Lotte Group has hired Ahn Se-jin, the new general manager of the hotel business division, through a regular executive reshuffle in 2022. The hotel business sector was hit directly after the COVID-19 crisis and desperately needed business reconstruction and change. Accordingly, it is understood that Chairman Shin Dong-bin hired General Representative Ahn to prepare for the listing of Hotel Lotte, which is his long-awaited business.
The listing of Hotel Lotte is a decisive step for Lotte to break the cycle of circular investment through corporate governance restructuring. In order to improve the opaque governance structure and to completely separate from Lotte Japan, Hotel Lotte, at the peak of its governance structure, must be listed.
Bong-cheol Lee, head of the Hotel & Resorts BU, who stepped down from the front line of management, has been evaluated as a suitable person for preparing for an initial public offering (IPO) as a financial expert. However, due to the COVID-19 outbreak, earnings improvement was not achieved, and the IPO plan was virtually halted.
General Ahn, who was recruited this time, will be given a heavy duty for business reorganization and normalization along with long-term IPO promotion.
Ahn, a former global consulting firm Kerney, was in charge of new business and business strategies at LG Group and LS Group. In addition, he served as the CEO of Nolbu at Morgan Stanley PE, and he has extensive management expertise. Based on this, it is expected to lead the brand strengthening and corporate value improvement of the hotel business group.
In particular, CEO Ahn is expected to put all his efforts into rebuilding the duty-free business division, which accounts for more than 80% of sales. Last year, Hotel Lotte’s consolidated sales amounted to 3.84 trillion won, halved from the previous year’s 7.4 trillion won. The operating loss was 497.6 billion won, turning to the red. In the third quarter of this year, it still recorded an operating loss of 247.6 billion won.
However, the outlook for the duty free shop market next year is generally positive. Due to the recent implementation of With Corona, business restrictions have been eased and overseas travel has resumed, making the duty-free shop industry a bit more breath-taking. There are also signs of recovery. According to the Korea Duty Free Shop Association, duty-free shop sales in September recorded 1.76 trillion won, up 15.7 percent from 1.526 trillion won the previous month.
This year, discussions have been underway on the travel bubble between advanced countries in quarantine (a system in which two or more countries give each other an exemption from self-quarantine to promote travel), and the introduction of incentives for vaccinated people in Korea is also raising expectations for recovery.
In addition, the introduction of the Headquarters (HQ) system instead of the existing Business Unit (BU) system is also analyzed to give strength to General Representative Ahn.
A Lotte Group official said, “We expect that this reorganization will enable faster decision-making, thereby strengthening organizational competitiveness.”
Reporter Hyogi Park phj20@etnews.com
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