Dusit Thani Public Company announces 2019 financial results, including 10.3% growth in net profit driven by revamped business structure
Surge in business performance is in line with the company’s three-pronged strategy for balance, expansion and diversification.
Bangkok, 27 February 2020: Dusit Thani Public Company Limited (DTC), one of Thailand’s leading hotel and property development companies, has announced its 2019 business results, including total revenue of 6.1 billion baht and net profit of 320 million baht – an increase of 9.9% and 10.3% year-on-year, respectively.
Reflecting the strength of DTC’s three-pronged strategy for balance, expansion and diversification, the revenue and net profit were achieved despite significant external headwinds in 2019, such as the global economic slowdown and surging Thai baht impacting the number of tourist arrivals in the kingdom, as well as internal challenges stemming from the temporary closure of DTC’s flagship hotel, Dusit Thani Bangkok, for redevelopment as part of the landmark mixed-use development project, Dusit Central Park.
The closure of the iconic hotel on 5 January 2019 after almost 50 years of service paused a significant stream of revenue to the company. With a no lay-off policy in place at the hotel, the company also faced substantial additional expenses related to the retention of staff during development of the new flagship property. Essential renovations of Dusit’s existing properties in Thailand also added to the company’s outlay costs in 2019.
Anticipating and planning for these expenses and challenges, and to compensate for the shortfall in revenue from the flagship property, DTC’s management made several strategic investments in adjacent lines of business to bring new consistent streams of revenue to the company, and also invested in new properties, and created new lines of business, for the hotel’s employees to run.
Financial restructuring through the strategic sale of assets, such as the sale of Dusit Thani Maldives Resort to Dusit Thani Freehold and Leasehold Real Estate Investment Trust (DREIT), also helped to balance the company’s property portfolio in line with its aims for sustainable and profitable growth.
“Our long-term, holistic view for our business is evident in the strategic investments and moves we made in 2019 to maintain brand presence in the local market, establish new sources of recurring revenue, leverage our existing strengths and resources to create additional value, and deliver profitable growth despite the many challenges we faced,” said Ms Suphajee Suthumpun, Group CEO, DTC.
“Building on the first successful step we took towards concentric diversification in 2018 through our acquisition of Elite Havens, the leading provider of bespoke villa rentals in Asia, in January 2019 we expanded into food business with the acquisition of Epicure Catering, the leading provider of catering services to international schools in Thailand. This brought an immediate and consistent stream revenue to our company which helped to compensate for the shortfall from Dusit Thani Bangkok.
“We also successfully opened Dusit Suites Hotel Ratchadamri Bangkok, our first all-suites property in the heart of the city, our first standalone restaurant concept, Baan Dusit Thani, and first standalone spa concept, Namm, all of which are staffed by employees from Dusit Thani Bangkok. The hotel’s employees are also central to Dusit Hospitality Services, the new on-demand service we launched to provide housekeeping, engineering, and banqueting solutions for businesses based in Bangkok.
“Keeping the hotel’s team together is essential to maintaining brand awareness in the local market and allows us to continue delighting our existing client base while reaching new customers too. The new businesses we have introduced have allowed us to experiment with new concepts that will eventually go on to add convenience, experience and value at Dusit Hotels & Resorts worldwide, as well as at the new Dusit Thani Bangkok hotel, which is slated to open as part of Dusit Central Park in 2023.”
Alongside the investments and strategic moves mentioned above, in 2019 DTC laid the foundations for future growth in the hotel segment by launching ASAI Hotels, a new lifestyle brand designed to tap into the fast-growing market of millennial and millennial-minded travellers. The first ASAI-branded hotel, ASAI Bangkok Chinatown, is slated to open in Bangkok’s fast-growing Chinatown district this year.
DTC also began tapping into the fast-growing health and wellness food market by entering into a Joint-Venture Agreement with South Africa’s Real Foods Group to bring its popular healthy fast-casual restaurant concept, Kauai, to Bangkok. The Joint Venture is also exploring retail opportunities for Kauai products throughout Southeast Asia, ultimately bringing further adjacent streams of revenue to DTC.