S Hotels and Resorts PCL. (SET: SHR), a leading international hotel and resort management company, part of Singha Estate Group (SET:S), announced an increase in revenue from services for the first quarter of 2024, reaching 2,742.8 million baht and marking 8% YoY growth. This increase owes much to the introduction of newly renovated room offerings, leading to a 24% surge in the Average Daily Rate (ADR) across the portfolio. The company is poised to advance its strategic plan, focusing on enhancing portfolio efficiency, particularly in hotels located in Thailand and the United Kingdom. With the launch of the SO/ Maldives, which has effectively expanded the tourist base for the CROSSROADS project, the company is strategically positioned to capitalise on opportunities arising from burgeoning global tourism demand and engaging a rising number of experiential travellers. Ultimately, these efforts are aimed at fostering continuous and sustainable growth for the company.
Outstanding operational performance at SHR’s hotels in Thailand and two hotels within the CROSSROADS project was characterised by exceptional service standards, which appealed to a diverse range of tourists and resulted in high occupancy rates of up to 89%. This success was accompanied by increases in ADR of 14% (in Thailand) and 10% (at CROSSROADS) compared to the first quarter of 2023. Similarly, experiential stay offerings at the company’s hotels in Fiji contributed to a strong 36% YoY growth in Revenue Per Available Room (RevPAR), leading to overall revenue growth of 8% in the first quarter of this year. Additionally, enhancements in operational efficiency and cost management have driven a 13% YoY rise in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). However, increased interest rates and operational performance of SO/ Maldives during the ramp-up period, resulted in an 11% drop in net profit for the first quarter of 2024, totalling 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 tourism season commenced in Thailand and the Maldives and available rooms returned to full capacity, the RevPAR of self-managed hotels in Thailand and the CROSSROADS project surged from the fourth quarter of 2023 by 94% and 46% respectively. This increase substantially contributed to the 75% QoQ 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 sets its sights on achieving a total revenue of 11,000 million baht with a significant increase in net profit compared to the previous year. This goal will be propelled by various factors, including properties in locations that appeal to tourists, the flexibility to adjust room rates in response to growing tourism demand, and market positioning aligned with the prevailing trend of value-for-money tourism. Additionally, the company plans to execute a development strategy for its offerings, particularly focusing on enhancing food menus and services such as spas and beach clubs. Concurrently, SHR commits to controlling costs and improving expense management efficiency, ultimately enabling the company to achieve the planned elevation 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.
