Hotel segment eases back to normal

Hotel segment eases back to normal

Hotels are gradually recovering from pandemic lows, allowing SET-listed companies to post strong performances in the first quarter despite the persistence of the Covid-19 Omicron variant.

Business improved thanks to the resumption of the Test & Go scheme on Feb 1, as well as the "We Travel Together" hotel subsidy scheme, which contributed to 31% of room revenue between February and April, said Gun Srisompong, chief financial officer at Central Plaza Hotel Plc (Centel).

Centel, the operator of Centara Hotels and Resorts, reported revenue of 1.2 billion baht from hotel business in the first quarter, soaring 149% year-on-year.

Mr Gun said although the second quarter is in the low season, hassle-free travel will attract international arrivals, particularly from South Asia.

Around 2 billion baht of annual capital expenditure will be allocated to hotel renovations, such as at Centara Grand Krabi, which is set to be rebranded as Centara Reserve, he said.

Mr Gun said when the property is rebranded, the average daily room rate (ADR) would increase by 30%.

New projects include properties in the Maldives, which will start construction by mid-2022 at a cost of 800-900 million baht, while 200 million baht is reserved for Centara Grand Hotel Osaka.

"Hotel business has recovered across the globe as vaccination increases mobility, as seen from significant growth in Europe and Thailand, while simplified travel rules have helped generate more demand," said Chaiyapat Paitoon, chief financial officer at Minor International.

Minor Hotels earned revenue of 13.8 billion baht in the first quarter, surging 108% year-on-year, while losses narrowed to 3.7 billion baht, from 5.3 billion baht.

He said hotels in Thailand have seen revenue per available room (RevPar) increase by 147% year-on-year, with the occupancy rate rising to 31%, from 20%.

The company's hotels in Europe, which account for 64% of hotel revenue, are expected to return to the 2019 occupancy rate by the middle of this year.

Mr Chaiyapat said the April occupancy rate stood at 63%, compared with 72% in 2019, and ADR had already surpassed the pre-pandemic level by 11%.

Minor Hotels has 60 properties in the pipeline, of which 11 are owned and leased properties slated for this year, while 49 were under management agreements set for 2022-26.

Woramon Inkatanuvat, executive vice-president and chief financial officer at Erawan Group Plc, said travel rule relaxations have been driving more arrivals in May.

We Travel Together also boosted the domestic market, she said.

Erawan posted income of 638 million baht in the first quarter, up 69% year-on-year, while losses shrank 36% to 316 million baht from 495 million.

The budget segment Hop Inn had the fastest recovery, with its RevPar only 7% lower than 2019 levels in the first quarter.

Ms Woramon said the company had an investment budget of 800 million baht for nine new Hop Inn hotels and renovations of existing properties, such as Courtyard by Marriott Bangkok and Ibis Sukhumvit 4.

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