SET-listed Asset World Corp (AWC) plans to reduce its investment for next year to less than 10 billion baht if tourism recovers slowly, as 70% of its hotel portfolio already passed a critical cash flow stage in December.
Wallapa Traisorat, chief executive and president at AWC, said the company is preparing risk management plans under two scenarios, including a base case where increasing average occupancy helps create momentum for the first half of next year, eventually returning to 2019 levels by the fourth quarter of 2022.
However, if the outbreak continues to take a toll on travel demand, its investment budget will be reduced by half to less than 10 billion baht.
Under AWC's five-year strategic plan for the period 2020-24, the overall investment budget of 100 billion baht would ordinarily be divided on the basis of 20 billion for each year. However, that plan is adjustable, depending on the market situation.
She said mega projects such as Aquatique District Pattaya and a new phase of Asiatique in Bangkok will continue as they are in the design and approval process in terms of construction which will take around two years.
She said some parts of Woeng Nakhon Kasem on Charoen Krung Road might be able to commence construction in 2022 with a small investment.
Mrs Wallapa said new hotel investment will be slowed until demand and supply are in balance. AWC will focus on the renovation of existing properties instead.
The company recently conducted a soft reopening for Le Meridien Bangkok after investing 260 million baht in a renovation, including a new F&B outlet.
The hotel is set to fully reopen around the second quarter of next year.
AWC also plans to open three hotels in 2022 including Melia Chiang Mai, InterContinental Chiang Mai Mae Ping and Innside Bangkok Sukhumvit.
However, the opening of InterContinental Chiang Mai might be put off until 2023 if tourism demand is not able to return, particularly tourists from China.
Mrs Wallapa said the hotel situation has seen more positive signs this month as 70% of hotels have already been able to break even as the average occupancy was above 24%.
Hotel bookings in December doubled from October, of which international tourists accounted for 70% of bookings in Bangkok and 50-60% in terms of all the properties within AWC's portfolio.
"We hope to see more substantial growth next year as travel confidence hasn't yet fully rebounded in December," Mrs Wallapa said.
AWC expects to earn profit next year from an improving hotel situation and rental office business with more foreign firms showing an interest in establishing offices in Thailand.