THE AMBASSADOR HOTEL 2014 BUSINESS REVIEW Stock Code:：2704 Business Strategy 1. To follow the successful business brand model of the amba with concepts of technology,environmental protection and innovation. 2. To build the shared service center to enhance the revenue of company effectively. 3. In order to be more competitive in the market of food and beverage we plan to remodel the restaurant as one of improvement. 1 Inbound visitor statistics Place of residence Item 2009 2010 2011 2012 2013 2014/1-3Q Visitors 972,123 1,630,735 1,784,185 2,586,428 2,874,702 2,959,916 Mainland China Growth Rate 195.30% 67.75% 9.41% 44.96% 11.15% 35.96% Visitors 718,806 794,362 817,944 1,016,356 1,183,341 1,046,086 Hong Kong/Macao Growth Rate 16.19% 10.51% 2.97% 24.26% 16.43% 19.70% Visitors 1,000,661 1,080,153 1,294,758 1,432,315 1,421,550 1,189,787 Japan Growth Rate -7.92% 7.94% 19.87% 10.62% -0.75% 17.64% Visitors 167,641 216,901 242,902 259,089 351,301 381,197 Korea Growth Rate -33.55% 29.38% 11.99% 6.66% 35.59% 66.45% Visitors 795,853 1,059,909 1,124,421 1,179,496 1,307,892 1,000,384 Asia Growth Rate -0.39% 32.24% 5.99% 4.90% 10.89% 13.44% Visitors 442,036 474,709 495,136 497,597 502,446 406,240 America Growth Rate -4.17% 7.39% 4.30% 0.50% 0.97% 13.69% Visitors 197,070 203,301 212,148 218,045 223,062 191,236 Europe Growth Rate -1.91% 3.16% 4.35% 2.78% 2.30% 19.36% Visitors 66,173 71,953 70,540 75,414 77,722 64,751 Oceania Growth Rate -3.47% 8.73% -1.96% 6.91% 3.06% 22.59% Visitors 7,735 8,254 8,938 8,865 8,795 7,690 Africa Growth Rate -8.99% 6.71% 8.29% -0.82% -0.79% 17.48% Visitors 26,906 26,000 36,512 37,865 65,469 4,876 Others Growth Rate 33.42% -3.37% 40.43% 3.71% 72.90% -90.50% Visitors 4,395,004 5,567,277 6,087,484 7,311,470 8,016,280 7,252,163 Total Growth Rate 14.30% 26.67% 9.34% 20.11% 9.64% 25.01% 2 Hotel Occupancy Rates% & Average Room Rate 2011 2012 2013 2014/1-3Q Hotel Average Hotel Average Hotel Average Hotel Average Number Region Occupancy Room Occupancy Room Occupancy Room Occupancy Room of Rooms Rates% Rate Rates% Rate Rates% Rate Rates% Rate Taipei 10,353 75.45% 3,823 78.04% 4,097 76.47 4,379 75.99% 4,463 Kaohsiung 3,854 66.53% 2,405 67.08% 2,430 66.14 2,464 70.34% 2,402 Taichung 1,473 71.36% 2,376 76.23% 2,425 68.61 2,516 67.73% 2,473 Hualien 1,382 61.21% 2,431 63.36% 2,299 59.98 2,521 69.40% 2,541 Scenic area 2,430 59.37% 4,431 60.54% 4,561 61.41 4,793 63.75% 5,002 Taoyuan. Hsinchu. 3,254 62.37% 2,346 66.96% 2,418 67.63 2,500 69.43% 2,567 Miaoli Others 3,509 60.97% 3,082 59.54% 3,262 63.21 3,330 64.35% 3,541 Total 25,517 68.10% 3,281 69.99% 3,445 69.28 3,621 70.74% 3,698 Kaohsiung：Ambassador Hotel kaohsiung、The Splendor Kaohsiung、Grand Hi-LaIHotel、Howard Kaohsiung、Hotel Kingdom Kaohsiung、 Hotel Holiday Garden、Han-HsienInternational Hotel、The Lees Hotel. Taichung：Hotel National、Plaza International Hotel、The Splendor Taichung、Evergreen Laurel Hotel Taichung、Windsor Hotel Taichung、Howard Taichung Taipei：Howard Taipei、Ambassador Hotel Taipei、The Grand Hotel、Imperial Hotel Taipei、Far Eastern Plaza Hotel (Taipei)、The Westin Taipei、The LeofooHotel、Sheraton Taipei Hotel、The Regent Taipei、Gloria Prince Hotel、The Sherwood Hotel Taipei、Brother Hotel、The Landis Taipei Hotel、First Hotel、AstarHotel、The Riviera Hotel、Hotel Riverview Taipei、Gala Hotel、Cosmos Hotel、Grand Hyatt Taipei、Hotel Flowers、Caesar Park Hotel Taipei、 Emperor Hotel、Empress Hotel、Golden China Hotel、San Want Hotel、Santos Hotel 3 Tourist hotels statistics International Standard Standard Hotels Abuilding Tourist Hotels Tourist Hotels Number Number Number Number No. of Hotel No. of Hotel No. of Hotel No. of Hotel Rooms Rooms Rooms Rooms Taipei 25 8,313 15 2,280 403 18,969 5 805 Kaohsiung 10 3,616 1 250 368 16,737 3 1,310 Hsinchu 3 851 1 389 91 4,284 Total 70 20,585 40 5,613 2,853 124,660 44 10,483 4 Tourist hotels analysis International tourist Standard tourist hotels Standard hotels total hotels tourist hotels total Number Number Number Number of Number of No. of hotel No. of hotel No. of hotel No. hotel No. hotel rooms rooms rooms rooms rooms Taipei Sep-14 25 8,313 15 2,280 40 10,593 406 19,055 446 29,648 Dec-11 25 8,323 14 2,040 39 10,363 332 15,024 371 25,387 Jul-08 23 7,777 10 1,383 33 9,160 319 12,931 352 22,091 Diff 2 536 5 897 7 1,433 87 6,124 94 7,557 % 8.70 6.89 50.00 64.86 21.21 15.64 27.27 47.36 26.70 34.21 Kaohsiung Sep-14 10 3,616 1 250 11 3,866 368 16,950 379 20,816 Dec-11 10 3,616 1 250 11 3,866 349 15,179 360 19,045 Jul-08 8 2,853 8 2,853 241 11,680 249 14,533 Diff 2 763 1 250 3 1,013 127 5,270 130 6,283 % 25.00 26.74 37.50 35.51 52.70 45.12 52.21 43.23 Others Sep-14 72 20,585 40 5,613 112 26,198 2,875 126,895 2,987 153,093 Dec-11 70 20,382 36 4,951 106 25,333 2,692 110,772 2,798 136,105 Jul-08 59 17,497 31 3,555 90 21,052 2,681 104,315 2,771 125,367 Diff 13 3,088 9 2,058 22 5,146 194 22,580 216 27,726 % 22.03 17.65 29.03 57.89 24.44 24.44 7.24 21.65 7.80 22.12 5 Visitor Arrivals by Purpose of Visit Total Business Tourism Visit Relatives Educayion Meeting Others 2013 11.57 68.35 5.86 0.95 0.77 12.50 100.00 2012 12.22 63.97 6.08 0.86 0.86 16.01 100.00 2011 16.18 59.69 8.22 1.03 1.34 13.54 100.00 2010 16.84 58.30 8.92 1.13 1.59 13.22 100.00 2009 18.10 52.29 9.42 1.24 1.57 17.38 100.00 2008 22.92 46.17 10.52 1.54 1.18 17.67 100.00 2007 25.05 44.36 10.65 1.13 1.56 17.25 100.00 6 7 Company history In response to the government’s policy of developing Taiwan’s tourism industry, the 1962 Ambassador Hotel Taipei is incorporated. Its goal is to establish the first international- standard hotel in Taiwan, with an investment of NT$60million. 1964 The hotel opens its head office on the present site of the Ambassador Hotel Taipei. In response to the government’s policy of developing the tourism industry in southern Taiwan, the Ambassador Hotel Kaoshiung is founded. 1978 Stock dividends are paid to Ambassador Hotel shareholders. The Ambassador Hotel Taipei initiates an expansion project. 1979 The Ambassador Hotel Taipei expansion project is completed. 1981 The Ambassador Hotel Kaoshiung officially opens. 1982 Ambassador Hotel shares are listed on the Taiwan Stock Exchange. The Ambassador Hotel Taipei and Kaoshiung are both rated as “Five Plum” tourist hotels 1983 by Taiwan’s Tourism Bureau. 8 Company history The Ambassador Hotel is graded “Deluxe Class” by SRS-WORLDHOTELS and awarded the 1994 Excellent Welfare Organization Prize of by the Department of Labor, Taipei City Government. 1996 Construction of the Ambassador Hotel Hsinchu gets under way. 1997 The Ambassador Hotel Kaohsiung receives the first Golden Enterprise Service Award. The group wins the “Five Star Award” in the national competition of Labor Safety & Health Excellent 1998 Organization, held by the Council of Labor Affairs, Executive Yuan Taiwan. The group is awarded a two-year honor certification of Safety & Health Self-Protection System Business Organization. 1999 The group wins an Excellent Staff Award in a competition held by the Labor Safety & Health Group Organization. 2000 The hotels obtains ISO9001 quality certification, the first five-star tourist hotel in northern Taiwan to do so. 2001 The Ambassador Hotel Hsinchu opens and joins the group. 2003 The Ambassador Hotel Taipei wins the Best Award of Taipei City Hotel Japanese Lecture & Testing. 9