Walkerhill Hotel & Resort (Walkerhill) is speeding up revenue diversification as it cements a return to profitability after restructuring. It had long been labeled SK Networks' "sore finger" as losses piled up, but performance has been gradually improving through efforts such as workforce reductions and expense cuts to strengthen its fundamentals.
According to related industry sources on the 19th, Walkerhill's full-year revenue last year was 322.9 billion won, up 7.4% from a year earlier. Operating profit for the same period came to 21.1 billion won, up 2.9%. Fourth-quarter revenue last year was 90.8 billion won, up 17.4% on-year, and operating profit was 7.7 billion won, up 44.5%.
With overall hotel operations and external business revenue growing together, analysts said operating profit expanded as fixed cost reductions and operational efficiencies were fully reflected. The average room occupancy rate also showed a recovery. It fell short of 60% in the first quarter last year, but continued to rise to 67.8% in the second quarter, 80.3% in the third quarter, and 78% in the fourth quarter.
Walkerhill had been in the red for an extended period due to the impact of COVID-19. From the first quarter of 2020 to the second quarter of 2022, it posted a cumulative operating loss of 78.2 billion won over roughly three years. It returned to the black in the third quarter of 2022 on the back of expense structure reforms and recovering demand, and it has maintained a stable profit trend.
As it exits the deficit tunnel, the company is accelerating revenue diversification while strengthening its core competitiveness. Alongside bolstering food and beverage (F&B) operations, events, and experiential content at the hotel, it is also increasing sales of its own branded products such as kimchi and home meal replacement (HMR) items. The aim is to expand its portfolio from a simple room-centered revenue structure to various businesses based on the hotel brand.
Early last year, Walkerhill launched the industry's first brand-dedicated application, Walkerhill Store. It sells living goods ranging from kimchi and meal kits made with hotel chef recipes to bedding and towels. In September, it also exported kimchi to the United States for the first time among domestic hotels.
Expanding touchpoints with foreigners, whose inflow into the country has increased in recent years, is also a key task. Walkerhill Hotel still has a high ratio of domestic guests, but it is broadening its foreign customer base through operations at Incheon International Airport. Walkerhill currently operates a capsule hotel, lounges, and a Korean restaurant at the airport.
In fact, foreign demand is on the rise for Darakhyu, the capsule hotel at Incheon Airport. The share of foreign guests at Darakhyu rose to 36% last year from 28% in 2024. The increase appears to be driven by more transit passengers and growing demand for overseas travel.
Walkerhill also plans to gradually expand its management contract business. Under such contracts, a core business model for global hotel chains, revenue is generated by managing external facilities based on the hotel brand and operational know-how. Last year, Walkerhill signed a brand-use agreement with Gyeongwonjae, a hanok hotel in Incheon.
Meanwhile, SK Networks' results worsened last year due to weakness in major businesses outside hotels. SK Networks posted revenue of 6.7451 trillion won last year, down 11.9% from a year earlier, and operating profit of 86.3 billion won, down 24.2%. Fourth-quarter revenue and operating profit were 1.6195 trillion won, down 12.4% on-year, and 4.4 billion won, down 87.9%, respectively.