Bangkok-based Dusit International is expanding its services beyond traditional lodging. Last week, Dusit Thani Plc informed the Stock Exchange of Thailand that it had set up a new subsidiary, Praram 4 Development, to expand its business. The new company has registered capital of 100,000 baht.
Dusit Group CEO Suphajee Suthumpun said that the company is looking to expand into non-hotel business opportunities, including condominiums, serviced apartments, mixed-use developments and wellness projects.
Dusit projects its non-hotel business will contribute 10 percent of total revenue in the next five years. Last year's total revenue was 6 billion baht. Dusit Thani currently holds a 99.7-percent stake in the Praram 4 Development and is looking for business partners for future investment opportunities.
The first business project under the new subsidiary is expected to open within the next 12-18 months, and other developments will take shape in the next three years.
Business diversification, Suphajee said, is part of the company's two-prong strategy to maintain sustainable growth. According to the Bangkok Post, the group wants to raise its revenue contribution ratio from domestic and international operations to 50:50 over the next five years, up from its current ratio of 70:30. It also wants to double the number of hotel rooms under its portfolio to 14,000. The new rooms will come both from its own hotels as well as those under management contracts with Dusit International, Suphajee said, noting that these strategies will lower risks for Dusit, as 85 percent of its revenue comes from hotel operations.
Currently, Dusit operates 26 hotels in eight countries including Dubai, the Maldives and the Philippines. It owns 10 while the remaining 16 are under management contracts. Thanks to new management agreements, the company's total is slated to rise to 70 over the next five years.
Suphajee said that the company is looking to expand its hotel presence into Europe, which has different tourism seasons from Thailand and other South-East Asian countries. A European portfolio, Suphajee explained, will improve Dusit's performance and make it more stable.