainable Tourism Council (‘GSTC’)).
Aiming to achieve the best possible environmental performance by pursuing differentiated 2030
Environmental Targets for energy, GHG emissions, water and waste based on the unique circumstances
and priorities of every property and its location.
25Annual Report 2022
Sustainability Continued
Impact on business and strategy continue d
Increasing renewable energy use through onsite renewable energy plants and procurement from certified
sources such as Renewable Energy Certificates (‘REC’s’) and Power Purchase Agreements (‘PPA’).
Performing sustainability risk assessments and adaptation action plans across the Company.
Testing and auditing Business Continuity Plans periodically.
Expanding investments in mitigation measures, including a robust insurance coverage.
Engaging staff and guests for feedback to improve sustainability program and sustainable offerings.
Promoting green transportation modes, including the use of Electric Vehicles (‘EV’) in transport fleets
and the provision of EV charging stations.
Procuring goods and services sustainably, such as using only sustainably certified paper products.
Identifying and harnessing opportunities to tap on sustainable finance in the implementation of
our sustainability strategy, such as efficiency projects.
Assessing emerging ESG reporting standards and requirements and aligning disclosures to best market practice.
Impact on financial planning
Operating Cost: Mandarin Oriental incorporates climate-related needs and other sustainability objectives into its
financial planning. In support of progress towards our 2030 Environmental Targets, a budget is allocated toward
the implementation of at least one efficiency initiative per hotel each year. These efficiency initiatives will need to
contribute to measurable improvements toward each hotel’s identified area of priority, which is informed by the
portfolio sustainability risk assessment conducted. Improving operational efficiencies will bring about reduced
operating costs and reduced exposure and sensitivity to changes in carbon tax rates.
Indirect Cost: We also invest in robust insurance plans and preventive maintenance to mitigate against climate
physical risks, especially in regions with higher risk of increased frequency and severity of extreme weather events.
Revenues: As the market shifts toward greater consumer preference for sustainability, we seek to maintain a
strong competitive position by continually improving our sustainability performance through our Naturally
Better programme. We also refine our sustainable offerings by conducting market research and incorporating
guest feedback.
Resilience of strategy, taking into account different scenarios, including a 2 degree celsius or lower scenario
We recognise that a significant shift is taking place as the world speeds up action toward carbon neutrality against
the backdrop of increasing climate change impacts. To stay on track with a Paris-aligned future where warming is
limited to well below 2 °C, transition risks are likely to be more significant in the near term while physical risks in
the long term will be less severe, as compared to a business-as-usual scenario.
In line with the policy ambition of the Paris Agreement, we expect to see increasingly stringent climate-related
regulations and carbon taxes, faster phase-out of fossil fuels and transition to clean renewable energy, a rise in rate
of adoption of electric vehicles and transition to net zero buildings, among others. To efficiently respond to climate
change, we will continue to review our risk assessments and Business Continuity Plans to ensure future resilience
of our business and strategy.
26 Mandarin Oriental International Limited
Risk management
Process for identifying and assessing climate-related risks
Hotels perform overall risk assessment at the property-level annually. As part of this assessment, the physical climate
risk of Mandarin Oriental’s key assets is evaluated based on the likelihood, financial and reputational impact, and
the speed at which the risk materialises, to then determine the inherent risk exposure in a scale. Transition risks are
also monitored by keeping abreast of key sustainability related policy changes for the locations that we operate in
mitigation measures have been in place to reduce the risk exposure for further monitoring at the residual level.
We will continue to refine our process to improve identification and assessment of climate-related risks.
Processes for managing climate-related risks
Mandarin Oriental aligns with the Risk Management Framework based on ISO 31000 and COSO principles to
identify, assess and define the strategies to monitor risks. The four steps in the framework are: risk identification,
risk assessment, risk treatment, and risk reporting and monitoring.
Risks are tolerated if within the Company’s risk appetite, and terminated such as through property disposal if
found to exceed risk appetite. Risks may be accepted if mitigated to an appropriate level. Mitigation measures for
climate-related risks include robust insurance plans that cover natural disasters, increased use of clean renewable
energy and implementation of energy and water efficiency initiatives, among others mentioned under the section
‘Impact on business and strategy’.
Integration into overall risk management
The Audit Committee requires that Mandarin Oriental’s business is conducted in accordance with the Group Risk
Management Policy. To supervise compliance and consolidate enforcement of this policy, we have a Group Risk
Management Committee (‘GRMC’) with the authority to ensure the Company’s risk management objectives are
met. Key committee members include the executive management from different functions, including Finance,
Operations, IT, Legal, Engineering, and the committee meets at least twice a year.
The Audit Committee considers the Company’s principal risks and uncertainties and potential changes to the risk
profile, reviews the operation and effectiveness of the Company’s internal control systems (financial, operational
and compliance) and the procedures by which these risks are monitored and mitigated. Regular risk identification
and analysis and the review of risk management processes are conducted through the Audit Committee. Climate
change has been included as one of the Company’s principal risks in the risk register and the Audit Committee
reports principal risks and uncertainties to the Board semi-annually.
27Annual Report 2022
Sustainability Continued
Metrics and targets
Metrics used
Mandarin Oriental uses the metric categories below as proxies for measuring climate-related risks and opportunities:
1. Total GHG Emissions
2. GHG Emissions Intensity
3. Percentage of Renewable Energy Use
2
4. Percentage of Portfolio in Regions with High/Very High Baseline Water Stress
GHG emissions
Mandarin Oriental’s GHG reporting scope covers all 34
*
hotels that were fully operational in 2022. More details
and further historical data can be found in our Sustainability Report online.
Greenhouse Gas Emissions
†
2022 Performance
Total GHG Emissions (metric tons CO
2
e) 191,605
Scope 1 Emissions (metric tons CO
2
e) 21,461
Scope 2 Emissions (metric tons CO
2
e) 170,144
GHG Emissions per square foot (kg CO
2
e) 146
* Properties excluded: Mandarin Oriental, Shenzhen and Mandarin Oriental Palace, Luzern (opened within 2022); Mandarin Oriental,
Washington D.C. (closed).
†
GHG emissions are based on market-based calculations. Currently we do not track Scope 3 emissions in line with current industry practices
for owned and managed properties.
Targets used and performance against targets
To assess and manage relevant climate-related risks and opportunities, Mandarin Oriental set the following 2030
Environmental Targets:
2030 Targets 2022 Achievement
50% carbon intensity reduction
3
30% reduction
15% renewable energy use 6%
2
Either produced onsite or procured
3
Baseline year 2012
28 Mandarin Oriental International Limited
Financial Review
amortisation (‘EBITDA’) to analyse operating
performance. In 2022, the Group achieved underlying
EBITDA of US$111 million. Underlying EBITDA,
by business activity, including the Group’s share of
underlying EBITDA from associates and joint ventures
is shown below:
2022
US$m
2021
US$m
Owned hotels
– Subsidiary hotels 45 26
– Associates and joint ventures
2
32 (2)
Management business 34 17
Underlying EBITDA 111 41
Owned hotels
Following the sale of Mandarin Oriental, Washington
D.C., the Group has an equity interest in 14 hotel
properties, which contribute a major proportion of the
Group’s results. In 2022, the owned hotels reported
EBITDA of US$77 million, much improved from the
reported EBITDA of US$24 million in 2021, driven
by robust recovery particularly in London, Bangkok
and Singapore.
EBITDA in 2022 included US$5 million of
government financial support and US$3 million of
other income primarily from insurance proceeds,
reduced from the US$41 million of government
financial support and US$9 million of other income
recognised in 2021.
Results
Overall
Travel conditions improved progressively through the
year in most parts of the world, which drove some
recovery in the Group’s financial performance. The
Group achieved an underlying profit for the first time
since 2019. In EMEA and America, travel restrictions
were relaxed from the first quarter onwards, and the
Group’s hotels benefitted from the resurgence in
demand for travel, particularly in the leisure segment.
In Asia, performance was varied across the region due
to differences in the timing of removal of pandemic
restrictions. Southeast Asian markets began lifting
restrictions from the second quarter onwards which
drove a robust recovery in performance. Greater
China’s performance was negatively impacted by
extensive border controls and government restrictions
which continued well into the fourth quarter.
Combined total revenue from all hotels under
management in 2022 was US$1,568 million,
49% higher than 2021, driven by recovery in demand
in regions which were no longer impacted by travel
restrictions. Combined total revenue was 18% higher
than 2019, as a result of strong demand and the
Group’s expanded portfolio of hotels and residences.
The Group’s consolidated revenue was US$454 million,
an improvement of 43% from 2021. All owned and
managed hotels, except those in Greater China,
delivered higher revenues. The Group uses underlying
1
earnings before interest, tax, depreciation, and
1
The Group uses ‘underlying profit/loss’ in its internal financial reporting to distinguish between ongoing business performance and
non-trading items, as more fully described in note 33 to the financial statements. Management considers this to be a key measure which
provides additional information to enhance understanding of the Group’s underlying business performance.
2
Associates and joint ventures include contributions from Stay One Degree Limited, an online booking service platform for luxury homes
and Chaophaya Development Corporation Limited, part of the River City Shopping Complex in Bangkok.
29Annual Report 2022
Financial Review Continued
Subsidiary hotels
The Group’s results from its subsidiary hotels were
as follows:
2022
US$m
2021
US$m
Revenue 401 279
Underlying EBITDA from
subsidiary hotels 45 26
Less: depreciation and amortisation (49) (60)
Underlying operating loss (4) (34)
Less: net financing charges (12) (11)
tax (1) (5)
Underlying loss attributable
to shareholders (17) (50)
In 2022, subsidiary hotels reported revenue of
US$401 million and EBITDA of US$45 million,
compared to revenue of US$279 million and EBITDA
of US$26 million in 2021.
The Group’s European hotels contributed the majority
of the subsidiary hotels’ revenue and EBITDA, driven
by the strong demand for travel to the region. Key cities
such as London and Paris delivered robust performance
with higher revenues than 2021 and exceeded pre-
pandemic business levels in 2019. In Asia, Hong Kong
and Tokyo remained subject to travel restrictions for the
vast majority of the year which hampered any recovery
in performance from these hotels.
Owned hotels’ depreciation and amortisation, which
is a non-cash item, was lower than 2021. Net financing
charges were slightly higher than 2021 due to changes
in interest rates in the period. Tax for 2022 was
US$1 million, compared to US$5 million in 2021.
Overall, the subsidiary hotels delivered a US$17 million
underlying loss, predominantly driven by Hong Kong
and Tokyo with subdued operating profitability.
Collectively, other subsidiary hotels recorded an
underlying profit, resulting in a significant improvement
from the US$50 million underlying loss in 2021.
Associates and joint ventures
The Group’s share of results from associates and joint
ventures was as follows:
2022
US$m
2021
US$m
Underlying EBITDA from associates
and joint ventures 32 (2)
Less: depreciation and amortisation (16) (15)
Underlying operating profit/(loss) 16 (17)
Less: net financing charges (5) (5)
tax (1) –
Share of results of associates
and joint ventures 10 (22)
All associate and joint venture hotels achieved higher
revenue and EBITDA in 2022 compared to 2021.
Singapore and Bangkok achieved robust EBITDA
performance in the fourth quarter once travel
restrictions had been removed and the hotels entered
peak season. Hotels in New York and Miami also
achieved a strong recovery in performance, delivering
EBITDA in excess of pre-pandemic levels in 2019.
The Group’s share of results of associates and joint
ventures was US$10 million, compared to a loss of
US$22 million in 2021, driven by the improved
operating performance of those hotels.
Management business
2022
US$m
2021
US$m
Revenue* 68 48
Underlying EBITDA from
management business 34 17
Less: depreciation and amortisation (9) (9)
Underlying operating profit 25 8
Less: net financing charges – (1)
tax (8) (2)
Underlying profit attributable
to shareholders 17 5
* Include management fees from subsidiary hotels.
Revenue in the management business consists of
hotel and residences management fees, and residences
branding fees. The long-term growth of management
business remains a strategic focus for the Group, and it
achieved a robust improvement in profitability in 2022
compared to 2021.
30 Mandarin Oriental International Limited
Total hotel management fees of US$60 million in 2022
were increased by 57% from 2021, as the revenues of
the hotels within the portfolio improved. In Greater
China, operating and financial performance was
challenged by the suppressed domestic travel demand
and restrictions on international travel, hence
contributing lower management fees.
Residences branding fees are generally earned when
individual residences are sold, or certain development
milestones are achieved. This year the Group opened
two new residences in Beverly Hills and Barcelona,
however total fees were lower than 2021 due to the
timing of sales of new projects.
Included in the management business is the cost of
the Group’s central sales and marketing and brand
activities, which are funded by marketing and
advertising contributions from hotels based on a
percentage of hotel revenues.
In 2022, the management business, including two
new managed hotels in Shenzhen and Lucerne,
reported underlying EBITDA of US$34 million,
doubled the US$17 million reported in 2021.
Underlying earnings attributable to shareholders
The underlying profit attributable to shareholders is
as follows:
2022
US$m
2021
US$m
Subsidiary hotels (17) (50)
Share of results of associates and
joint ventures 10 (22)
Management business 17 5
Property development (2) (1)
Total underlying profit/(loss)
attributable to shareholders 8 (68)
In 2022, the Group achieved an underlying profit of
US$8 million, a strong improvement from 2021 and
the first profit since 2019.
Non-trading items
2022
US$m
2021
US$m
Changes in fair value of investment
property under development (104) (74)
Gain on asset disposals 47 –
Changes in fair value of
other investments – 1
Total (57) (73)
A net non-trading loss of US$57 million was recorded
in 2022, mainly due to a 3% decrease (US$104 million)
in the fair market value of the Causeway Bay site under
development, valued at US$2.4 billion at the end of
2022. This loss was partially offset by the net gain
of US$47 million after tax on the sale of the hotel in
Washington D.C., completed in September 2022.
In 2021, a non-trading loss of US$73 million was
recognised also primarily in relation to the Causeway
Bay site under development, which represented
a 3% decrease in the valuation of the site from
US$2.5 billion at the end of 2020.
Cash flow
The Group’s consolidated cash flows are summarised
as follows:
2022
US$m
2021
US$m
Operating activities 56 26
Investing activities
Capital expenditure on
existing properties (13) (15)
Redevelopment of the Causeway
Bay site (30) (20)
Net proceeds from asset disposals 131 –
Others (1) 3
Financing activities
Net (repayment)/drawdown
of borrowings (116) 64
Other (6) (3)
Net increase in cash 21 55
Cash and cash equivalents
at 1st January 213 165
Effect of exchange rate changes (8) (7)
Cash and cash equivalents
at 31st December 226 213
Gross debt at 31st December (602) (730)
Closing net debt at 31st December (376) (517)
31Annual Report 2022
Financial Review Continued
The Group’s cash inflows from operating activities were
US$56 million in 2022, better than the US$26 million
in 2021, driven by the improved profitability from
owned hotels and higher fee income received by the
management business.
In investing activities, the Group generated net cash
inflows due to the sale of Washington D.C. for
US$131 million. This was partially offset by
US$30 million invested into the Causeway Bay site
under development. The Group is committed to
investing another US$500 million to the project
from 2023 to 2025, which will be funded through
a mix of external debt and existing cash reserves.
Capital expenditure on existing hotel properties was
US$13 million, the majority of which was for the
renovation in the Geneva hotel.
Dividends
While trading conditions gradually improved in 2022,
the Group’s overall performance remained significantly
below pre-pandemic levels and the Group returned
only to modest profitability. As such, no dividends
in respect of 2022 have been proposed or declared by
the Board.
Treasury activities
The Group manages its exposure to financial risk using
a variety of techniques and instruments. The main
objective is to manage foreign exchange and interest
rate risks and to provide a degree of certainty in respect
of costs. At the end of 2022, the Group had fixed or
capped interest rates on 45% of its gross borrowings.
In respect of specific hotel financing, borrowings
are normally taken in local currency to hedge
partially the investment and the projected income.
At 31st December 2022, the Group’s net assets were
denominated in the following currencies:
Shareholders’ funds/
net assets
Adjusted
shareholders’ funds/
net assets*
US$m % US$m %
Hong Kong dollar 2,208 67 3,118 63
Euro 502 15 704 16
United States dollar 227 7 293 5
United Kingdom Sterling 184 6 349 8
Singapore dollar 70 2 240 4
Thai baht 12 – 77 1
Swiss franc 58 2 58 1
Indonesian rupiah 6 – 25 1
Others 27 1 33 1
Total 3,294 100 4,897 100
* See supplementary information section below.
The Group, excluding associates and joint ventures,
had committed borrowing facilities totalling
US$1,073 million, of which US$602 million was
drawn at 31st December 2022. The principal amounts
due for repayment are as follows:
Facilities
committed
US$m
Facilities
drawn
US$m
Unused
facilities
US$m
Within one year 2 2 –
Between one and two years 750 600 150
Between two and three years 321 – 321
Between three and four years – – –
Between four and five years – – –
Beyond five years – – –
Total 1,073 602 471
32 Mandarin Oriental International Limited
At 31st December 2022, consolidated net debt was
US$376 million, and gearing was 11%, lower than
consolidated net debt of US$517 million and gearing
of 16% at 31st December 2021. Reduced net debt was
primarily driven by the proceeds from the sale of
Mandarin Oriental, Washington D.C. (US$131 million)
and improved operating cash inflows, partially offset by
investment in the Causeway Bay site under development
as well as ongoing hotel capital expenditure. Taking
into account the fair market value of the Group’s
freehold and leasehold interests (which are accounted
for at historical cost less depreciation) gearing was 8%
of adjusted shareholders’ funds at 31st December 2022,
lower than the prior year at 10%.
The Group’s liquidity remains robust with
US$471 million of committed, undrawn facilities
in addition to its cash balances of US$226 million.
The average tenor of the Group’s borrowings was
1.8 years compared to 2.1 years in 2021.
Interest cover
EBITDA is used as an indicator of the Group’s
ability to service debt and finance its future capital
expenditure, although there are no cash-based
covenants in the Group’s debt facilities. Interest cover
3
in 2022 was 4.9 times, higher than 2.0 times in 2021.
Supplementary information
Although the Group’s accounting policy in respect
of its freehold land and buildings and the building
component of owner-occupied leasehold properties
is based on the cost model, the Directors continue
to review on an annual basis the fair market values
in conjunction with independent appraisers. The fair
market value of both freehold and leasehold land and
buildings is used by the Group to calculate adjusted
net assets, which the Directors believe gives important
supplementary information regarding net asset value
per share and gearing as shown in the table below.
The decrease in 2022 adjusted shareholders’ funds
was primarily due to the total loss attributable to
shareholders of US$49 million, mainly due to the 3%
decrease in valuation of the Causeway Bay site under
development, partially offset by the net gain on sale of
the hotel in Washington D.C.
2022 2021
US$m
Per share
US$ US$m
Per share
US$
Shareholders’ funds/
net assets
3,294 2.61 3,309 2.62
Add: surplus for fair
market value of
freehold and leasehold
land and buildings
1,603 1.26 1,657 1.31
Adjusted shareholders’
funds/net assets
4,897 3.87 4,966 3.93
Principal risks and uncertainties
A review of the principal risks and uncertainties facing
the Group is set out on pages 130 to 136.
Accounting policies
The Directors continue to review the developments
in International Financial Reporting Standards and
their impact on the Group’s accounting policies.
The accounting policies adopted are consistent with
those of the previous year, except that the Group
has adopted the Amendments to IAS 37 – Onerous
Contracts – Cost of fulfilling a Contract. This is
more fully detailed in the note 1 ‘Basis of preparation’
in the financial statements. The adoption of the
amendments does not have a material effect on the
financial statements.
Matthew Bishop
Chief Financial Officer
2nd March 2023
3
Interest cover is calculated as underlying EBITDA (including the Group’s share of underlying EBITDA from associates and joint ventures)
before the deduction of amortisation/depreciation of right-of-use assets and net of actual lease payments, divided by net financing charges
(including the Group’s share of net financing charges from associates and joint ventures) before the deduction of capitalised interest and
excluding interest on lease liabilities.
33Annual Report 2022
Ben Keswick Chairman
Ben Keswick joined the Board as Managing Director
in April 2012 and held the position until June 2020.
He has been Chairman since 2013. He was also
managing director of Jardine Matheson from 2012
to 2020. He has held a number of executive positions
since joining the Jardine Matheson group in 1998,
including finance director and then chief executive
officer of Jardine Pacific between 2003 and 2007,
and group managing director of Jardine Cycle &
Carriage until March 2012. He is executive chairman
of Jardine Matheson and chairman of DFI Retail
Group, Hongkong Land. He is also chairman of
Jardine Cycle & Carriage and a commissioner of
Astra. He is a director of Yonghui Superstores and
held the position of chairman between 2018 and 2020.
He has an MBA from INSEAD.
John Witt
*
Managing Director
John Witt rejoined the Board as Managing Director
in June 2020, having previously served as the Chief
Financial Officer between 2000 and 2010. He has been
with the Jardine Matheson group since 1993 and has
held a number of senior finance positions, including
group finance director of Jardine Matheson from 2016
to 2020 and the chief financial officer of Hongkong
Land. John is chairman of Jardine Matheson Limited,
group managing director of Jardine Matheson and
managing director of DFI Retail Group and Hongkong
Land. He is also a director of Jardine Pacific and
Jardine Motors, as well as a commissioner and
chairman of the executive committee of Astra.
John is a Chartered Accountant and has an MBA
from INSEAD.
James Riley
*
Group Chief Executive
James Riley joined the Board as Group Chief Executive
in 2016. He has previously held a number of senior
executive positions in the Jardine Matheson group
since joining from Kleinwort Benson in 1993.
A Chartered Accountant, he was group finance
director of Jardine Matheson from 2005 to 2016.
He has been a director of Mandarin Oriental Hotel
Group International Limited since 2005. He was
a non-executive director of the Hongkong and
Shanghai Banking Corporation from 2012 to 2016.
Matthew Bishop
*
Chief Financial Officer
Matthew Bishop joined the Board as Chief Financial
Officer in 2021. A Chartered Accountant, he joined
the Jardine Matheson group in 2009 and held a
number of senior finance positions across the group,
including most recently group treasurer of Jardine
Matheson since January 2019. He was previously a
diplomat with the Foreign & Commonwealth Office
in Beijing and London.
Jinqing Cai
Jinqing Cai joined the Board in 2021. She is the
president, Greater China at Kering, a member of
international advisory board of the New York
Philharmonic Orchestra and a board member of
Teach for China. Jinqing was former president and
chairman of Christie’s China.
* Executive Director
Directors’ Profiles
34 Mandarin Oriental International Limited
Adam Keswick
Adam Keswick joined the Board in 2012. Having
joined Jardine Matheson in 2001, he was appointed to
the Jardine Matheson board in 2007 and was deputy
managing director from 2012 to 2016. Adam is a
director of DFI Retail Group and Hongkong Land.
He is also a director of Ferrari NV, Schindler and
Yabuli China Entrepreneurs Forum and vice chairman
of the supervisory board of Rothschild & Co.
Archie Keswick
Archie Keswick joined the Board in 2019. Having
joined the Jardine Matheson group in 2007, he held a
number of senior executive positions within the group,
including most recently CEO, Pizza Hut Vietnam and
the general manager of The Landmark Mandarin
Oriental, Hong Kong.
Y.K. Pang
Y.K. Pang joined the Board in 2016. He is deputy
managing director and chairman of Hong Kong of
Jardine Matheson, and chairman of Jardine Pacific.
He has held a number of senior executive positions in
the Jardine Matheson group, which he joined in 1984,
including chief executive of Hongkong Land between
2007 and 2016. Y.K. is also deputy chairman of
Jardine Matheson Limited, and a director of Gammon,
Hongkong Land, Jardine Matheson (China) and
Greatview. He is chairman of the Hong Kong Tourism
Board and the Hong Kong Management Association,
and a member of the Council and General Committee
of the Hong Kong General Chamber of Commerce
and the Employers’ Federation of Hong Kong.
Richard Solomons
Richard Solomons joined the Board in 2021. He is the
Chairman of the Audit Committee of the Company.
He is the non-executive chairman of Rentokil Initial
plc and Hotelbeds Group S.L.U, as well as a member
of the advisory committee of Hotelbeds Group S.L.U.
Richard was previously the chief executive officer of
InterContinental Hotels Group plc and a non-executive
director of Aston Martin Lagonda Global Holdings plc
and Marks and Spencer Group plc.
35Annual Report 2022
for the year ended 31st December 2022
Consolidated Profit and Loss Account
2022 | 2021 | ||||||
| Underlying | Underlying | ||||||
| business | Non-trading | business | Non-trading | ||||
| performance | items | Total | performance | items | Total | ||
| Note | US$m | US$m | US$m | US$m | US$m | US$m | |
Revenue | 2 | ||||||
Cost of sales | ( | ( | ( | ( | |||
Gross profit | |||||||
Selling and distribution costs | ( | ( | ( | ( | |||
Administration expenses | ( | ( | ( | ( | |||
Other operating income | |||||||
| Change in fair value of investment | |||||||
property under development | 12 | ( | ( | ( | ( | ||
Gain on asset disposals | 8 | ||||||
Operating (loss)/profit | 3 | ( | ( | ( | ( | ( | |
Financing charges | ( | ( | ( | ( | |||
Interest income | |||||||
Net financing charges | 4 | ( | ( | ( | ( | ||
| Share of results of associates | |||||||
and joint ventures | 5 | ( | ( | ||||
(Loss)/profit before tax | ( | ( | ( | ( | ( | ||
Tax | 6 | ( | ( | ( | ( | ||
(Loss)/profit after tax | ( | ( | ( | ( | ( | ||
| Attributable to: | |||||||
Shareholders of the Company | 7&8 | ( | ( | ( | ( | ( | |
Non-controlling interests | |||||||
( | ( | ( | ( | ( | |||
US¢ | US¢ | US¢ | US¢ | ||||
(Loss)/earnings per share | 7 | ||||||
– basic | ( | ( | ( | ||||
– diluted | ( | ( | ( |
36 Mandarin Oriental International Limited
| 2022 | 2021 | ||
| Note | US$m | US$m | |
Loss for the year | ( | ( | |
| Other comprehensive (expense)/income | |||
| Items that will not be reclassified to profit or loss: | |||
Remeasurements of defined benefit plans | 16 | ( | |
Revaluation surplus of right-of-use assets before transfer to investment properties | 11 | ||
Tax on items that will not be reclassified | 6 | ( | |
| Items that may be reclassified subsequently to profit or loss: | |||
| Net exchange translation differences | |||
– net losses arising during the year | ( | ( | |
| Cash flow hedges | |||
– net gains arising during the year | |||
Tax relating to items that may be reclassified | 6 | ( | ( |
Share of other comprehensive income/(expense) of associates and joint ventures | ( | ||
( | ( | ||
Other comprehensive income/(expense) for the year, net of tax | ( | ||
Total comprehensive expense for the year | ( | ( | |
| Attributable to: | |||
Shareholders of the Company | ( | ( | |
Non-controlling interests | ( | ||
( | ( |
for the year ended 31st December 2022
Consolidated Statement of Comprehensive Income
37Annual Report 2022
at 31st December 2022
Consolidated Balance Sheet
| 2022 | 2021 | ||
| Note | US$m | US$m | |
| Net assets | |||
Intangible assets | 9 | ||
Tangible assets | 10 | ||
Right-of-use assets | 11 | ||
Investment properties | 12 | ||
Associates and joint ventures | 13 | ||
Other investments | 14 | ||
Deferred tax assets | 15 | ||
Pension assets | 16 | ||
Non-current debtors | 17 | ||
Non-current assets | |||
Stocks | |||
Current debtors | 17 | ||
Current tax assets | |||
Bank and cash balances | 18 | ||
Current assets | |||
Current creditors | 19 | ( | ( |
Current borrowings | 20 | ( | ( |
Current lease liabilities | 21 | ( | ( |
Current tax liabilities | ( | ( | |
Current liabilities | ( | ( | |
Net current assets | |||
Long-term borrowings | 20 | ( | ( |
Non-current lease liabilities | 21 | ( | ( |
Deferred tax liabilities | 15 | ( | ( |
Pension liabilities | 16 | ( | ( |
Non-current creditors | 19 | ( | ( |
Non-current liabilities | ( | ( | |
| Total equity | |||
Share capital | 23 | ||
Share premium | 24 | ||
Revenue and other reserves | |||
Shareholders’ funds | |||
Non-controlling interests | |||
Approved by the Board of Directors
James Riley
Matthew Bishop
Directors
2nd March 2023
38 Mandarin Oriental International Limited
for the year ended 31st December 2022
Consolidated Statement of Changes in Equity
| Asset | Attributable to | Attributable to | Total | |||||||
| Share | Share | Capital | Revenue | revaluation | Hedging | Exchange | shareholders of | non-controlling | equity | |
| capital | premium | reserves | reserves | reserves | reserves | reserves | the Company | interests | ||
| US$m | US$m | US$m | US$m | US$m | US$m | US$m | US$m | US$m | US$m | |
| 2022 | ||||||||||
At 1st January | ( | ( | ||||||||
Total comprehensive income | ( | ( | ( | ( | ||||||
Transfer | ( | |||||||||
At 31st December | ( | ( | ||||||||
| 2021 | ||||||||||
At 1st January | ( | ( | ( | |||||||
Total comprehensive income | ( | ( | ( | ( | ( | |||||
Transfer | ( | |||||||||
At 31st December | ( | ( | ||||||||
Revenue reserves as at 31st December 2022 included cumulative fair value losses on the investment property under
development of US$720.2 million (2021: US$616.1 million).
39Annual Report 2022
for the year ended 31st December 2022
Consolidated Cash Flow Statement
| 2022 | 2021 | ||
| Note | US$m | US$m | |
| Operating activities | |||
Operating loss | 3 | ( | ( |
Depreciation, amortisation and impairment | |||
Other non-cash items | 27a | ||
Movements in working capital | 27b | ( | |
Interest received | |||
Interest and other financing charges paid | ( | ( | |
Tax paid | ( | ( | |
Cash flows from operating activities | |||
| Investing activities | |||
Purchase of tangible assets | ( | ( | |
Additions to investment property under development | ( | ( | |
Purchase of intangible assets | ( | ( | |
Additions to right-of-use assets | ( | ||
Refund on Munich expansion | 27c | ||
Purchase of other investments | ( | ( | |
Purchase of an associate | 27d | ( | |
Advance to associates and joint ventures | 27e | ( | ( |
Repayment of loans to associates and joint ventures | 27f | ||
Net proceeds from asset disposals | 8 | ||
Cash flows from investing activities | ( | ||
| Financing activities | |||
Drawdown of borrowings | 20 | ||
Repayment of borrowings | 20 | ( | ( |
Principal elements of lease payments | 27g | ( | ( |
Cash flows from financing activities | ( | ||
Net increase in cash and cash equivalents | |||
Cash and cash equivalents at 1st January | |||
Effect of exchange rate changes | ( | ( | |
Cash and cash equivalents at 31st December | 27h |
40 Mandarin Oriental International Limited
Notes to the Financial Statements
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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Notes to the Financial Statements Continued
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32 Principal subsidiaries, associates, joint ventures and managed hotels
The principal subsidiaries, associates, joint ventures and managed hotels of the Group at 31st December 2022 are set out below.
Principal place
of business Name of entity Nature of business
% Hotel profile 2022 2021
Subsidiaries
Hong Kong Mandarin Oriental Hotel Group International Limited Management 100 100 100 – –
Hong Kong Mandarin Oriental Hotel Group Limited Management 100 100 100 – –
Hong Kong Mandarin Oriental, Hong Kong Limited Owner: Mandarin Oriental, Hong Kong 100 100 100 – 494 rooms. Lease expiry 2895
Hong Kong Excelsior Hotel (BVI) Limited The Causeway Bay site under development 100 100 100 – –
Japan Mandarin Oriental Tokyo KK Owner: Mandarin Oriental, Tokyo 100 100 100 – 179 rooms. Lease expiry 2050
Indonesia P.T. Jaya Mandarin Agung Owner: Mandarin Oriental, Jakarta 96.9 96.9 96.9 3.1 272 rooms. Lease expiry 2053
United Kingdom Mandarin Oriental Hyde Park Limited Owner: Mandarin Oriental Hyde Park, London 100 100 100 – 181 rooms. Freehold
Switzerland Société Immobilière de Mandarin Oriental (Genèva) SA Owner: Mandarin Oriental, Geneva 85.3 85.3 85.3 14.7 Lease expiry 2040
Switzerland Société pour l’ Exploitation de Mandarin Oriental (Genèva) SA 100 100 100 – 178 rooms
Germany Dinavest International Holdings B.V. Owner: Mandarin Oriental, Munich 100 100 100 – 73 rooms. Freehold
France MOHG Hotel (Paris) Sarl Owner: Mandarin Oriental, Paris 100 100 100 – 135 rooms. Freehold
United States Boylston Street Hotel LLC Owner: Mandarin Oriental, Boston 100 100 100 – 148 rooms. Freehold
Associates and joint ventures
Singapore Marina Bay Hotel Private Limited Owner: Mandarin Oriental, Singapore 50 50 50 50 527 rooms. Lease expiry 2079
Thailand OHTL PCL Owner: Mandarin Oriental, Bangkok 47.6 47.6 47.6 52.4 331 rooms. Various freehold/lease hold
Malaysia Asas Klasik Sdn Bhd Owner: Mandarin Oriental, Kuala Lumpur 25 25 25 75 629 rooms. Freehold
Thailand Chaophaya Development Corporation Limited Owner: River City Shopping Complex 49 49 49 51 –
Spain Ritz Madrid, S.A. Owner: Mandarin Oriental Ritz, Madrid 50 50 50 50 153 rooms. Freehold
United States ICD Columbus Centre Hotel LLC Owner: Mandarin Oriental, New York 25.1 25.1 25.1 74.9 244 rooms. Freehold
United States Swire Brickell Key Hotel Limited Owner: Mandarin Oriental, Miami 25 25 25 75 326 rooms. Freehold
Hong Kong Stay One Degree Limited Online booking service platform for luxury homes 22.4 16.7 22.4 77.6 –
Managed hotels
Hong Kong The Landmark Mandarin Oriental, Hong Kong – – – – 111 rooms
Macau Mandarin Oriental, Macau – – – – 213 rooms
China Mandarin Oriental, Sanya – – – – 278 rooms
China Mandarin Oriental, Guangzhou – – – – 263 rooms
China Mandarin Oriental Pudong, Shanghai – – – – 362 rooms
China Mandarin Oriental Wangfujing, Beijing – – – – 73 rooms
China Mandarin Oriental, Shenzhen – – – – 178 rooms
Taiwan Mandarin Oriental, Taipei – – – – 295 rooms
Czech Republic Mandarin Oriental, Prague – – – – 99 rooms
Spain Mandarin Oriental, Barcelona – – – – 120 rooms
Turkey Mandarin Oriental, Bodrum – – – – 132 rooms
Turkey Mandarin Oriental Bosphorus, Istanbul – – – – 86 rooms
Switzerland Mandarin Oriental Palace, Luzern – – – – 136 rooms
Italy Mandarin Oriental, Milan – – – – 104 rooms
Italy Mandarin Oriental, Lago di Como – – – – 75 rooms
Morocco Mandarin Oriental, Marrakech – – – – 63 rooms
Qatar Mandarin Oriental, Doha – – – – 249 rooms
United Arab Emirates Mandarin Oriental Jumeira, Dubai – – – – 251 rooms
United Arab Emirates Emirates Palace Mandarin Oriental, Abu Dhabi – – – – 390 rooms
Saudi Arabia Al Faisaliah Hotel, Riyadh – – – – 325 rooms
Chile Mandarin Oriental, Santiago – – – – 310 rooms
Saint Vincent and
the Grenadines Mandarin Oriental, Canouan – – – – 35 rooms
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To the members of Mandarin Oriental International Limited
Report on the audit of the Group financial statements
Opinion
In our opinion, Mandarin Oriental International Limited’s Group (the ‘Group’) financial statements
(the ‘financial statements’):
give a true and fair view of the state of the Group’s affairs as at 31st December 2022 and of its loss and cash flows
for the year then ended;
have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by
the International Accounting Standards Board (IASB); and
have been prepared in accordance with the requirements of the Companies Act 1981 (Bermuda).
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated
Balance Sheet as at 31st December 2022; the Consolidated Profit and Loss Account, the Consolidated Statement
of Comprehensive Income, the Consolidated Cash Flow Statement, the Consolidated Statement of Changes in
Equity for the year then ended; and the Notes to the financial statements, which include a description of the significant
accounting policies (the ‘Principal Accounting Policies’).
Certain required disclosures have been presented in the Corporate Governance section, rather than in the Notes to the
financial statements. These disclosures are cross-referenced from the financial statements and are identified as audited.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law.
Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, which includes the Financial Reporting Council’s (‘FRC’s’) Ethical Standard, as
applicable to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Our audit approach
Overview
Materiality
Overall Group materiality: US$32.9 million (2021: US$3.0 million), based on 1% of the net assets of the Group
(2021: based on 5% of underlying loss before tax).
Specific Group materiality, applied to balances and transactions not related to the investment properties:
US$3.4 million, based on 0.75% of the Group’s consolidated revenue (2021: no specific Group materiality
was applied).
Audit scope
A full scope audit of seven of the Group’s hotels and two entities engaged in hotel management services and holding
the investment property under development was performed. These hotels and entities, together with procedures
performed over specific balances and transactions for one further hotel, one further entity engaged in hotel
management services and on central functions and at the Group level, accounted for 89% of the Group’s revenue,
93% of the Group’s loss before tax, 84% of the Group’s underlying profit before tax and 89% of the Group’s
total assets.
Independent Auditors’ Report
98 Mandarin Oriental International Limited
Key audit matters
Valuation of investment properties
Recoverability of the carrying amounts of hotel properties
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the Directors made subjective judgements, for example in respect of
significant accounting estimates that involved making assumptions and considering future events that are inherently
uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including
evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to
fraud.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit
of the financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any
comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The Impact of COVID-19, which was a key audit matter last year, is no longer included because the impact, where
relevant, is now included within the other individual key audit matters as appropriate. The key audit matter last year in
respect of the valuation of investment property under development has been revised to include both the investment
property under development and the completed residential property which is now accounted for as an investment
property. The key audit matter in respect of the recoverability of the carrying amounts of hotel properties is consistent
with last year.
Key audit matter
Valuation of investment properties
Refer to note 33 (Principal accounting policies),
note 36 (Critical accounting estimates and
judgements) and note 12 (Investment properties)
to the financial statements.
The fair value of the Group’s investment properties
amounted to US$2,472.6 million at 31st December 2022,
with a revaluation loss of US$104.1 million recognised
as a non-trading item in the Consolidated Profit and Loss
Account for the year. The Group’s investment properties
consist of an under development leasehold commercial
property and a completed leasehold residential property.
The valuation of the Group’s investment properties
is inherently subjective due to, among other factors,
the individual nature of each property, its location,
prevailing market returns and expected future rentals,
where relevant.
How our audit addressed the key audit matter
We understood management’s controls and processes for
determining the valuation of investment properties and
assessed the inherent risk of material misstatement by
considering the degree of estimation uncertainty and
the judgement involved in determining assumptions to
be applied.
We assessed the qualification and expertise of the valuer,
considering whether there were any matters that might
have affected their objectivity or may have imposed
scope limitations upon its work. We found no evidence
to suggest that the objectivity of the valuers in their
performance of the valuations was compromised.
We read the valuation reports to consider whether the
valuation methodology used was appropriate and suitable
for use in determining the fair values.
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Independent Auditors’ Report Continued
Key audit matter
Valuation of investment properties continued
The valuations were carried out by a third-party valuer
(the ‘valuer’).
There is inherent estimation uncertainty and judgement
in determining a property’s valuation as the valuer makes
assumptions in key areas.
The valuation for the under development leasehold
commercial property was derived using the direct
comparison method and residual method. Judgement
is required in selecting appropriate land sale comparable
transactions for the direct comparison method valuation;
and the determination of the gross development value,
estimated costs to complete and expected developer’s
profit margin in the residual method valuation.
The valuation for the completed leasehold residential
property was derived using the direct comparison method.
We focused on the valuation of investment properties
due to the size of the balance and the significant
judgements and estimates involved in determining
the valuations.
How our audit addressed the key audit matter
The audit team, including our valuation experts,
discussed with the valuer the methodology, key
assumptions and climate change risk considerations
applied in the valuations, including:
for the direct comparison method valuations, we
assessed the appropriateness of the comparable
transactions adopted in the valuations;
for the residual method valuation:
– we assessed the appropriateness of the key
assumptions adopted in the assessment of the gross
development value by comparing them with
available market data on yields and unit rentals;
– for developer’s profit and other ancillary fees,
compared the adopted parameters with the market
norm; and
– for the construction costs to complete, examined
the approved project budget, and evaluated past
budget to actual variance to assess the reliability of
the project budget.
We concluded that the methodology used in preparing
the valuations was acceptable and that the key
assumptions applied in the valuations were supportable
in light of available evidence.
With the support of our internal valuation experts,
we also questioned the external valuer as to the extent
that valuations took into account climate change and
related ESG considerations.
100 Mandarin Oriental International Limited
Key audit matter
Recoverability of the carrying amounts of hotel properties
Refer to note 33 (Principal accounting policies),
note 36 (Critical accounting estimates and judgements),
note 10 (Tangible assets), note 11 (Right-of-use assets)
and note 13 (Associates and joint ventures) to the
financial statements.
The Group’s hotel properties are stated at cost less
depreciation and impairment, and represent a significant
proportion of tangible assets and right-of-use assets
and associates and joint ventures.
Management considers each hotel to be a separate
cash-generating unit (‘CGU’) and performs an
impairment assessment, where impairment indicators
exist, to determine the recoverable amount of the hotel
properties. The recoverable amount is determined as
the higher of the CGU’s value-in-use and fair value less
costs to sell. In determining the fair value less costs to
sell, a third-party valuer (the ‘valuer’) is engaged by the
Group to perform the valuation of the hotel property.
Management concluded that no impairment provision
was required for the hotel properties.
We focused on this area as the impairment assessment
involves significant judgements and estimation
uncertainty in respect of future business performance
and key assumptions including discount rates, occupancy
rate, sales growth rate and capital expenditure necessary
to maintain the service standard.
How our audit addressed the key audit matter
We assessed the inherent risk of material misstatement
by considering the degree of estimation uncertainty and
the judgement involved in determining assumptions to
be applied.
We understood management’s impairment assessment
process and related controls, including the identification
of indicators of impairment and appropriateness of
the valuation models used, including the assessment
of the future recovery of markets from the impact of
COVID-19 and inspection of the operating results
of the respective hotels.
Where there were indicators of impairment, we assessed
the assumptions used by the valuer and management in
the calculation of the recoverable amounts. This included
the involvement of our valuation experts to assess the
country specific discount rate applied. We assessed the
reasonableness of the forecast occupancy rates, sales
growth rate and capital expenditure by comparing
them with historical results and latest economic and
industry forecasts.
We evaluated management’s future cash flow forecasts
and the process by which they were prepared, including
testing the mathematical accuracy of the underlying
calculations and compared the future cash flow forecasts
with the Board approved budgets.
We performed sensitivity analyses by making
adjustments to the key assumptions in management’s
impairment assessments and considered whether, in
isolation or as a combination, any reasonably possible
adjustments would result in a material impairment.
We found that the methodologies were applied consistently
and appropriately, and the significant assumptions
adopted by management were appropriate.
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How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the
industry in which it operates.
The Group’s accounting processes are structured around finance functions, which are responsible for their own
accounting records and controls, which in turn, report financial information to the Group’s finance function in
Hong Kong to enable them to prepare consolidated financial statements.
In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed
by members of the Group engagement team or by component auditors from member firms within the PwC Network
operating under our instruction. Where the work was performed by component auditors, we determined the level of
involvement necessary for us to have in the audit work at those components to be able to conclude whether sufficient,
appropriate audit evidence had been obtained as a basis for our opinion on the financial statements as a whole. The Group
engagement team was involved in the significant reporting entities in scope for Group reporting during the audit cycle
through a combination of meetings, visits and conference calls. The Group audit partner and other senior team members
undertook two visits to Hong Kong and were involved throughout the year in regular conference calls and other forms
of communication to direct and oversee the audit, including the remote review of the work of component teams. Senior
team members visited the component team in the UK during the audit to discuss the work of that team. There was
regular communication throughout the year with the component teams.
A full scope audit on seven of the Group’s hotels and two entities engaged in the hotel management services and holding
the investment property under development was performed. These hotels and entities, together with procedures performed
over specific balances and transactions for one further hotel, one further entity engaged in hotel management services
and on central functions and at the Group level, accounted for 89% of the Group’s revenue, 93% of the Group’s loss
before tax, 84% of the Group’s underlying profit before tax and 89% of the Group’s total assets.
The impact of climate risk on our audit
In planning and executing our audit, we have considered the potential impact of climate change on the Group’s business
and it’s financial statements. We also considered the Group’s governance framework and preliminary risk assessment
process as outlined in the Task Force on Climate-related Financial Disclosures (‘TCFD’) section within this Annual Report.
Climate change could have a significant impact on the Group’s business as the operations and strategy of the Group
are adopted to address the potential financial and non-financial risks which could arise from both the physical and
transitional risks associated with climate change. Management has evaluated these as disclosed in the TCFD section
of this Annual Report.
We considered the following areas could potentially be materially impacted by climate risk and consequently we focused
our audit work in these areas:
Valuation of investment properties; and
Recoverability of the carrying amounts of hotel properties.
To respond to the audit risks identified in these areas we tailored our audit approach to address these, in particular, we:
Gained an understanding and evaluated whether the impact of both physical and transition risks arising due to
climate risk had been appropriately included in the valuation model of investment properties or recoverable value
assessments of the Group’s other assets;
Reviewed and challenged management and the external valuers (where applicable) on how climate related risks had
been incoporated into the valuation models and recoverable value assessments; and
Where climate risk relates to a key audit matter, our audit response is given in the key audit matters section of our
audit report.
102 Mandarin Oriental International Limited
We also considered the consistency of the disclosures in relation to climate change (including the TCFD section) within
the Annual Report with the financial statements and our knowledge obtained from our audit. This included:
Reading and challenging the disclosures given in the narrative reporting within the other information to the impact
disclosed within the financial statements.
Our procedures did not identify any material impact in the context of our audit of the financial statements as a whole,
or our key audit matters for the year ended 31st December 2022.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall Group materiality US$32.9 million (2021: US$3.0 million)
How we determined it Based on 1% of net assets (2021: Based on 5% of underlying loss before tax)
Rationale for benchmark applied Net assets is a primary measure used by the shareholders in assessing
the performance of the Group, together with consolidated revenue,
which we have used as the basis for our specific materiality as detailed below.
We set a specific Group materiality level of US$3.4 million (2021: no specific Group materiality was applied), which was
applied to balances and transactions not related to investment properties. This was based upon 0.75% of the Group’s
consolidated revenue. In arriving at this judgement, we had regard to the fact that revenue is an important financial
indicator of the Group.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group
materiality. The overall materiality allocated to components with investment properties was US$32.0 million. The range
of specific materiality allocated across component was US$0.9 million to US$2.0 million.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining
the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures,
for example in determining sample sizes. Our performance materiality was 75% (2021: 75%) of specific materiality
(2021: overall materiality), amounting to US$2.5 million (2021: US$2.3 million) for the Group financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls – and concluded that an amount in the middle of our
normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
US$0.3 million (2021: US$0.3 million) other than classifications within the Consolidated Profit and Loss Account or
Consolidated Balance Sheet, which were only reported above US$0.9 million (2021: US$2.3 million). We also report
misstatements below this amount that, in our view, warranted reporting for qualitative reasons.
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Independent Auditors’ Report Continued
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s ability to continue to adopt the going concern basis of
accounting included:
Evaluating the inherent risks to the Group’s and its businesses’ business models and analysed how those risks might
affect the Group’s financial resources or ability to continue operations over the going concern period;
Assessing management’s models supporting the Board’s going concern assessment, evaluating the process by which
the assessments have been drawn up, ensuring that the calculations in the model were mathematically accurate and
that the overall methodology used was appropriate;
Considering sensitivities over the level of available financial resources indicated by the Group’s financial forecasts
taking account of reasonably possible, but not unrealistic, adverse effects that could arise from adverse trading
conditions and impact the Group’s liquidity position over the going concern period;
Evaluating the committed financing facilities currently available to the Group and ensuring that the models
appropriately included all contractual debt repayments and committed capital expenditures;
Agreeing to debt agreements and associated amendments secured, the covenants attached to each facility and
considering the Group’s forecast compliance at the measurement dates included in the going concern assessment
period; and
Agreeing the cash on hand and available facilities included in the going concern assessment to our year end audit work.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group’s ability to continue as a going concern for
a period of at least 12 months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
As not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s ability to
continue as a going concern.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and
our auditors’ report thereon. The Directors are responsible for the other information. Our opinion on the financial
statements does not cover the other information and, accordingly, we do not express an audit opinion or any form of
assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency
or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement
of the financial statements or a material misstatement of the other information. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report based on these responsibilities.
104 Mandarin Oriental International Limited
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Responsibility Statements and the Corporate Governance sections, the Directors are
responsible for the preparation of the financial statements in accordance with the applicable framework and for being
satisfied that they give a true and fair view. The Directors are also responsible for such internal control as they determine
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to continue as a going
concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless
the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined in the Auditors’ responsibilities for the audit of the financial statements section, to
detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable
of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with
laws and regulations related to, but were not limited to, the Companies Act 1981 (Bermuda), the Listing Rules, tax
regulations, employment regulations, health and safety regulation and equivalent local laws and regulations applicable
to significant reporting component teams, and we considered the extent to which non-compliance might have a material
effect on the financial statements. We also considered those laws and regulations that have a direct impact on the
financial statements such as the Companies Act 1981 (Bermuda).
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements
(including the risk of override of controls), and determined that the principal risks were related to posting of inappropriate
journal entries and management bias in accounting estimates and judgements. The Group engagement team shared this
risk assessment with the component auditors so that they could include appropriate audit procedures in response to such
risks in their work. Audit procedures performed by the Group engagement team and/or component auditors included:
Gaining an understanding of the legal and regulatory framework applicable to the Group and considering the risk
of any acts by the Group which may be contrary to applicable laws and regulations, including fraud;
Discussions with management, internal audit and Group legal counsel, including consideration of known or
suspected instances of non-compliance with laws and regulation and fraud;
Review of reporting component auditors’ work, including any matters reported by component auditors’ relating to
non-compliance with laws and regulations or fraud;
Challenging assumptions and judgements made by management in their significant accounting estimates that
involved making assumptions and considering future events that are inherently uncertain, particularly in relation
to the valuation of investment properties and the impairment assessments related to the carrying value of hotel
properties (see related key audit matters above);
Incorporating elements of unpredictability in the audit procedures we performed; and
We did not identify any key audit matters relating to irregularities, including fraud. As in all of our audits we also
addressed the risk of management override of internal controls, including testing journals, and evaluated whether
there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
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Independent Auditors’ Report Continued
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics.
In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample
is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinion, has been prepared for and only for the Group’s members as a body in accordance with
Section 90 of the Companies Act 1981 (Bermuda) and for no other purpose. We do not, in giving this opinion, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it
may come, including without limitation under any contractual obligations of the Group, save where expressly agreed by
our prior consent in writing.
Partner responsible for the audit
The engagement partner on the audit resulting in this independent auditors’ report is John Waters.
Other matter
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R,
these financial statements will form part of the ESEF-prepared annual financial report filed on the National Storage
Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory Technical Standard
(‘ESEF RTS’). This auditors’ report provides no assurance over whether the annual financial report will be prepared
using the single electronic format specified in the ESEF RTS.
PricewaterhouseCoopers LLP
Chartered Accountants
London
2nd March 2023
106 Mandarin Oriental International Limited
To Mandarin Oriental International Limited
Dear Sirs
Revaluation of Under Development Leasehold Commercial Investment Property
Further to your instruction, we have valued in our capacity as external valuers of the Causeway Bay site under
development at No. 281 Gloucester Road, Causeway Bay, Hong Kong, being a commercial investment property
held on lease as described in the consolidated financial statements of Mandarin Oriental International Limited.
We are of the opinion that the market value of the commercial investment property as at 31st December 2022 was
US$2,384,900,000 (United States Dollar Two Billion Three Hundred Eighty-Four Million and Nine Hundred Thousand).
Our valuation was prepared in accordance with the International Valuation Standards by the International Valuation
Standards Council and The HKIS Valuation Standards by The Hong Kong Institute of Surveyors. We have inspected
the property without either conducting site nor structural surveys or testing of the services.
We have been provided with details of tenure, proposed development scheme and other relevant information. The property
has been valued by the direct comparison method and the residual method with equal weighting. The direct comparison
method is based on comparing the property to be valued directly with other comparable properties. The residual method
is based on an assessment of the completed gross development value and the deduction of development costs and the
developer’s return to arrive at the residual value of a development property. For the direct comparison method and
the assessment of the completed gross development value, given the heterogeneous nature of real estate properties,
appropriate adjustments are usually required to allow for any qualitative differences that may affect the price likely
to be achieved by the property under consideration.
Yours faithfully
Jones Lang LaSalle Limited
Hong Kong
16 February 2023
Report of the Valuers
107Annual Report 2022
Five Year Summary
Consolidated Profit and Loss Account
2018
US$m
2019
US$m
2020
US$m
2021
US$m
2022
US$m
Revenue 613.7 566.5 183.7 316.9 454.1
Operating profit/(loss) 70.7 (29.0) (660.0) (99.3) (42.6)
Net financing charges (14.2) (14.7) (12.6) (12.7) (14.4)
Share of results of associates and joint ventures 5.7 (1.7) (26.8) (21.8) 9.7
Profit/(loss) before tax 62.2 (45.4) (699.4) (133.8) (47.3)
Tax (19.0) (10.2) 19.4 (7.6) (2.1)
Profit/(loss) after tax 43.2 (55.6) (680.0) (141.4) (49.4)
Profit/(loss) attributable to shareholders 43.4 (55.5) (680.1) (141.4) (49.5)
Underlying profit/(loss) attributable to shareholders 64.9 41.2 (205.9) (68.1) 7.6
Earnings/(loss) per share (US¢) 3.44 (4.39) (53.84) (11.19) (3.92)
Underlying earnings/(loss) per share (US¢) 5.15 3.26 (16.30) (5.39) 0.60
Dividends per share (US¢) 3.00 1.50 – – –
Consolidated Balance Sheet
2018
US$m
2019
US$m
2020
US$m
2021
US$m
2022
US$m
Intangible assets 49.3 53.0 45.4 46.7 45.7
Tangible assets 1,205.9 1,174.6 1,181.5 1,098.2 916.3
Right-of-use assets 342.9 300.3 297.4 273.3 242.4
Investment properties – 2,967.7 2,528.3 2,462.0 2,472.6
Associates and joint ventures 196.1 203.1 231.6 201.5 203.8
Other investments 15.2 15.9 16.1 16.5 14.0
Deferred tax assets 11.5 10.6 17.8 13.7 14.2
Pension assets 0.2 1.3 5.5 7.1 3.0
Non-current debtors 5.1 6.2 5.1 8.9 12.2
Net current (liabilities)/assets (359.4) 181.4 19.5 113.2 142.9
Long-term borrowings (7.3) (568.6) (606.6) (727.8) (599.8)
Non-current lease liabilities (161.3) (168.4) (170.1) (147.4) (123.5)
Deferred tax liabilities (61.6) (59.4) (47.1) (50.1) (41.6)
Pension liabilities (0.4) (0.2) (0.3) (0.3) (0.1)
Non-current creditors – (0.9) (10.9) (3.2) (4.5)
Net assets 1,236.2 4,116.6 3,513.2 3,312.3 3,297.6
Share capital 63.1 63.2 63.2 63.2 63.2
Share premium 497.8 499.7 499.7 500.5 500.7
Revenue and other reserves 671.5 3,550.1 2,946.6 2,745.1 2,730.2
Shareholders’ funds 1,232.4 4,113.0 3,509.5 3,308.8 3,294.1
Non-controlling interests 3.8 3.6 3.7 3.5 3.5
Total equity 1,236.2 4,116.6 3,513.2 3,312.3 3,297.6
Net asset value per share (US$) 0.98 3.26 2.78 2.62 2.61
Consolidated Cash Flow Statement
2018
US$m
2019
US$m
2020
US$m
2021
US$m
2022
US$m
Cash flows from operating activities 152.6 112.9 (83.5) 26.4 56.5
Cash flows from investing activities (69.0) (80.4) (108.5) (32.5) 86.7
Net cash flow before financing activities 83.6 32.5 (192.0) (6.1) 143.2
Cash flow per share from operating activities (US¢) 12.11 8.94 (6.61) 2.09 4.47
108 Mandarin Oriental International Limited
Responsibility Statements
The Directors of the Company confirm to the best of their knowledge that:
a) the consolidated financial statements prepared in accordance with International Financial Reporting Standards,
including International Accounting Standards and Interpretations adopted by the International Accounting
Standards Board, give a true and fair view of the assets, liabilities, financial position and profit and losses of
the Group; and
b) the Chairman’s Statement, Group Chief Executive’s Review, Financial Review and the Principal Risks and
Uncertainties of this Annual Report, which constitute the management report required by the Disclosure Guidance
and Transparency Rule 4.1.8, include a fair review of all information required to be disclosed under Rules 4.1.8
to 4.1.11 of the Disclosure Guidance and Transparency Rules issued by the Financial Conduct Authority in the
United Kingdom.
For and on behalf of the Board
James Riley
Matthew Bishop
Dire ctors
2nd March 2023
109Annual Report 2022
Overview of the Group’s governance approach
The Mandarin Oriental Hotel Group (Mandarin Oriental International Limited (the ‘Company’) and its subsidiaries
together known as the ‘Group’) understands the value of good corporate governance in driving the long-term sustainable
success of business. It attaches importance to the corporate stability that strong governance brings, and the opportunities
that result from it being part of the Jardine Matheson Holdings Limited (‘Jardine Matheson’) group.
The Group is committed to high standards of governance. The system of governance it has adopted has been developed,
over many years, by the members of the Jardine Matheson group, and both the Group and its stakeholders regard it
as appropriate to the nature of its business and the long-term strategy it pursues in its Asian markets. The Group’s
governance framework is tailored to its size, ownership structure, complexity and breadth of business. It enables the
Group to benefit from Jardine Matheson’s strategic guidance and professional expertise while at the same time ensuring
that the independence of the Board is respected and clear operational accountability rests with the Company’s executive
management teams.
The Company also ensures that the Group retains and promotes those characteristics and values of a family-owned
business that have enabled the Group to prosper over the long-term:
A long-term perspective – the Group takes a long-term view in its decision-making and investments and draws
on the many years’ experience of our Directors, as opposed to focussing on short-term profitability. This leads to
long-term growth generation for our shareholders and the communities where we operate.
Credibility and trust – the credibility and trust that family ownership brings to the business are highly valued by
our partners and other stakeholders, especially in developing markets.
Deep knowledge of the business and our markets – the involvement of many generations of the family in the
running of the Group has led to a deep understanding of how to drive successful growth by the business across its
markets, giving the Group a competitive advantage.
The Group believes that its stakeholders gain significant value from the historical governance approach the Group has
taken as a family-owned business and that it is therefore important to retain the key elements of this approach. It is also
important, without losing these benefits, to adapt to changing circumstances in our markets and, where appropriate, to
the developing expectations of stakeholders and changes in best practice and the approach taken by our peers.
Accordingly, the Company continues to focus on enhancing the Group’s approach to corporate governance more
generally, focussing on changes which benefit the Group. The Company has focussed in years 2021 and 2022 on
changing the Group’s approach to corporate governance more generally and has led a series of changes to the governance
of the Group, including the composition of the Company’s Board. These changes, which were made to the Board in
December 2021, have increased the diversity and brought greater sector expertise to the Board through the appointment
of new Independent Non-Executive Directors. The size of the Board has also generally reduced as a result of the
retirement of a number of Directors. In addition, the Company has established formal Audit, Remuneration and
Nominations Committees at the listed company level.
Independent Non-Executive Directors with a broad and diverse range of backgrounds are a valuable source of external
perspectives and are a key element of good governance and decision-making. The Company and the Group can benefit
from the expertise and experience they bring, and the Company is taking steps to increase the independence and diversity
of its Board.
Having an effective corporate governance framework supports the Board in delivering the Group’s strategy and supports
long-term sustainable growth, and ensuring it operates transparently and in accordance with the best practice.
Corporate Governance
110 Mandarin Oriental International Limited
Group structure
Jardine Matheson is the ultimate holding company of the Group. The structural relationship between the Jardine
Matheson group and the Group is considered a key element of the Group’s success. By coordinating objectives,
establishing common values and standards, and sharing experience, contacts and business relationships, the Jardine
Matheson group companies, including the Mandarin Oriental Hotel Group, aim to optimise their opportunities across
the countries in which they operate.
Governance and legal framework
The Company is incorporated in Bermuda and was established as an Asian-based hotel group, and has since extended its
operations to numerous destinations around the world. The primary listing of the Company’s equity shares is a standard
listing on the Main Market of the London Stock Exchange (the ‘LSE’). The Company also has secondary listings in
Singapore and Bermuda. As the Company has only secondary listings on these exchanges, many of the listing rules of
such exchanges are not applicable. Instead, the Company must release the same information in Singapore and Bermuda
as it is required to release under the rules which apply to it as a standard-listed company on the LSE.
As a company incorporated in Bermuda , the Company is governed by:
The Bermuda Companies Act 1981 (the ‘Companies Act’);
The Bermuda Mandarin Oriental International Limited Consolidation and Amendment Act 1988 (as amended),
pursuant to which the Company was incorporated and the Bermuda Mandarin Oriental International Limited
Regulations 1993 (as amended) was implemented; and
The Company’s Memorandum of Association and Bye-laws.
The shareholders can amend the Company’s Bye-laws by way of a special resolution at a general meeting of the Company.
The Company’s standard listing on the LSE means that it is bound by many of the same rules as premium-listed
companies under the UK Listing Rules, the Disclosure Guidance and Transparency Rules (the ‘DTRs’) issued by the
Financial Conduct Authority in the United Kingdom (the ‘FCA’), the UK Market Abuse Regulation (the ‘MAR’) and
the Prospectus Regulation Rules, including in relation to continuous disclosure, periodic financial reporting, disclosure
of interests in shares, market abuse and the publication and content of prospectuses in connection with admission to
trading or the offering of securities to the public. The Company is also subject to regulatory oversight from the FCA,
as the Company’s principal securities regulator, and is required to comply with the Admission and Disclosure Standards
of the Main Market of the LSE. In addition, the Company and its Directors are subject to legislation and regulations in
Singapore relating, among other things, to insider dealing.
Some of the rules applicable to premium-listed companies do not apply to the Company. When the shareholders approved
the Company’s move to a standard listing from a premium listing in 2014, however, the Company stated that it intended
to maintain certain governance principles which were then-applicable to the Company’s premium listing. As a result, the
Company adopted several governance principles (the ‘Governance Principles’) based on the then-applicable requirements
for a premium listing, which go further than the standard listing requirements.
111Annual Report 2022
Corporate Governance Continued
Governance and legal framework continued
The key elements of the Governance Principles are as follows:
When assessing a significant transaction (a larger transaction which would be classified as a class 1 transaction
under the provisions of the UK Listing Rules), the Company will engage an independent financial adviser to provide
a fairness opinion on the terms of the transaction.
If the Company carries out a related party transaction which would require a sponsor to provide a fair and reasonable
opinion under the provisions of the UK Listing Rules, it will engage an independent financial adviser to confirm
that the terms of the transaction are fair and reasonable as far as the shareholders of the Company are concerned.
In addition, the Company shall observe the mandatory related party transaction rules under the DTRs, including
assessment, approval and disclosure requirements for material related party transactions, that apply to UK standard-
listed companies.
Further, as soon as the terms of a significant transaction or a related party transaction are agreed, an announcement
will be issued by the Company, providing such details of the transaction as are necessary for investors to evaluate the
effect of the transaction on the Company.
At each annual general meeting (‘AGM’), the Company will seek shareholders’ approval to issue new shares on
a non-pre-emptive basis for up to 33% of the Company’s issued share capital, of which up to 5% can be issued for
cash consideration.
The Company adheres to a set of Securities Dealing Rules, which follow the provisions of MAR with respect to
market abuse and disclosure of interests in shares.
The Company is not required to comply with the UK Corporate Governance Code (the ‘Code’), which applies to all
premium-listed companies and sets out the governance principles and provisions expected to be followed by companies
subject to the Code. However, the Company does have regard to the Code in developing and implementing its approach
to corporate governance and disclosure.
The management of the Group
The Board
The Board is responsible for ensuring that the Group is appropriately managed and achieves the strategic objectives it sets
in a way that is supported by the right culture, values and behaviours throughout the Group.
The Directors have the full power to manage the business affairs of the Company, other than matters reserved to be
exercised by the Company in general meeting under Bermuda legislation or the Company’s Bye-laws. Key matters for
which the Directors are responsible include:
Responsibility for the overall strategic aims and objectives of the Group;
Establishing the Company’s purpose and values;
Approval of the Group’s strategy and risk appetite to align with the Group’s purpose and values;
Approval and oversight of the Group policy framework and approval of appropriate Group policies;
Approval of the annual budget and monitoring of performance against it;
Oversight of the Group’s operations;
112 Mandarin Oriental International Limited
The Board continued
Approval of major changes to Group’s corporate or capital structure;
Approval of major capital expenditure and significant transactions in terms of size or reputational impact;
Approval of interim and annual financial statements upon recommendation from the Audit Committee, as well as
interim management statements;
Approval of the annual report and accounts;
Approval of dividend policy and the amount and form of interim and final dividend payments for approval by
shareholders as required;
Any significant changes to the Company’s accounting policies or practices, upon recommendation from the Audit Committee;
Appointment, re-appointment or removal of the external auditor, subject to shareholders’ approval, upon
recommendation from the Audit Committee;
Approval of matters relating to AGM resolutions and shareholder documentation;
Approval of all shareholder circulars, prospectuses and listing particulars issued by the Company; and
Approval of material public announcements concerning matters decided by the Board.
Responsibility for certain matters, including the approval of borrowing facilities and of capital expenditures (other
than significant capital expenditure which is required to be approved by the Board), has been delegated to the finance
committee established within the Hong Kong-based Group management company, Mandarin Oriental Hotel Group
International Limited (‘MOHG’), with specific written terms of reference outlining its role and authorities.
The Company sees the value of regularly reviewing the effectiveness of its processes, and making improvements where
appropriate.
Board composition and operational management
The Board’s composition and how it operates provide stability, allowing the Company to take a long-term view as it seeks
to grow its business and pursue investment opportunities.
The Chairman has been appointed in accordance with the provisions of the Bye-laws of the Company, which provide that
the chairman of Jardine Matheson, or any Director nominated by him, shall be the Chairman of the Company.
The Company has a dedicated executive management team led by the Group Chief Executive. The Memorandum of
Association of the Company, however, provides for the chairman of Jardine Matheson to be, or to appoint, the Managing
Director of the Company. The chairman of Jardine Matheson has appointed the Jardines Group Managing Director as
Managing Director of the Company. Reflecting this, and the Jardine Matheson group’s 79% interest in the Company’s
share capital, the Group Chief Executive and the Managing Director meet regularly. Similarly, the board of MOHG and
its finance committee are chaired by the Managing Director and include Mandarin Oriental Hotel Group executives and
Jardine Matheson’s deputy managing director, group finance director and group general counsel.
The presence of Jardine Matheson representatives on the Board and Audit Committee of the Company, as well as on the
board and finance committee of MOHG, provides an added element of stability to the Company’s financial planning
and supervision, enhancing its ability to raise finance and take a long-term view of business development. In addition,
the presence of Jardine Matheson representatives on the Company’s Board, Audit, Nominations and Remuneration
Committees, as well as MOHG’s finance committee, also strengthens the ability of management to work effectively
together in exploiting the full range of the Jardine Matheson group’s commercial strengths.
113Annual Report 2022
Corporate Governance Continued
Board composition and operational management continued
As at 2nd March 2023, the Company comprises nine Directors, three of whom (33%) – Jinqing Cai, Archie Keswick
and Richard Solomons – are Independent Non-Executive Directors as defined by the Code. The names of all the
Directors and brief biographies appear on pages 34 and 35 of this Annual Report.
Ben Keswick has been Chairman of the Board since 16th May 2013. John Witt has held the role of Managing Director
from 15th June 2020. James Riley has been Group Chief Executive since 1st April 2016. Ben Keswick previously held the
roles of Chairman and Managing Director on a combined basis from 16th May 2013 until the separation of these roles
from 15th June 2020.
The Board considers that there is a clear division of responsibilities among the Chairman, the Managing Director and
the Group Chief Executive to ensure an appropriate balance of power and authority is maintained at all times.
Number of
Directors
Capacity of Directors
0 1 2 3
Independent Non-Executive Directors
Non-Executive Directors
Executive Directors
0 62 841 73 5 9
Number of Directors
Directors’ experience
Age of Directors
Hotel sector-related industry knowledge/experience
International business
Executive leadership
Strategy & business acumen
Financial acumen
Corporate governance, risk management and/or sustainability
Property management
Food and beverage
Luxury retail
Nationality of Directors Tenure of Directors
British 5 years or below
6-10 years
Over 10 years
40-49
50-59
60-69
Age of Director
1 2
6
2 25
0 62 841 73 5 9
0 62 841 73 5 9
Canadian
Chinese
4
2
3
114 Mandarin Oriental International Limited
Chairman
The Chairman’s role is to lead the Board, ensure its effectiveness while taking into account the Group’s various
stakeholders’ interests, and promote high standards of corporate governance.
The Chairman’s principal responsibilities are in the areas of strategy, external relationships, governance and people. In
addition, he leads the Board in overseeing the long-term strategic direction of the Group and approving its key business
priorities. His key responsibilities include:
Leading, with the Managing Director and the Group Chief Executive, the development of the culture and values of
the Group;
Supporting the development and maintenance of relationships with existing and new key business partners,
governments and shareholders;
Ensuring, together with the Managing Director and Group Chief Executive, an appropriate focus on attracting and
retaining the right people and carrying out succession planning for senior management positions;
Creating a culture of openness and transparency at Board meetings;
Building an effective Board supported by a robust governance framework;
Ensuring all Directors effectively contribute to discussions and feel comfortable in engaging in healthy debate and
constructive challenge;
Leading, with the Managing Director, the succession planning for the Group Chief Executive;
Ensuring all Directors receive accurate, timely and clear information; and
Promoting effective communication between Executive and Non-Executive Directors (including the Independent
Non-Executive Directors).
Managing Director
The Managing Director acts as chairman of MOHG and of its finance committee and is a member of the Company’s
Nominations and Remuneration Committees. He has responsibility for representing Jardine Matheson, as the major
shareholder of the Company, including:
Providing oversight of the day to-day management by the Group Chief Executive and his leadership team of
the business;
Carrying out ongoing reviews of the business, financial and operational performance against agreed objectives;
Providing regular feedback to the Group Chief Executive on his/her performance and conducting an annual
performance review;
Leading the Group Chief Executive succession planning;
Ensuring that there is appropriate discussion of future competencies required of the management team to execute
the strategy;
Ensuring that the information submitted to the Board is of high quality and provided on a timely basis;
Ensuring the Board conducts reviews on past significant capex decisions; and
Communicating with shareholders as appropriate.
115Annual Report 2022
Corporate Governance Continued
Group Chief Executive
The responsibility for running the Group’s business and all the executive matters affecting the Group rest with the Group
Chief Executive. The implementation of the Group’s strategy is delegated to the Company’s executive management, with
decision-making authority within designated financial parameters delegated to the MOHG finance committee. The
Group Chief Executive has day-to-day operational responsibility for:
The effective management of the Group’s business;
Leading the development of the Company’s strategic direction and implementing the agreed strategy;
Identifying and executing new business opportunities;
Managing the Group’s risk profile and implementing and maintaining an effective framework of internal controls;
Developing targets and goals for his executive team;
Ensuring effective communication with shareholders and key stakeholders and regularly updating institutional
investors on the business strategy and performance;
Providing regular operational updates to the Board on all matters of significance relating to the Group’s business
or reputation;
Overseeing the Group’s capital allocation, business planning and performance;
Ensuring (together with the Chairman and the Managing Director) an appropriate focus on attracting and retaining
the right people and carrying out succession planning for senior management positions; and
Fostering innovation and entrepreneurialism to drive the Group’s business forward.
Non-Executive Directors
The Non-Executive Directors bring insight and relevant experience to the Board. They have responsibility for
constructively challenging the strategies proposed by the Executive Directors, and scrutinising the performance of
management in achieving agreed goals and objectives. In addition, Non-Executive Directors work on individual
initiatives as appropriate.
Board meetings
The Board usually holds four scheduled meetings each year, and ad hoc procedures are adopted to deal with urgent
matters between scheduled meetings. Board meetings are usually held in different locations around the Group’s markets.
In March 2022, as border restrictions began to ease, a hybrid meeting was held in Singapore. The May 2022 Board meeting
was held virtually. In-person Board meetings were held in Singapore in July 2022 and Bangkok in December 2022.
The Board receives high quality, up to date information for each of its meetings, which is provided to Directors via a
secure online board information portal. The Company reviews the information provided to the Board regularly, to ensure
that it remains relevant to the needs of the Board in carrying out its duties.
The Directors of the Company who do not serve on the board of MOHG and who are based outside Asia will usually visit
Asia and Bermuda to discuss the Group’s business and participate in the four strategic reviews that precede regular Board
meetings. These Directors are not directly involved in the operational management of the Group’s business activities, but
their knowledge of the Group’s affairs, as well as their experience of the wider Jardine Matheson group, provide significant
value to the ongoing review by the Company of the Group’s business and reinforces the Board oversight process.
116 Mandarin Oriental International Limited
Board attendance
Directors are expected to attend all Board meetings. The table below shows the attendance at the scheduled 2022 Board
meetings:
Meetings eligible
to attend Attendance
Directors
Non-Executive Directors
Ben Keswick 4/4 100%
Jinqing Cai 4/4 100%
Adam Keswick 4/4 100%
Archie Keswick 4/4 100%
Y.K. Pang 4/4 100%
Richard Solomons 4/4 100%
Executive Directors
John Witt 4/4 100%
James Riley 4/4 100%
Matthew Bishop 4/4 100%
Appointment and retirement of Directors
The Board appoints each new Director, and the Nominations Committee has been established to assist the Board in
such matters. In accordance with the Company’s Bye-laws, each new Director is subject to retirement and re-election
at the first AGM after the appointment. After that, Directors are subject to retirement by rotation requirements under
the Bye-laws, whereby one-third of the Directors retire at the AGM each year. These provisions apply to both Executive
and Non-Executive Directors, but the requirement to retire by rotation does not extend to the Chairman or Managing
Director of the Company. John Witt, being the Managing Director, has a service contract with the Company that has a
notice period of six months.
In accordance with Bye-law 85, James Riley and Archie Keswick will retire by rotation at this year’s AGM and, being
eligible, offer themselves for re-election. James Riley has a service contract with a subsidiary of the Company that has
a notice period of six months. Archie Keswick does not have a service contract with the Company or its subsidiaries.
Directors need to obtain the Chairman’s approval before accepting additional appointments that might affect their time
to devote to the role as a Director of the Company.
Company Secretary
All Directors have access to the advice of the Company Secretary, who is responsible for advising the Board on all
governance matters.
117Annual Report 2022
Corporate Governance Continued
Committees
The Board is supported by the activities of its Committees (the Nominations, Remuneration and Audit Committees),
which ensure the right level of attention and consideration are given to specific matters. Matters considered by each of
the Committees are set out in their respective terms of reference. Copies of these documents can be obtained from the
Company’s website at www.mandarinoriental.com.
Nominations Committee
The Board established a Nominations Committee (the ‘Nominations Committee’) in March 2021. The key
responsibilities of the Nominations Committee are to:
Review the structure, size and composition of the Board and its committees and make recommendations to the Board
on any appointments to maintain a right balance of skills, knowledge and experience and independence, as well as
a diversity of perspectives;
Support the Chairman to lead the process for Board appointments and nominate suitable candidates to the Board;
Assess suitable candidates based on merit and objective criteria (considering the promotion of the diversity of social
and ethnic backgrounds, knowledge, experience and skills), taking into account their ability to meet the required
time commitments;
Oversee the development of succession pipelines for both the Board and senior management positions to ensure talent
is identified and nurtured to meet the challenges and opportunities facing the Group; and
Satisfy itself that any skill gaps are addressed in the reviews of Board composition and that appropriate development
opportunities are in place for Directors to keep abreast of market knowledge and industry trends to perform their
role effectively.
The Nominations Committee consists of a minimum of three members, selected by the Chairman of the Board. The
Chairman of the Board is the chairman of the Nominations Committee. The current members of the Nominations
Committee are Ben Keswick, Adam Keswick and John Witt. The Nominations Committee meets as circumstances
require, or by the circulation of Committee circulars to make recommendations to the Board for approval as it deems
appropriate. It plays a key role in the process of recruiting senior executives. Candidates for appointment as Executive
Directors of the Company or other senior management positions may be sourced internally or externally, including by
using the services of specialist executive search or recruitment firms. The aim is to appoint individuals who combine
international business knowledge and experience, industry knowledge and experience if possible, and familiarity with,
or adaptability to, Asian markets. When appointing Non-Executive Directors, the Committee pays particular attention
to the Asian business experience and relationships that they can bring.
Insurance and indemnification
The Company purchases insurance to cover its Directors against their costs in defending themselves in civil proceedings
taken against them in that capacity and in respect of damages resulting from the unsuccessful defence of any proceedings.
To the extent permitted by applicable law, every Director shall be indemnified and secured harmless out of the assets of
the Company against all liability and loss suffered and expenses reasonably incurred. However, neither insurance nor
indemnity provides cover where the Director has acted fraudulently or dishonestly.
118 Mandarin Oriental International Limited
Delegations of authority
The Group has in place an organisational structure with defined lines of responsibility and delegation of authority.
There are established policies and procedures for financial planning and budgeting, information and reporting systems,
assessment of risk; and monitoring of the Group’s operations and performance. The information systems in place are
designed to ensure that the financial information reported is reliable and up to date.
Directors’ responsibilities in respect of the financial statements
Under the Companies Act, the Directors are required to prepare financial statements for each financial year and present
them annually to the Company’s shareholders at the AGM. The financial statements are required to present fairly, in
accordance with the International Financial Reporting Standards (‘IFRS’), the financial position of the Group at the
end of the year, and the results of its operations and its cash flows for the year then ended. The Directors consider that
applicable accounting policies under IFRS, applied consistently and supported by prudent and reasonable judgements
and estimates, have been followed in preparing the financial statements. The financial statements have been prepared on
a going concern basis.
Substantial shareholders
As classified as a non-UK issuer, the Company is subject to the provisions of the DTRs, which require that a person must,
in certain circumstances, notify the Company of the percentage of voting rights attaching to the share capital of the
Company that person holds. The obligation to notify arises if that person acquires or disposes of shares in the Company
and that results in the percentage of voting rights which the person holds reaching, exceeding, or falling below, 5%, 10%,
15%, 20%, 25%, 30%, 50% and 75%.
The Company has been informed of the holding of voting rights of 5% or more attaching to the Company’s issued
ordinary share capital by Jardine Strategic Limited (‘Jardine Strategic’), which is directly interested in 1,004,193,209
ordinary shares carrying 79.46% of the voting rights. By virtue of its interest in Jardine Strategic, Jardine Matheson is
also interested in the same ordinary shares. Apart from this shareholding, the Company is not aware of any holders of
voting rights of 5% or more attaching to the Company’s issued ordinary share capital as of 2nd March 2023.
There were no contracts of significance with substantial corporate shareholders during the year under review.
Related party transactions
Details of transactions with related parties entered into by the Company during the course of the year are included in
note 30 to the financial statements on page 75.
Engagement with shareholders and stakeholders
The Group regularly engages with its shareholders and other stakeholders to provide an opportunity to ask questions
of senior management. Since the beginning of 2022, the Group have held two results briefings and three analyst and
institutional shareholder meetings to answer those questions, discuss concerns, and hear feedback on areas where
improvements could be made.
The Group has also engaged with thought leaders to listen, learn and understand how we can improve. They include
global and regional non-profit associations at the forefront of driving sustainable travel and tourism, an independent
think tank and the world’s leading conservation non-governmental organisation. The engagements provide an
opportunity for us to explore and discuss key social, environmental and economic issues facing society and where our
businesses operate. They also provide an important touch point to sense-check the issues that matter most to society
and help us better understand evolving expectations. The meetings with key thought leaders are attended by senior
management including the Group’s Chief Executive.
119Annual Report 2022
Corporate Governance Continued
Securities purchase arrangements
The Directors have the power under the Companies Act and the Company’s Memorandum of Association to purchase
the Company’s shares. Any shares so purchased shall be treated as cancelled and, therefore, reduce the Company’s issued
share capital. When the Board reviews the possibility of share repurchases, it will consider the potential for enhancing
earnings or asset values per share. When purchasing such shares, the Company is subject to the provisions of MAR.
Colleague engagement
The Group is working hard to support the growth of the next generation of leaders within our businesses, ensuring our
colleagues can develop the skills they need and further their careers with the Group.
We also aim to create an owner mindset among our colleagues and support this by enhancing our incentive structures
to focus less on current profits and more on value creation over a longer time horizon. This longer-term view also
incentivises experimentation and innovation.
The Group also conducted a colleague experience survey with a global completion rate of 98%. Results from the survey
led to a global sustainable engagement score of 88%, the same as in 2021, and a global colleague retention score of 61%
which was a 4% improvement on 2021. Action plans have been developed by each hotel and departments to address the
survey outcomes.
Annual General Meeting
The 2023 AGM will be held on 4th May 2023. The full text of the resolutions and explanatory notes regarding the
meeting are contained in the Notice of AGM, despatched at the same time with this Annual Report.
Corporate website
A corporate website is maintained containing a wide range of information of interest to investors at
www.mandarinoriental.com.
Group policies
Code of Conduct
The Group conducts business in a professional, ethical and even-handed manner. Its ethical standards are set out in its
Code of Conduct, a set of guidelines to which every employee must adhere. It is reinforced and monitored by an annual
compliance certification process and modelled on the Jardine Matheson group’s code of conduct. The Code of Conduct
requires that all Group companies comply with all laws of general application, all rules and regulations that are industry
specific and proper standards of business conduct. In addition, the Code of Conduct prohibits the giving or receiving of
illicit payments. It requires that all Directors and employees must be fully aware of their obligations under the Code of
Conduct and establish procedures to ensure compliance at all levels within their businesses.
The Company’s policy on commercial conduct underpins the Group’s internal control process, particularly in the area of
compliance. The policy is also set out in the Group’s Code of Conduct.
Data privacy
The Group is committed to being a responsible custodian of the data entrusted to it by customers, employees, business
partners and other stakeholders. In addition, it is subject to multiple data privacy and security laws and regulations
in the global jurisdictions in which it operates. Accordingly, the Group is dedicated to complying with such laws and
regulations, regularly monitoring for legislative changes and adjusting its policies and procedures when appropriate.
Appropriate protections are in place to prevent misuse and unauthorised disclosure of personal data.
The Group’s Privacy Policy, and internal guidelines and procedures, underline the Group’s commitment to being a
responsible data custodian and ensuring compliance with applicable law.
120 Mandarin Oriental International Limited
Whistleblowing policy
The Group has a whistleblowing policy covering how employees can report matters of serious concern. The Audit
Committee has responsibility for overseeing the effectiveness of the formal procedures for colleagues to raise such
matters and is required to review any reports made under those procedures referred to it by the internal audit function.
In addition, the Group has a whistleblowing service managed by an independent third-party service provider to
supplement existing whistleblowing channels to assist employees in reporting suspected illegal or unethical behaviour
or other matters of serious concern and is intended to help foster an inclusive, safe and respectful workplace. The service,
which is available 24 hours in multiple local languages, and is accessible through phone hotline or online, and as
anonymous submissions, may be used by colleagues to report a matter of concern to a manager supervisor, Human
Resources or Legal representative.
Reports may be lodged by one of three channels: email, website and telephone hotline. Each report is allocated a unique
case number which enables follow-up with the reporter. Once a report is lodged, it is sent to certain authorised persons at
the relevant business units. These include senior representatives from legal, compliance and Human Resource teams who
have experience in dealing with such matters. The authorised persons will follow up on the report and investigate where
necessary. The reporter will be notified of the outcome.
All reports are treated confidentially and any retaliation against a person reporting a potential breach of the Code of
Conduct is a cause for disciplinary action under the Group’s whistleblowing policy.
Diversity and Inclusion
The Group will continue to foster a culture of inclusivity and empowerment, where colleagues with different backgrounds
feel comfortable in being themselves, in voicing their ideas and have equal opportunities to thrive. The Group applies the
principle that colleagues should always treat others in a way they would expect others to treat them. No form of bullying,
intimidation, discrimination, and harassment of others has a place in the Group and would not be tolerated.
As a global hospitality employer, the Group believes in promoting equal opportunities in recruiting and developing all
employees, regardless of ethnicity, gender, age, sexual orientation, disability, background or religion, should be treated
fairly and with respect, and be valued for the contributions they make in their role. The high service expectations and
overall quality of the Mandarin Oriental brand necessitate that the Group seeks the best people from the communities
in which it operates most suited to its needs.
All colleagues are encouraged and supported to develop their full potential and contribute to the sustainable growth
of the Group. Colleagues’ views and ideas are essential, and they are encouraged to express them respectfully with
colleagues at all levels within the organisation.
To build an inclusive workplace, we incorporate the Diversity and Inclusion principles across our business and HR
practices. This includes:
Ensuring a set of inclusive working arrangements and policies to support Diversity and Inclusion;
Keeping our recruitment, promotion and retention systems fair, based on aptitude, merit and ability;
Providing active talent management and career support for the Group’s colleagues to open up opportunities that
will facilitate a future pipeline of excellent leaders; and
Cultivating leadership behaviour through learning campaigns to ensure colleagues behave in accordance with
the Group’s value.
The Company keeps the composition of its Board and senior management positions under review, to ensure that
it adapts to the changing business landscape. The Company is actively focussed on increasing gender diversity.
121Annual Report 2022
Corporate Governance Continued
Remuneration Report
Message from the Board/Remuneration Committee
The Board is pleased to present shareholders with the 2022 Remuneration Report. This report sets out the Group’s
approach to remuneration for its executives and Directors, particularly the link between the Group’s values, strategy
and its remuneration framework, the link between performance and reward, and remuneration outcomes for
senior executives.
The Group’s remuneration philosophy and framework for rewarding staff
The remuneration outcomes in 2022 reflect the intended operation of the remuneration framework.
At the heart of the Group’s remuneration framework is our commitment to deliver competitive remuneration for
excellent performance to attract the best and motivate and retain talented individuals, while aligning the interests of
executives and shareholders. The Company aims to ensure all remuneration is delivered in a manner that is aligned with
the values of the Company.
The Group achieves this through:
Performance-based variable compensation;
Incentives based on financial measures and strategic objectives that reflect key goals critical to sustained
organisational success;
Consideration of business and operational risk as well as a sustainability development goal through the design of
performance objectives;
Providing incentives and policies which align the interests of executives to those of shareholders;
Best-practice governance and ensuring remuneration outcomes are reasonable, taking into account community and
stakeholder expectations; and
Targeting remuneration levels and outcomes appropriately reflect the challenge and complexity of being a
multinational Asian-based hotel group with diverse hospitality businesses.
The Company’s policy is to offer competitive remuneration packages to its senior executives. The Company relies
on a reward framework that provides varying levels of remuneration and benefits depending on employee level. It is
recognised that, given the nature of the Group and its diverse geographic base, a number of its senior executives are
required to be offered international terms, and the nature of the remuneration packages is designed to reflect this. This
structure of remuneration varies from senior executive to more junior level employees, but the link of remuneration to
strategic goals is consistent. The nature of goals used for remuneration varies depending on employee level, but the
Company ensures goals are relevant and measurable while aligned with company values. In addition, Executive Directors
joining from outside the Group may be offered an initial fixed-term service contract to reflect any requirement for them
to relocate.
Accordingly, the remuneration mix for employees varies depending on level. At senior executive levels, more
remuneration is ‘at risk’, depending on performance levels against goals. At more junior levels, more remuneration is
directed toward fixed remuneration. The Company strives to provide an appropriate amount of remuneration ‘at risk’
for the achievement of goals – whether those are short- or long-term in nature.
Directors’ Remuneration
Shareholders decide in general meetings the Directors’ fees which are payable to all Directors other than the Group Chief
Executive and the Chief Financial Officer, as provided for by the Company’s Bye-laws.
122 Mandarin Oriental International Limited
Directors’ Remuneration continued
The remuneration of the Company’s Non-Executive Directors is not linked to performance. This is consistent with
Non-Executive Directors being responsible for objective and independent oversight of the Group. The total amount
provided to all Directors (including the Managing Director but exclusive of salaried Executive Directors who are not
entitled to such fees) must not exceed the sum agreed by shareholders at a general meeting. The maximum aggregate
remuneration of US$1.0 million per annum was approved by shareholders at the 2022 AGM. Executive Directors
(excluding the Managing Director, who is also the Jardines Group Managing Director) are paid a basic fixed salary as
well as discretionary annual incentive bonuses by and receive certain employee benefits from the Group. Non-Executive
Directors do not receive bonuses or any other incentive payments or retirement benefits. The Non-Executive Directors
are reimbursed for expenses properly incurred in performing their duties as a Director of the Company. The schedule
of fees paid to Directors in respect of the financial year 2022 is set out in the table below. Fees are annual fees, unless
otherwise stated:
USD (per annum)
Chairman/Managing Director fee: 100,000
Base Director fee: 90,000
Audit Committee fee: 35,000
Nominations Committee fee: 15,000
Director
Director Fee
US$
Audit
Committee Fee
US$
Nominations
Committee Fee
US$
Total Fees
US$
1 Ben Keswick (Chairman) 100,000 – 15,000 115,000*
2 John Witt (Managing Director) 100,000 – 15,000 115,000*
3 James Riley – – – –
4 Matthew Bishop – – – –
5 Jinqing Cai 90,000 – – 90,000
6 Adam Keswick 90,000 – 15,000 105,000*
7 Archie Keswick 90,000 – – 90,000
8 Y.K. Pang 90,000 35,000 – 125,000*
9 Richard Solomons 90,000 35,000 – 125,000
Total 650,000 70,000 45,000 765,000
* Fees surrendered to Jardine Matheson
Remuneration Committee
The Board has overall responsibility for setting remuneration across the Group, ensuring it is appropriate and supports
the Group’s strategy, creating value for stakeholders. The Remuneration Committee has been established to assist the
Board in these remuneration matters.
The Board established a Remuneration Committee (the ‘Remuneration Committee’) at the Company level in December
2021. The key responsibilities of the Remuneration Committee are to:
Oversee the formulation of a Group-wide reward strategy and ensure the business implements the reward strategy
in alignment with its industry-specific needs;
Review and approve the compensation of the Group Chief Executive and leadership team of the business;
Review the terms of and design of performance-related incentives (both short- and long-term), including the review
and approval of any changes to plan design, targets and metrics;
Review and approve the overall compensation costs, including salary and bonus budgets, of the business; and
Remain abreast of trends and developments in executive compensation and corporate governance related to the
Group’s industry and countries of operation.
123Annual Report 2022
Corporate Governance Continued
Remuneration Committee continued
The Remuneration Committee consists of a minimum of three members, selected by the Chairman of the Board. The
Chairman of the Board is the chairman of the Remuneration Committee. The current members of the Remuneration
Committee are Ben Keswick, John Witt and Graham Baker. In addition, the Group Chief Executive, the Chief
Human Resources Officer and Jardine Matheson group head of human resources will generally attend meetings of
the Remuneration Committee. The Remuneration Committee meets as circumstances require, or by the circulation
of Committee circulars which make recommendations to the Board for approval as it deems appropriate.
How remuneration framework is linked to the business strategy
The Group’s remuneration strategy is designed to support and reinforce its business and sustainability strategies. The
at-risk components of remuneration are tied to measures that reflect the successful execution of these strategies in both
the short and long terms. Our strategic drivers of ‘Elevating our brand, Lifting our people, Powering our core and
Exceptional quality’ are reflected in bonus performance measures. So, the Group’s actual performance directly affects
what executives are paid.
Remuneration outcomes in 2022
For the year ended 31st December 2022, the Directors received from the Group US$5.7 million (2021: US$4.6 million) in
Directors’ fees and employee benefits, being:
US$0.8 million (2021: US$0.7 million) in Directors’ fees;
US$4.7 million (2021: US$3.7 million) in short-term employee benefits, including salary, bonuses, accommodation
and deemed benefits in kind;
US$0.1 million (2021: US$0.1 million) in post-employment benefits; and
US$0.1 million (2021: US$0.1 million) in long-term incentive benefits.
The information set out in the section above headed ‘Remuneration outcomes in 2022’ forms part of the audited
financial statements.
Share schemes
Share-based long-term incentive plans have also been established to provide incentives for Executive Directors and senior
managers. The scheme trustee grants share options and share awards after consultation between the Chairman and the
Group Chief Executive and other Directors as they consider appropriate. Share options are granted at prevailing market
prices, while share awards will vest free of payment. The share options and share awards normally vest on or after the
third anniversary of the grant date. Grants may be made in several instalments. Share options and share awards are not
granted to Non-Executive Directors.
Directors’ share interests
The Directors of the Company in office on 2nd March 2023 had interests* as set out below in the Company’s ordinary
share capital. These interests include those notified to the Company regarding the Directors’ closely associated persons*.
John Witt 4,894,068
James Riley 180,450
* Within the meaning of MAR
124 Mandarin Oriental International Limited
Audit Committee Report
Audit Committee
The Board had established an Audit Committee (the ‘Audit Committee’) at the Company level in December 2021.
The Audit Committee consists of four members, the current members of which are:
Richard Solomons (Chairman of the Audit Committee and Independent Non-Executive Director);
Graham Baker (Financial Expert);
Jinqing Cai (Independent Non-Executive Director); and
Y.K. Pang.
None of them is directly involved in the operational management of the Company. On 2nd March 2023, Richard
Solomons was appointed as Chairman of the Audit Committee in place of Y.K. Pang, who remains as a member of the
Audit Committee. As a result the Audit Committee is chaired by an Independent Non-Executive Director. Jinqing Cai,
an Independent Non-Executive Director, was also appointed as a member of the Audit Committee on 2nd March 2023.
With the appointment of Richard Solomons and Jinqing Cai, both Independent Non-Executive Directors, in December
2021 and March 2023 to the Audit Committee, the Company is moving towards a majority of independent members
in its Audit Committee. Graham Baker is also a member of the Audit Committee with recent financial experience and
expertise, as well as a deep understanding of risk management.
The Managing Director, Group Chief Executive and Chief Financial Officer, and representatives of the internal and
external auditors, also attend the Audit Committee meetings by invitation. In addition, other individuals may attend
part of a meeting for specific agenda items as appropriate. The Audit Committee meets twice a year and reports to the
Board after each meeting.
Its terms of reference govern the role of the Audit Committee. The Audit Committee’s remit includes:
Independent oversight and assessment of financial reporting processes, including related internal controls;
Independent oversight of risk management and compliance;
Monitoring and reviewing the effectiveness of the internal and external audit functions;
Considering the independence and objectivity of the external auditors; and
Reviewing and approving the level and nature of non-audit work performed by the external auditors.
Before completion and announcement of the half-year and year-end results, a review of the financial information and
any issues raised in connection with the preparation of the results, including the adoption of new accounting policies,
is undertaken by the Audit Committee with the executive management and a report is received from the external auditors.
The external auditors also have access to the entire Board when necessary, in addition to the Group Chief Executive,
Chief Financial Officer and other senior executives.
125Annual Report 2022
Corporate Governance Continued
The matters considered by the Audit Committee during 2022 included:
Reviewing the 2021 annual financial statements and 2022 half-year financial statements, with particular focus on
the impact of COVID-19, provisioning and impairment assessments, assumptions that underpinned key valuation
models and effectiveness of financial controls;
Reviewing the actions and judgments of management in relation to changes in accounting policies and practices to
ensure clarity of disclosures and compliance with new accounting standards;
Receiving reports from the internal audit function on the status of the control environment of the Group and its
business divisions and progress made in resolving matters identified in the reports;
Reviewing the principal risks, evolving trends and emerging risks that affect the Group, and monitoring changes to
the risk profile, as well as the effectiveness of risk management measures and crisis management arrangements;
Receiving updates on the cybersecurity threat landscape and the Group’s cybersecurity environment, risk
management approach, training, priorities and control effectiveness;
Receiving reports from risk management and legal functions on key legal matters and compliance and code of
conduct issues, and the actions taken in addressing those issues and strengthening controls;
Reviewing the annual internal audit plan and status updates;
Reviewing the Group’s governance approach to cybersecurity management, data security and privacy management
across its businesses;
Reviewing the biennial assessment of the effectiveness of PwC;
Reviewing the independence, audit scope and fees of PwC, and recommending their re-appointment as the external
auditor at general meeting; and
Conducting a review of the terms of reference of the Audit Committee.
Audit Committee attendance
The table below shows the attendance at the scheduled 2022 Audit Committee meetings:
Meetings eligible
to attend Attendance
Members of the Audit Committee
Directors of the Company
Y.K. Pang 2/2 100%
Richard Solomons 2/2 100%
Director of MOHG
Graham Baker 2/2 100%
126 Mandarin Oriental International Limited
Auditor independence and effectiveness
The Group auditor’s independence and objectivity are safeguarded by control measures including:
Limiting the nature of non-audit services (including the adoption by the Company of a non-audit services policy);
The external auditor’s own internal processes to approve requests for non-audit work to the external audit work;
Monitoring changes in legislation related to auditor independence and objectivity;
The rotation of the lead auditor partner after five years;
Independent reporting lines from the external auditor to the Audit Committee and providing an opportunity for
the external auditor to have in-camera sessions with the Audit Committee;
Restrictions on the employment by the Group of certain employees of the external auditor;
Providing a confidential helpline that employees can use to report any concerns; and
An annual review by the Audit Committee of the policy to ensure the objectivity and independence of the
external auditor.
The Board’s annual review in 2022 of the Auditor’s Independence and Effectiveness found that PwC performed their
duties effectively. The Board found the level of professional scepticism, the number and regularity of meetings with the
Audit Committee, feedback from Audit Committee members and internal stakeholders and the levels of technical skills
and experience to be effective.
Risk management and internal control
The Board has overall responsibility for the Group’s risk management systems and internal control. The Board has
delegated responsibility to the Audit Committee for providing oversight regarding risk management activities. The Audit
Committee considers the Group’s principal risks and uncertainties and potential changes to the risk profile. It reviews
the operation and effectiveness of the Group’s internal control systems (financial, operational and compliance) and the
procedures by which these risks are monitored and mitigated.
The Audit Committee considers the systems and procedures regularly and reports to the Board semi-annually. The
Jardine Matheson Group Audit and Risk Management (‘JM GARM’) is appointed to assist the Audit Committee in
fulfilling its assurance and reporting roles. JM GARM adheres to international standards for the professional practice of
internal audit. To safeguard its independence and objectivity, JM GARM reports functionally to the Audit Committee
of the Company and has full and unrestricted access to all business functions, records, properties and personnel.
The internal control systems are designed to manage, rather than eliminate, business risk; to help safeguard the Group’s
assets against fraud and other irregularities; and give reasonable, but not absolute, assurance against material financial
misstatement or loss. Executive management is responsible for implementing the systems of internal control throughout
the Group.
The Group has an established risk management process that is reviewed regularly and covers all business units within the
Group. This includes the maintenance of risk registers that detail the emerging and existing risks to the future success of the
business and the relevant key controls and mitigating factors that address those risks. These are reviewed on a regular basis.
The internal audit function also monitors the approach taken by the business units to risk. The internal audit function is
independent of the operating businesses and reports its findings and recommendations for any corrective action required
to the Audit Committee.
The Company’s principal risks and uncertainties are set out on pages 130 to 136.
127Annual Report 2022
Corporate Governance Continued
Risk governance structure
MO Board of Directors
MO Management
MO Audit Committee
MO Risk Management
Internal Audit
(‘JM GARM’)
Delegate/
Oversee
Report Monitor/
Review
External Audit
(‘PwC’)
The Group’s Management is responsible for:
Identifying and assessing principal risks and uncertainties to which it is exposed;
Implementing the most appropriate actions to mitigate and control those risks to an acceptable level;
Providing adequate resources to minimise, offset or transfer the effects of any loss that may occur while managing
acceptable risk/benefit relationships;
Monitoring the effectiveness of the systems of risk management and internal control;
Reporting periodically to its Board of Directors via the Audit Committee and JM GARM on the principal risks and
uncertainties; and
Working with external and internal auditors to monitor and improve its control environment.
128 Mandarin Oriental International Limited
Risk Management Framework
Risk management is integrated into each business unit’s strategic planning, budgeting, decision-making and operations.
Central to this is the continuous and systematic application of:
Risk Identification
Risk
Treatment
Risk Reporting
& Monitoring
Risk
Assessment
Risk Management Framework based on ISO 31000 and COSO principles is embedded in the Group to identify, assess
and define the strategies to monitor risks. The risk registers prepared by each business unit provide the basis for the
aggregation process, which summarises the principal risks and uncertainties facing the Group as a whole.
Risk Identification Identify and document the Group’s exposure to uncertainty with existing
strategic objectives.
Adopt structured and methodical techniques to identify critical risks.
Risk Assessment Evaluate risks by estimating likelihood, financial and reputational damage, and the
speed at which the risk materialises, based on its inherent and residual level.
Determine risk rating using the risk heatmap, with four levels of residual risk status.
Risk Treatment Tolerate – accept if within the Group’s risk appetite.
Terminate – dispose or avoid risks were no appetite.
Risks may be accepted if mitigated to an appropriate level via:
– Transfer – take out insurance or share risk through contractual arrangements with
business partners; and
– Treat – redesign or monitor existing controls or introduce new controls.
Risk Reporting
& Monitoring
Periodic review of principal risks and uncertainties.
Setting key risk indicators to enhance monitoring and mitigation of risks.
Regular reporting of principal risks and uncertainties from the Group’s business units to
the Board of Directors via Audit Committee and JM GARM.
129Annual Report 2022
Corporate Governance Continued
Principal risks and uncertainties
The following are the principal risks and uncertainties facing the Company as required to be disclosed pursuant to the
DTRs issued by the FCA and are in addition to the matters referred to in the Chairman’s Statement, Group Chief
Executive’s Review, and other parts of this Annual Report.
Reputational risk and
value of the brand
Description
The Group’s brand equity and global reputation is fundamental in supporting its ability
to offer premium products and services and to achieving acceptable revenues and profit
margins. Accordingly, any damage to the Group’s brand equity or reputation, including as
a result of adverse effects relating to health and safety, acts or omissions by Group personnel,
and any allegations of socially irresponsible policies and practices, might adversely impact
the attractiveness of the Group’s properties or the loyalty of the Group’s guests.
Mitigation
Engage external consultants and experts where necessary.
Perform regular cybersecurity and data vulnerability assessment at least annually and/or
penetration testing to identify weaknesses.
Active monitoring and use of social media.
Concentration risk Description
Certain locations in Asia contribute a significant portion of the Group’s underlying profit.
Adverse conditions such as social upheaval, erosion of the rule of law or travel restrictions
could reduce a location’s competitiveness and impact the Group’s businesses which have
concentrated operations in that jurisdiction.
Mitigation
Geographical diversification of the business through organic growth.
Maintaining financial strength under challenging scenarios.
Further strengthening the Group’s brand to sustain competitiveness and resilience.
Commercial risk Description
The Group operates within the highly competitive global hotel industry. Failure to compete
effectively in terms of product quality, service levels, or price can adversely affect earnings.
This may also include failure to adapt to rapidly evolving customer preferences and
expectations. Significant competitive pressure or the oversupply of hotel rooms in a specific
market can reduce margins. Advances in technology creating new or disruptive competitive
pressures might also negatively affect the trading environment.
The Group competes with other luxury hotel operators for new opportunities in the areas
of hotel management, residences management and residences branding. Failure to establish
and maintain relationships with hotel owners or developers could adversely affect the
Group’s business.
The Group also makes investment decisions regarding acquiring new hotel properties and
undertaking significant renovations or redevelopments in its owned properties, exposing
it to construction risks. The success of these investments is measured over the longer term
and, as a result, is subject to market risk.
Mandarin Oriental’s continued growth depends on opening of new hotels and branded
residences. Most of the Group’s new developments are controlled by third-party owners and
developers. As a result, they can be subject to delays due to issues attributable to planning
and construction, sourcing of finance, and the sale of residential units. In extreme
circumstances, such factors might lead to the cancellation of a project.
130 Mandarin Oriental International Limited
Commercial risk
continued
Mitigation
Utilise market intelligence and deploy strategies for business-to-consumer business.
Establish customer relationship management and digital commerce capabilities.
Engage in longer-term contracts and proactively approach suppliers for contract renewals.
Re-engineer existing business processes to take advantage of new technological capabilities.
Invest in and partner with companies that can provide the Group access to different
capabilities and technologies.
Environmental
and climate risk
Description
Environmental disasters such as earthquakes, floods and typhoons can damage the Group’s
assets and disrupt operations. Global warming-induced climate change has increased
the frequency and intensity of storms, leading to higher insurance premiums or reduced
coverage for such natural disasters.
With governments also taking a more proactive approach towards carbon taxes, renewable
energies and electric vehicles, additional investments, and efforts to address physical and
transition risks of climate change are anticipated from businesses.
With interest in sustainability surging in recent years from investors, governments and the
general public, expectations by regulators and other stakeholders for accurate corporate
sustainability reporting and commitments towards carbon neutrality to address climate
change are also growing. This brings increasing challenges to the Group to meet key
stakeholders’ expectations.
There is potential for negative publicity and operational disruption arising from conflict
between activists and the Group’s business that is perceived to be engaged in trade and
activities that are environmentally unfriendly.
Mitigation
Executive Advisory Panel, Sustainability Leadership Council and Hotel Sustainability
Committees have been in place to mobilise and coordinate sustainability efforts across
the Group.
A sustainability strategy framework, including a pillar for the planet, drives the Group’s
sustainability agenda.
Renewed environmental targets for 2025 and 2030 have been determined per property
through a Group-wide inventory management plan.
Identify environmental impact opportunities that address multiple problems and risks and
gaps that are generally relevant to all properties and society in general.
Assess emerging Environmental, Social and Governance (‘ESG’) reporting standards and
requirements, to align Group disclosures to best market practice.
Conduct climate risk assessments and adaptation action plans based on recommendations
of Task Force on Climate-Related Financial Disclosures (‘TCFD’), including implementing
measures to address physical risks posed by climate change and identifying opportunities
in global transition to a low carbon economy.
Principal risks and uncertainties c ontinued
131Annual Report 2022
Corporate Governance Continued
Principal risks and uncertainties c ontinued
Financial strength
and funding
Description
The Group’s activities expose it to a variety of risks to its financial strength and funding,
including market risk, credit risk and liquidity risk.
The market risk the Group faces includes i) foreign exchange risk from future commercial
transactions, net investments in foreign operations and net monetary assets and liabilities
that are denominated in a currency that is not the entity’s functional currency; ii) interest
rate risk through the impact of rate changes on interest bearing assets and liabilities;
and iii) securities price risk as a result of its equity investments and limited partnership
investment funds which are measured at fair value through profit and loss, and debt
investments which are measured at fair value through other comprehensive income.
The Group’s credit risk is primarily attributable to deposits with banks, contractual cash flows
of debt investments carried at amortised cost and those measured at fair value through
other comprehensive income, credit exposures to customers and derivative financial
instruments with a positive fair value.
The Group may face liquidity risk if its credit rating deteriorates or if it is unable to meet its
financing commitments.
Mitigation
Set clear policies and limits on market, credit, and liquidity risks, including in relation
to foreign exchange exposure, interest rate risks, cash management and prohibition on
derivatives not used in hedging.
Regular internal audits of compliance with treasury policies.
Adopt appropriate credit guidelines to manage counterparty risk.
When economically feasible, take borrowings in local currency to hedge foreign
exchange exposures on investments.
Fix a portion of borrowings in fixed rates.
Maintain adequate headroom in committed facilities to facilitate the Group’s capacity
to pursue new investment opportunities and to provide some protection against
market uncertainties.
Keep an appropriate funding balance between equity and debt from banks and capital
markets, both short and long term in tenor, to give flexibility to develop the business.
Maintain sufficient cash and marketable securities, and availability of funding
from an adequate amount of committed credit facilities and the ability to close out
market positions.
The Group’s treasury operations are managed as cost centres and are not permitted to
undertake speculative transactions unrelated to underlying financial exposures.
The detailed steps taken by the Group to manage its exposure to financial risk are set out in
the Financial Review on pages 29 to 33 and note 35 to the financial statements on pages 87
to 94.
132 Mandarin Oriental International Limited
Principal risks and uncertainties c ontinued
Governance and
misconduct
Description
Effective management of the Group’s risks depends on the existence of an appropriate
governance structure, tone from top leadership, and functioning system of internal
controls. Ethical breaches, management override of controls, employee fraud and
misconduct, or other deficiencies in governance and three lines of internal controls
may result in financial loss and reputational damage for the Group.
Inadequate capability and diversity in management or the Board may also lead to
sub-optimal deliberations and decisions.
Mitigation
Established Group-wide mandatory code of conduct.
Maintain a robust Corporate Governance Framework which includes
a whistleblowing channel.
Maintain functionally independent internal audit function that reports to the Group
Audit Committee on risk management, the control environment and significant
non-compliance matters.
Maintain Professional Indemnity, Crime and General Liability insurance policies with
adequate coverage.
Health, safety, and
product quality
Description
The Group’s colleagues engage in physical activities that may lead to serious injury or
fatal incidents if work conditions are unsafe or workers do not take due care to observe
safety procedures.
The safety and quality of food products and other items provided by the Group are
fundamental to its reputation with customers. Any actual or perceived deficiency in product
safety or quality may damage consumer confidence and the brand’s reputation, leading to
financial loss.
Mitigation
Establish safe working environments and regular safety training for all employees
and subcontractors.
Establish contractual requirements for contractors to comply with high expected levels
of safety standards.
Conduct occupational health and safety awareness campaigns.
Establishing product quality and safety standards, guidelines.
Ensure suppliers follow the Group’s guidelines, principals’ requirements, and
local regulations.
133Annual Report 2022
Corporate Governance Continued
Principal risks and uncertainties c ontinued
IT and cybersecurity Description
The Group’s business is ever more reliant on technology in their operations and
faces increasing cyber-attacks from groups targeting both individuals and businesses.
As a result, the privacy and security of customer and corporate information are at
risk of being compromised through a breach of our or our suppliers’ IT systems or the
unauthorised or inadvertent release of information, resulting in brand damage, impaired
customer trust, loss of competitiveness or regulatory action.
Cyber-attacks stemming from inadequate cybersecurity or lack of employee cybersecurity
awareness may also adversely affect the Group’s ability to manage daily business operations,
resulting in business interruption, reputational damage, regulatory penalties, lost revenues,
repair or other costs.
Mitigation
Engage external consultants to perform assessments on the business with
industry benchmarks.
Define cybersecurity programme and centralised function to provide oversight,
promote cybersecurity hygiene, strengthen cybersecurity defences and manage
cybersecurity incidents.
Perform regular vulnerability assessment and penetration testing to identify weaknesses.
Maintain disaster recovery plans and backup for data restoration.
Arrange regular security awareness training at least annually and phishing testing to
raise users’ cybersecurity awareness.
Conduct regular internal audits of IT general controls and cybersecurity.
Pandemic Description
COVID-19 has demonstrated the wide-ranging and long-lasting impacts and disruptions
for businesses, communities and employees that may result from the spread of a pandemic.
While the governments and businesses have gained experience from COVID-19 in
preparing for and responding to future pandemic scenarios, nevertheless significant
disruptions and uncertainties would likely result from global or regional pandemics
of a similar nature if they raise the prospect of lockdowns, restrictions on cross-border
mobility, interruptions to supply chains, and dampened consumer sentiment while
vaccines are unavailable.
Mitigation
Increase flexibility and resilience of work arrangements, including tools that enable
employees to effectively work from home, where possible.
Test business continuity plans periodically for various scenarios including loss of
premises, systems, people, and extended periods of split teams.
Increase resilience of supply chain with sourcing alternative suppliers for key inputs and
close coordination with logistics partners.
134 Mandarin Oriental International Limited
Principal risks and uncertainties c ontinued
Political and
economic risk
Description
Changes and uncertainties in the political landscape pose risks for business activity and
sentiment in the territories where the Group operates and consequently for the current
investments and future growth of the Group. In recent years, sources of uncertainty include
geopolitical tensions between China and the United States, terrorism, and government
instability in parts of Southeast Asia. Rising costs of fuel and staple foods are particularly
sensitive for developing markets where the Group operates, heightening the risk of civil
discontent and political instability. The imposition of export bans by some governments on
food and raw materials adds further uncertainties in the availability and cost of supplies for
the Group’s hotels and residences that import these items.
The Group’s business is exposed to the risk of adverse developments in global and regional
economies and financial markets, either directly, or through the impact such developments
might have on the Group’s joint venture partners, associates, bankers, suppliers, or
customers. These developments could include recession, inflation, deflation, currency
fluctuations, restrictions in the availability of credit, business failures, or increases in
financing costs, oil prices or the cost of raw materials. Such developments might increase
operating costs, reduce revenues, lower asset values or result in some or all of the Group’s
hotels and residences being unable to meet their strategic objectives.
Mitigation
Maintain the Group’s financial strength and funding sources under scenarios of
economic downturn and other stresses.
Monitor the volatile macroeconomic environment and consider economic factors in
strategic and financial planning processes.
Make agile adjustments to existing business plans and explore new business streams and
new markets.
Review pricing strategies and keep conservative assumptions on global commodity prices.
Insurance programme covering business interruption due to civil unrest.
People and talent Description
The competitiveness of the Group depends on the quality of the people that it attracts and
retains. The unavailability of needed human resources may impact the ability of the Group
to operate at capacity, implement initiatives and pursue opportunities.
The pandemic has accelerated corporate investments in digital projects and stimulated
global consumer demand for e-commerce. This has created heightened demand and
competition across industries for various skillsets. Pandemic-related travel restrictions and
a more stringent approach to issuing work visas to non-locals in some of the key markets
have also disrupted the availability of labour across borders, exacerbating labour shortages
as economies rebound.
Recent and future workforce rationalisation may raise the potential for organisational gaps
in capabilities, succession and controls.
With worker preferences shifting towards greater importance attached to mental health
and well-being, the Group faces heightened risk for talent attraction and retention if they
cannot adapt their propositions for workers.
135Annual Report 2022
Corporate Governance Continued
People and talent
continued
Mitigation
Support workforce practices that promote well-being and flexible work arrangements
that are competitive with the market.
Ensure proactive manpower planning and succession planning are in place.
Enhance modern employer branding, training for staff members, compensation, and
benefits, including retention incentives.
Implement strategy to promote diversity and inclusion across the Group.
Establish employee assistance and counselling programmes.
Enhance talent development plans to increase employees’ visibility on future career
paths, including identifying strategic talent pools.
Delivering new learning programmes to equip staff with finance, procurement, HR,
digital, IT and innovation technical capabilities for business transformation.
Compliance with
and changes to laws
and regulations
Description
The Group’s business is subject to several regulatory regimes in the territories they
operate in. New or changing laws and regulations in a wide range of areas such as foreign
ownership of assets and businesses, exchange controls, building and environmental
standards, competition, tax, employment, and data privacy could potentially impact
the operations and profitability of the Group’s business. Non-compliance may lead to
reputational damage from media exposure and financial loss due to litigation or penalties
by government authorities.
Mitigation
Engage legal experts at early stage to assess implications of new rules.
Stay connected and informed of relevant new and draft regulations.
Engage external consultants where necessary.
Raise awareness via principals’ brand conference with an annual update on new
regulations that may have been implemented in other markets.
Lobby relevant associations and authorities through appropriate channels.
Perform early scenario planning to assess implications of new rules and prepare
for contingencies.
Effectiveness review of risk management and internal control systems
The effectiveness of the Company’s risk management and internal control systems is monitored by the internal audit
function, which reports functionally to the Audit Committee of the Group. The findings of the internal audit function
and recommendations for any corrective action required are reported to the Audit Committee and, if appropriate, to
the Jardine Matheson Audit Committee.
Principal risks and uncertainties c ontinued
136 Mandarin Oriental International Limited
Financial calendar
2022 full-year results announced 2nd March 2023
Annual General Meeting to be held 4th May 2023
2023 half-year results to be announced 28th July 2023 *
Shares quoted ex-dividend 17th August 2023 *
Share registers to be closed 21st to 25th August 2023 *
2023 interim dividend payable 11th October 2023 *
* Subject to change
Dividends
In light of the modest level of underlying profit, no final dividend in respect of the 2022 financial year will be paid.
Registrars and transfer agent
Shareholders should address all correspondence with regard to their shareholdings or dividends to the appropriate
registrar or transfer agent.
Principal Registrar
Jardine Matheson International Services Limited, P.O. Box HM 1068, Hamilton HM EX, Bermuda
Jersey Branch Registrar
Link Market Services (Jersey) Limited, 12 Castle Street, St Helier, Jersey JE2 3RT, Channel Islands
Singapore Branch Registrar
M & C Services Private Limited, 112 Robinson Road #05-01, Singapore 068902
United Kingdom Transfer Agent
Link Group, 10th Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL, United Kingdom
Press releases and other financial information can be accessed through the internet at www.mandarinoriental.com.
Shareholder Information
137Annual Report 2022
Mandarin Oriental Hotel Group Contact Addresses
Hong Kong Corporate Office
8th floor One Island East
Taikoo Place
18 Westlands Road
Quarry Bay, Hong Kong
Telephone +852 2895 9288
mandarinoriental.com
Asia
Mandarin Oriental, Bangkok
48 Oriental Avenue
Bangkok 10500
Thailand
Telephone +66 (0) 2 659 9000
Email mobkk-reservations
@
mohg.com
Mandarin Oriental Wangfujing, Beijing
No. 269 Wangfujing Street, Dongcheng District
Beijing 100006, China
Telephone +86 (10) 8509 8888
Email mowfj-reservations
@
mohg.com
Mandarin Oriental, Guangzhou
389 Tianhe Road, Tianhe District
Guangzhou 510620, China
Telephone +86 (20) 3808 8888
Email mogzh-reservations
@
mohg.com
Mandarin Oriental, Hong Kong
5 Connaught Road Central
Hong Kong
Telephone +852 2522 0111
Email mohkg-reservations
@
mohg.com
The Landmark Mandarin Oriental, Hong Kong
The Landmark
15 Queen’s Road Central
Hong Kong
Telephone +852 2132 0188
Email lmhkg-reservations
@
mohg.com
Mandarin Oriental, Jakarta
Jalan M H Thamrin
Jakarta 10310
Indonesia
Telephone +62 (21) 2993 8888
Email mojkt-reservations
@
mohg.com
Mandarin Oriental, Kuala Lumpur
Kuala Lumpur City Centre
50088 Kuala Lumpur
Malaysia
Telephone +60 (3) 2380 8888
Email mokul-reservations
@
mohg.com
Mandarin Oriental, Macau
N.945, Avenida Dr Sun Yat Sen
NAPE, Macau, China
Telephone +853 8805 8888
Email momac-reservations
@
mohg.com
Mandarin Oriental, Sanya
12 Yuhai Road
Sanya 572000
Hainan, China
Telephone +86 (898) 8820 9999
Email mosan-reservations
@
mohg.com
Mandarin Oriental Pudong, Shanghai
111 Pudong Road (S), Pudong
Shanghai 200120, China
Telephone +86 (21) 2082 9888
Email mopud-reservations
@
mohg.com
Mandarin Oriental, Shenzhen
No. 5001 Huanggang Road
Futian District, Shenzhen
Guangdong 518036, China
Telephone +86 (755) 8802 6888
Email moszn-reservations
@
mohg.com
138 Mandarin Oriental International Limited
Mandarin Oriental, Singapore
5 Raffles Avenue, Marina Square
Singapore 039797
Telephone +65 6338 0066
Email mosin-reservations
@
mohg.com
Mandarin Oriental, Taipei
No. 158 Dunhua North Road
Taipei 10548, Taiwan
Telephone +886 2 2715 6888
Email motpe-reservations
@
mohg.com
Mandarin Oriental, Tokyo
2-1-1 Nihonbashi Muromachi, Chuo-ku
Tokyo 103-8328, Japan
Telephone +81 (0) 3 3270 8800
Email motyo-reservations
@
mohg.com
E
UROPE
, M
IDDLE
E
AST
AND
A
FR ICA
Emirates Palace Mandarin Oriental, Abu Dhabi
West Corniche Road
Abu Dhabi, United Arab Emirates
Telephone +971 2 690 8888
Email epauh-reservations
@
mohg.com
Mandarin Oriental, Barcelona
Passeig de Gràcia, 38-40
08007 Barcelona, Spain
Telephone +34 93 151 88 88
Email mobcn-reservations
@
mohg.com
Mandarin Oriental, Bodrum
Gölköy Mahallesi 314
Sokak No. 10, 48483,
Bodrum, Muğla, Turkey
Telephone +90 (252) 311 18 88
Email mobod-reservations
@
mohg.com
Mandarin Oriental, Doha
Barahat Msheireb Street
Msheireb Downtown Doha
PO Box 23643
Doha, Qatar
Telephone +974 4008 8888
Email modoh-reservations
@
mohg.com
Mandarin Oriental Jumeira, Dubai
Jumeirah Beach Road, Jumeira 1
PO Box 62092
Dubai, United Arab Emirates
Telephone +971 4 777 2222
Email modub-reservations
@
mohg.com
Mandarin Oriental, Geneva
Quai Turrettini 1
1201 Geneva, Switzerland
Telephone +41 (22) 909 0000
Email mogva-reservations
@
mohg.com
Mandarin Oriental Bosphorus, Istanbul
Kuruçeşme, Muallim Naci Caddesi No: 62
34345 Beşiktaş, İstanbul, Turkey
Telephone +90 212 349 8888
Email moist-reservations
@
mohg.com
Mandarin Oriental, Lago di Como
Via Caronti, 69
22020 Blevio (Co)
Italy
Telephone +39 031 32 511
Email mocmo-reservations
@
mohg.com
Mandarin Oriental Hyde Park, London
66 Knightsbridge
London, SW1X 7LA
United Kingdom
Telephone +44 (0) 20 7235 2000
Email molon-reservations
@
mohg.com
139Annual Report 2022
Mandarin Oriental Palace, Luzern
Haldenstrasse 10
6002 Lucerne, Switzerland
Telephone +41 41 588 1888
Email molzn-reservations
@
mohg.com
Mandarin Oriental Ritz, Madrid
Plaza de la Lealtad 5
28014 Madrid, Spain
Telephone +34 91 701 67 67
Email mrmad-reservations
@
mohg.com
Mandarin Oriental, Marrakech
Route du Golf Royal
40 000 Marrakech, Morocco
Telephone +212 5 24 29 88 88
Email momrk-reservations
@
mohg.com
Mandarin Oriental, Milan
Via Andegari 9
20121 Milan, Italy
Telephone +39 02 8731 8888
Email momln-reservations
@
mohg.com
Mandarin Oriental, Munich
Neuturmstrasse 1
80331 Munich, Germany
Telephone +49 (89) 290 980
Email momuc-reservations
@
mohg.com
Mandarin Oriental, Paris
251 rue Saint-Honoré
75001 Paris, France
Telephone +33 (0)1 70 98 78 88
Email mopar-reservations
@
mohg.com
Mandarin Oriental, Prague
Nebovidská 459/1, Malá Strana
118 00 Prague, Czech Republic
Telephone +420 233 088 888
Email moprg-reservations
@
mohg.com
Al Faisaliah Hotel, Riyadh
PO Box 4148
King Fahad Road, Al Olaya
Riyadh 12212
Saudi Arabia
Telephone +966 11 273 2000
Email moryd-reservations
@
mohg.com
America
Mandarin Oriental, Boston
776 Boylston Street
Boston, Massachusetts 02199, USA
Telephone +1 (617) 535 8888
Email mobos-reservations
@
mohg.com
Mandarin Oriental, Canouan
Carenage Bay, Canouan Island VC0450
Saint Vincent and the Grenadines
Telephone +1 (212) 461 8068
Email mocan-reservations
@
mohg.com
Mandarin Oriental, Miami
500 Brickell Key Drive
Miami, Florida 33131, USA
Telephone +1 (305) 913 8288
Email momia-reservations
@
mohg.com
Mandarin Oriental, New York
80 Columbus Circle
New York, New York 10023, USA
Telephone +1 (212) 805 8800
Email monyc-reservations
@
mohg.com
Mandarin Oriental, Santiago
Avenida Presidente Kennedy 4601
7560994 Las Condes, Santiago, Chile
Telephone +56 2 2950 3088
Email mostg-reservations
@
mohg.com
Mandarin Oriental Hotel Group Contact Addresses Continued
140 Mandarin Oriental International Limited
mandarinoriental.com
Mandarin Oriental International Limited