S Hotels and Resorts PCL (SHR), a prominent international hotel and resort management firm under the Singha Estate Group, has reported a significant uptick in service revenue for the first quarter of 2024, totaling 2,742.8 million baht. This increase can be largely attributed to the introduction of newly revamped room offerings, leading to a notable 24% surge in the Average Daily Rate (ADR) across its portfolio.
The company is now focused on advancing its strategic initiatives, particularly in optimizing portfolio efficiency, with a special emphasis on properties in Thailand and the United Kingdom. The recent launch of SO/ Maldives has notably expanded the tourist base for the CROSSROADS project, strategically positioning the company to leverage the opportunities arising from the increasing global tourism demand and attracting a growing number of experiential travelers. The ultimate goal of these endeavors is to foster continuous and sustainable growth for the company.
Remarkable operational achievements were observed at SHR’s properties in Thailand and two hotels within the CROSSROADS project, characterized by exceptional service standards that resonated well with a diverse range of tourists, resulting in high occupancy rates of up to 89%. This success was complemented by significant increases in ADR, notably by 14% in Thailand and 10% at CROSSROADS, compared to the first quarter of 2023.
Similarly, the experiential stay options at the company’s Fiji properties contributed to a robust 36% year-on-year growth in Revenue Per Available Room (RevPAR), driving an overall revenue growth of 8% in the first quarter of this year. Furthermore, improvements in operational efficiency and cost management contributed to a 13% year-on-year rise in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).
However, factors such as increased interest rates and the operational performance of SO/ Maldives during its ramp-up phase resulted in an 11% decline in net profit for the first quarter of 2024, totaling 111.6 million baht.
Mr. Michael Marshall, CEO of the company, stated, “This quarter’s performance, in terms of the growth in revenue and EBITDA compared to the same period last year, highlights the success of our continuing strategy to enhance the quality of core assets. In addition to the positive market response, we’ve seen a significant increase of 30-40% in room rates for newly renovated rooms compared to the baseline year. These achievements underscore our readiness to further cultivate brands within the company, ensuring we continuously meet market demands. As part of our commitment, we are dedicated to establishing the SAii brand as a globally recognised entity by offering products and services that reflect the brand’s distinct identity, effectively attracting tourists and accommodating a diverse range of lifestyles.”
As the tourist season kicked off in Thailand and the Maldives, and as available rooms reached full capacity, the RevPAR of self-managed hotels in Thailand and the CROSSROADS project saw a significant surge in the fourth quarter of 2023. This surge amounted to a 94% increase for Thailand and a 46% increase for the CROSSROADS project. This rise played a major role in the 75% quarter-on-quarter growth in net profit for the first quarter of 2024.
Mr Marshall added, “We’re seeing positive indicators within the tourism sector in countries where the company operates, coinciding with an upsurge in advance bookings for the next 3-6 months compared to the same period last year. This trend underscores the effectiveness of our proactive marketing strategy, which includes the expansion of sales channels to tap into new potential markets and the implementation of targeted pricing strategies. Moreover, the favourable performance trend of the SO/ Maldives joint venture contributes positively to the company’s outlook, along with SHR’s financial cost reduction strategies and the anticipation of a global decline in interest rates in the latter part of the year. These factors could provide a significant boost for the company to achieve its performance goals for 2024.”
In 2024, SHR is targeting a total revenue of 11,000 million baht, aiming for a substantial increase in net profit compared to the previous year. This objective will be driven by several factors, including properties strategically located to attract tourists, the ability to adjust room rates according to rising tourism demand, and a market strategy focused on affordable yet quality tourism experiences. Additionally, the company intends to implement a development plan for its offerings, with a particular emphasis on improving food menus and enhancing services like spas and beach clubs. Concurrently, SHR is committed to cost control and improving expense management efficiency, ultimately leading to the planned enhancement of the EBITDA Margin.
“The accomplishments in the first quarter of this year signify the fulfilment of objectives outlined in our strategic plan. SHR remains committed to spearheading enhancements in asset quality and refining the standards of the SAii brand to deliver an ever-more superior guest experience, thereby laying a robust groundwork for future business expansion. Concurrently, we are focused on accessing new markets across all portfolios and bolstering operational efficiency within the company to maximise shareholder return and all stakeholder benefits,” concluded Mr Marshall.
