Thai hotel operator Erawan Group announced plans to invest $64.29 million into its hotels this year, with the majority of the investment focused on new development..
The Erawan Group plans to launch nine new hotels this year - eight in Thailand and one in the Philippines - adding a total of 800 rooms to its portfolio. Kanyarat Krishnatewin, deputy managing director and CFO at Erawan Group, made the announcement during an investor briefing.
According to Krishnatewin’s statement, this increased investment and development is part of Erawan’s existing hotel pipeline, which consists of 22 hotels under development.
The company expects to see a 10-percent increase in revenue this year, and an occupancy rate of 80 percent on active tourism, Kanyarat said in a statement. This is a bump up from last year’s performance, where Erawan’s revenue grew 6 percent, with an occupancy rate of 79 percent.
In the first quarter of 2017, Erawan posted a net profit of 207.7 million baht (equal to $6.1 million USD), up 9 percent from the prior year due in part to an increase in tourists arriving to Thailand and the Philippines from Russia, South Korea and Japan. However, the number of Chinese visitors to these countries also declined during this period.
A report released by JLL in January of this year found that Bangkok, Pattaya and Phuket were the top destinations in Thailand for hotel development. More than 10 hotels and hospitality assets were sold in Bangkok and other major provincial destinations throughout the country in 2016. However, investment volume declined by 15 percent from 2015 due to a lack of large assets available on the market, though the sale of the Swissotel Nai Lert Park, worth roughly $317 million, is expected to close this year.
The end of last year also saw growing interest in Thailand from Best Western, with the company buying the Hula Hula Resort & Spa, in Ao Nang and converting it to the Best Western Hula Hula Ao Nang Resort. The company also signed a deal with A.D. Houses Co. to build four Best Western Plus hotels throughout Thailand.