Singha upbeat on outlook for hotels

Singha upbeat on outlook for hotels

Developer banking on tourism revival in Thailand, Mauritius and Fiji

Outrigger Mauritius Beach Resort, a 181-room resort, saw its occupancy rate reach 40% in the first month it reopened.
Outrigger Mauritius Beach Resort, a 181-room resort, saw its occupancy rate reach 40% in the first month it reopened.

SET-listed developer Singha Estate expects the tourism sector in Thailand, Mauritius and Fiji to rebound by the second quarter of 2022, helping to revive its hotel business in the three countries.

Chairath Sivapornpan, chief financial officer, said the company projects a turnaround for its Thai hotels the rest of the year, seeing positive earnings before interest, taxes, depreciation and amortisation (Ebitda).

"There were good signs after Thailand reopened earlier this month," he said. "Our two hotels, Saii Phi Phi Island Village and Saii Laguna Phuket, will resume operations in December and this momentum will carry through in 2022."

In Mauritius the company has a 181-room resort, and the occupancy rate reached 40% the first month it reopened, driven by strong pent-up demand, he said. The borders were fully reopened to vaccinated foreign visitors from Oct 1.

The company expects a healthy recovery in the fourth quarter of 2021 and the beginning of next year, contributed by tourists from the UK and France, Mr Chairath said.

Next month, Fiji is expected to reopen to fully vaccinated travellers. As a result, the company expects a V-shaped recovery for Castaway Fiji in December, with target international markets including Australia, New Zealand, the US and Canada.

"We received bookings for 60% occupancy in January from travellers from Australia and New Zealand," he said. "Our two hotels in Fiji should have robust bookings in the second quarter of 2022, which is the high season."

During the first nine months of 2021, the company's revenue from hotel business relied solely on hotels in the UK and the Maldives, contributing 95% of total revenue.

Mr Chairath said revenue per available room (RevPAR) for its hotels in the UK in the third quarter reached 95% of that in the pre-pandemic era, helping to improve the bottom line.

"Domestic demand in the UK drove the growth," he said. "Room rates will be higher throughout next year and we expect RevPAR will exceed the 2019 level by the end of 2022."

In the Maldives, the occupancy rate of its Crossroads hotel and resort was 60%, causing optimism for the upcoming year-end holiday season and the beginning of 2022. The hope is the average daily rate can achieve pre-pandemic levels in the fourth quarter of 2021, said Mr Chairath.

He said typically, hotel revenue from the UK accounts for 35% of the total, the Maldives makes up 30%, and hotels in Thailand, Fiji and Mauritius represent 20%, 10% and 5%, respectively.

In the first nine months of 2021, Singha Estate recorded 1.5 billion baht in net profit, down 16% from the same period last year, on revenue of 5.14 billion baht, a gain of 5% based on revenue from UK hotels.

Of the total revenue, 2.77 billion baht was from the hotel business, followed by residential sales at 1.57 billion, accounting for 30%, and commercial properties contributing 14%, or 727 million baht.

Last year 56% of total revenue was from residential, while revenue from the hospitality business made up 26%.

The company plans to launch three high-end single detached house projects worth 3 billion baht each. One is to be located on Phattanakan Soi 32 with 30 units priced 50-100 million baht, launching in the second quarter next year.

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