Overseas properties to make up for Central hotels' losses at home
January 20, 2014 00:00 By BAMRUNG AMNATCHAROENRIT THE N
CENTRAL PLAZA HOTEL, the country's leading local hotel chain, is confident of achieving its 12-per-cent sales growth target of Bt19 billion this year, despite the current political crisis, thanks to the performance of the chain's hotels abroad - especia
Ronnachit Mahattanapreut, senior vice president for finance and administration at Central Plaza Hotel – operators of Centara Grand and Centara, and Centra brands – told The Nation that the opening of its two hotels in the Maldives would be a key driver in the company’s growth this year at a time when sales in Bangkok has been hit by the political tensions.
Sales in Maldives are projected to reach Bt1.5 billion this year, up from 1.2 billion last year – amounting to 20 per cent of the company’s total hotel sales. Sales from the company’s hotel business are expected to grow by 12 per cent this year, up from Bt7 billion in 2013.
A third resort in Maldives is already under construction.
Central Plaza Hotel also owns franchises in KFC, Auntie Anne’s, and Mister Donut outlets, with sales representing about 54 per cent of the groups total sales. However, sales in these businesses are not expected to grow significantly this year due to schemes under the government’s economic stimulus – such as the first-car tax-incentive scheme introduced last year – which has resulted in consumers spending elsewhere.
According to the company, the ongoing political crisis, which culminated in the “Bangkok shutdown” last Monday, is considered a major risk to the company’s business this year. It has already suffered a loss in sales for both rooms and MICE (meetings, incentives, conventions, and exhibitions) events held at its hotels in Bangkok. This month it projected its occupancy rate would decline to 50 per cent. Events held at its hotels have also been postponed, costing the company Bt70 million in total.
The group’s five hotels in Bangkok hit by the political demonstrations are: Centara Grand at CentralWorld; Central Plaza Ladprao; Centara Watergate Pavilion; Centra Central Station, close to Hua Lamphong train station; and Centra Government Complex Hotels & Convention Centre, Chaeng Wattana.
To minimise the business risk, Ronnachit said the firm would focus more on the overseas market. Currently, the firm operates 18 resort properties abroad in the Maldives, Bali, Vietnam, Sri Lanka, Shanghai, Sri Lanka and Ethiopia – with the newest property in Mauritius.
On the domestic front, outside Bangkok the group has performed more positively, with Hua Hin, Pattaya, and Phuket recording occupancies of 80-100 per cent this season.
In total, the firm operates 47 properties in the Kingdom, covering all major tourist destinations in the country.