S Hotels & Resorts Plc (SHR), the flagship hospitality arm of Singha Estate PCL, expects the most robust growth this year by hitting the record-high revenue of THB8.5 billion in 2022, doubling the YoY growth from the high-performing 2021, which ended at THB4.5 billion. Thanks to the fast recovery in tourism, its well-diversified hospitality portfolios, upgraded services and offerings to reach high tourist demands, and enhanced direct booking channels, the growth will push SHR to become the No. 2 highest revenue Thai hotel operator.

Strong pent-up demand fuels tourism recovery   

“The tourism sector continues to recover in many parts of the world. We foresee the increasing demands in the hospitality business, including our properties in the five top leisure destinations, particularly in the UK and The Maldives, whose contributions are accounted for 44% and 28%, respectively,” said Mr. Dirk De Cuyper, Chief Executive Officer of S Hotels & Resorts Plc., “In the UK, experts project the revenue per available room or RevPAR to return to the pre-pandemic level of 2019; while the upside to restore 2022 RevPAR to pre-Brexit level is expected from MICE (Meetings, Incentive Travel, Conventions, Exhibitions) activities, around 50% of which containing in-person components, setting at hotels. The Maldives also sees strong demands back from tourists and remained minimally impacted by geopolitical issues. The number of tourist arrivals since the issues arose is 168,491, which is up from the same period in 2020 and 2021 by more than 45% on average. Thanks to the return of visitors are from the European and Middle-eastern regions. In addition, the Maldivian government expects the estimated tourist arrivals to the Maldives in 2022 to increase from the same period last year by 21%, reaching 1.6 million visitors. Tourism growth is also expected in other destinations, e.g., Fiji, Mauritius, and Thailand, as Covid-19-related travel restrictions in each market begin to ease. We, therefore, are confident that the macro trends will significantly contribute to our revenues, considering we have an average of 30% repeat guests to our hotels.”

Enhanced on-property experiences lead to 20-25% increase in ADR.

Another key factor that will drive 2022 revenue is the success of the property renovation and the creation of value-added features in all identified potential properties to cater to guests’ various preferences and lifestyle needs. In addition, bundle packages with SHR’s unique experiential tourism activities offered to guests e.g. the Marine Discovery Centre at SAii Phi Phi Island Village, or the Maldives Discovery Centre at CROSSROADS Maldives, have attracted more spending from trendy and nature-loving tourists by 15%. The moves are expected to increase the properties’ average daily rate (ADR) by 20-25% this year.

Three SHR properties have been renovated and undergone brand conversion to align with the company’s homegrown brand and self-managed platform, SAii, which allows SHR the flexibility to implement sales and marketing initiatives. The conversion has proven to have a 30% higher ADR in the fourth quarter of 2021 than the same quarter in 2020.

Direct booking approach pushes revenue to grow further.

Moreover, SHR’s strategy in driving the business using digital marketing to create customized platforms for the wider implementation of direct booking has given the company more resilience and adaptability. Last year, SHR saw significant growth through the direct booking platform that has been customized and adapted to “We Travel Together”, the government’s tourism stimulus package to create a seamless online booking journey for the guests. This year, the company expects the revenue contribution from a direct booking to total revenue to be increased from an average of 10% in previous years to 30% in 2022.

Growth plan: Triple the size of the revenue to maintain leadership

For a three-year plan, the company has earmarked an approximately THB7.3 billion budget to further expand the growth of SHR portfolios. A total budget of THB2.8 billion has been set aside to enhance its asset rotation strategy for existing properties and the construction of SO/Maldives, which is set to launch in 2023. The other THB4.5 billion is set for the merger and acquisition plan for new properties.

“Within the next three years, we have committed to accelerating growth for the company in the post-pandemic future. We have planned to maintain our overall portfolio in the existing properties at an optimal level by unlocking our fully valued assets in order to uplift the potential ones, which we are piloting in the UK hotel portfolio. For new properties, we have eyed M&A projects around the Asia-pacific coast and the Mediterranean and Indian Oceans under the THB4.5 billion budget. We also aim to focus on being a hotel operator, either through a flagship homegrown brand or partnering with leading international brands for business expansion. With the efforts, we target to reach our goals of tripling our size within 2024,” added Mr. De Cuyper.