BANGKOK (Reuters) - Central Plaza Hotel Pcl, Thailand’s second-largest listed hotelier by market value, expects 2012 net profit growth of 50 percent as tourism recovers and the company is considering a joint-venture opportunity in Myanmar, its executive said.
The Thai tourism industry has suffered a series of blows over the past few years, from airport closures in 2008 and civil unrest in 2009 and 2010 to devastating floods last year. It accounts for about 6 percent of gross domestic product GDP.L and is picking up strongly, with arrivals expecting to reach 20 million in 2012.
Ronnachit Mahattanapreut, senior vice-president of finance, told Reuters the company’s 2012 revenue would grow 20 percent to 13.7 billion baht, with net profit growth rising by half from a year earlier thanks to rising contributions of recently opened hotels in Thailand and fees from hotel management overseas.
“We’re having a very busy year,” Ronnachit said in an interview.
“Pre-bookings at all our hotels have been strong, starting this year despite all the (economic) troubles in Europe. Travel demand, especially from Asia and ASEAN (Association of South East Asian Nations) — like Malaysia, Singapore — has not been any less but it is growing even more.”
Revenue per available room, an industry benchmark, is expected to increase 11 percent in 2012 compared with 7 percent last year. The average daily room rate is projected to rise 9 percent to 3,994 baht, Ronnachit said.
The company, operator of Central Grand at CentralWorld, is expected to report a 49 percent rise in 2012 earnings of 867.3 million baht with revenue of 13.6 billion baht, according to five analysts polled by Thomson Reuters I/B/E/S.
Central Plaza CENT.BK is due to report 2011 results later this month and Ronnachit said despite a brief disruption from flooding in the last quarter, its net profit would post a record high, turning round from a 51 million baht loss in 2010 because of political unrest.
Central Plaza runs 31 hotels and resorts in Thailand and other countries, of which 16 are under management contracts.
Central Plaza, operator of Centara Grand at CentralWorld, competes with local firms including Minor International (MINT.BK), which runs the Four Seasons Bangkok, and Erawan Group ERAW.BK, which owns Grand Hyatt Erawan.
The company, which would invest 1.2 billion baht this year, also operates fast food chains including KFC Kentucky Fried Chicken, Mister Donut and Auntie Anne’s. Last year, it acquired the Thai operation of the Ootoya Japanese restaurant chain for 600 million baht.
Central Plaza’s strategy to expand its hotel business by focusing on international hotel management contracts to reduce domestic risk, or invest in a joint venture hotel to limit capital expenditure, is paying off, Ronnachit said.
The company is considering a joint venture investment with a hotel in Myanmar, which is fast opening up to tourism, as it prepares for expansion abroad ahead of the implementation of the EU-style ASEAN Economic Community in 2015 that would allow for a free flow of goods, capital, services and labour.
“We have our business development team looking at this ... however, we should be able to conclude this by the end of the year,” he said, adding Myanmar was facing a hotel room shortage.
Global hotel chains including Starwood Hotels & Resorts HOT.N — which runs chains such as Westin, Sheraton and Le Meridien — and Marriott International MAR.N have expressed interest in running hotels in Myanmar, a country tightly controlled by the military for five decades until last year.
Central Plaza shares, valued at $499 million, were flat at 11.40 baht after rising as much as 1.75 percent to 11.60 baht at one point. The broader market .SETI was 0.1 percent higher.
Editing by Martin Petty and Robert Birsel