S Hotels and Resorts targets THB 12 billion revenue in 2024 – TravelDailyNews Asia
S Hotels & Resorts announces strategies to boost profitability and achieve THB 12 billion in revenue in 2024, focusing on operational efficiency and sustainability.
BANGKOK, THAILAND – S Hotels and Resorts PCL announced business strategies to boost profitability with the target to achieve THB 12 billion in total revenue for 2024 across five markets globally. Aiming to earn 3-5% increase in EBITDA margin, the company puts greater focus on operational efficiency to maximize the bottom line, portfolio enhancement through room renovation and repositioning of core assets in prime locations, uplift of SAii brand to offer exceptional customer experience while pursuing an asset-light platform, and expansion through M&A opportunities. Under the sustainability commitment, S Hotels & Resorts has also implemented plans to enrich stay experiences with learning activities and gastronomy with strong local connections.
Michael Marshall, Chief Executive Officer of S Hotels & Resort Public Company Limited, said, “The continued resurgence of the global tourism industry throughout 2023 and the advantageous locations of our hotels in leading tourist destinations have contributed to S Hotels & Resorts’ notable successes. We have achieved a THB 10 billion revenue milestone and maintained our position as the No.2 Thai hotel operator in terms of revenue. The renovation of core hotel assets has been a major booster to the Average Daily Rate (ADR), which rose by 20%. 2023 also marked another milestone for the company with the opening of a five-star SO/ Maldives resort, in November, representing the completion of the CROSSROADS Maldives collection. This enhanced advantage to cater to internationally diverse market segments has further solidified the iconic project’s position as the leading multi-island integrated leisure and lifestyle resort destination in the Maldives.”
S Hotels & Resorts’ business accomplishments have been replicated on the investment community front. The oversubscribed three-year debentures, having raised THB 1.3 billion, demonstrate the company’s capability to secure a source of funds for potential strategic investment amidst volatile market environments.
For 2024, S Hotels & Resorts is working towards the main goal of boosting profitability. By continuing to drive efficiency and focusing on growth, the company aims to generate THB 12 billion in revenue and drive dynamic and diversified growth in four areas:
- Drive efficiency and ignite growth: The company plans to accelerate EBITDA potential with a 3-5% margin through three strategic drivers. The Revenue Per Available Room (RevPAR) is expected to see a growth of 25%, driven by strong pick-up from business on the books in the Maldives for the first quarter and the projected 20% uplift in overall ADR from room improvements in Fiji and Thailand. Non-room revenue is also targeted to grow by 15% from increased focus on providing unique F&B brands and signature experiences, plans to launch beach clubs in all SAii resorts, and initiatives to capture the surge in MICE activities through weddings and business events. In addition, through more centralized procurement systems and effective cost control without compensating service quality, the company will benefit from the streamlining of operations, which is expected to contribute to a 20% gross profit growth.
- Unleash the power of the portfolio: Towards a strategic goal of portfolio enhancement and rotation, S Hotels & Resorts will build upon 2023 success of unlocking high-potential assets with a target internal rate of return (IRR) of 12 – 15%. The renovation plans in Thailand will continue at SAii Laguna Phuket and SAii Phi Phi Island Village while properties in prime locations of major tourist destinations in the UK will be evaluated for the repositioning and rebranding, including Manchester, Edinburgh, Leicester, and Glasgow.
- Scale Without Limits: To capture a growing segment of eco-friendly and health-conscious travellers, the SAiibrand enhancement will be implemented across customer journeys to establish SAii as a sustainable luxury escape. Guest experiences will be elevated and redefined to align with customer needs and global trends while travellers looking for a green holiday can be ensured that their stay will have minimized environmental impacts. The SAii brand will also be positioned alongside its exciting F&B and health and wellness activity offerings. Additionally, the company will be forming strategic partnerships to deliver various brand offerings, from special stay packages to exclusive lifestyle products. This enhanced SAii brand will serve as a strong foundation to pursue growth through a flexible platform with fewer asset constraints, with the target to have 50 additional properties within five years, some of which will be under the asset-light platform through hotel management agreements (HMA), joint-ventures (JV), and the remaining under quality asset acquisition. To support this ambitious endeavour, the company aims to elevate the SAii brand as an internationally recognised platform through various growth engines, including seamless operations across diverse locations, investment in cutting-edge technical services to deliver innovative and personalised experiences, a global sales network to ensure a broad outreach, and a powerful digital presence supported by effective customer relationship management (CRM).
- Beyond Borders: S Hotels & Resorts has allocated a total budget of THB 15 billion for M&A opportunities over the next five years, with high-potential leisure destinations in European countries, the UK, Fiji, Asia-Pacific countries, and countries in the Indian Ocean being its primary targets. These assets will contribute to the diversification of the company’s portfolio and sustainable revenue growth while mitigating the risks associated with seasonal effects across all properties.
To ensure that environmental impacts are minimised, and positive impacts are created, sustainability remains the core of S Hotels & Resorts’ business operations. In 2024, the company aims to reduce carbon emissions by 5% each year, in line with Thailand’s nationally determined contribution of 40%. In particular, the installed solar panels in Thailand and the Maldives, including at SO/Maldives, are expected to help lower overall carbon emissions by 20%. Various initiatives to preserve endangered species have also resulted in 21 species within the International Union for Conservation of Nature (IUCN) Red List being found regularly in project areas, while a recent landmark Memorandum of Understanding (MoU) with the Maldives government has supported CROSSROADS Maldives’ conservation area as part of an Other Effective Area-Based Conservation Measures (OECMs) programme. The area covering 3.1 million square metres, approximately 31% of the total project size, is currently the largest marine protected area in the Indian Ocean.
Additionally, S Hotels & Resorts seeks to enrich stay experiences for hotel guests through various sustainability-based initiatives, from providing learning programmes at Marine Discovery Centres in Phi Phi and Maldives, which target to welcome more than 50,000 visitors per year, organising educational activities on local cultures, to using homegrown produce and locally sourced ingredients to offer farm-to-table and fresh seafood in the hotel menus.
“With ongoing efforts around planet-friendly practices, S Hotels & Resorts is on track to become carbon neutral and increase key biodiversity areas by 30% by 2030, in line with Singha Estate’s long-term sustainability commitment. As travellers’ demands continue to evolve, our unique offerings and well-positioned asset portfolio will enable us to capitalise on emerging needs and capture business opportunities in the present and the future,” concluded Marshall.