Bangkok--28 Apr--i2C Communications
Company believes returns from various investments will help minimise financial impact during three-year construction of new hotel
Shareholders of Dusit Thani PCL (DTC) have approved the investment of 36 billion baht in a mixed-use development project which will begin construction in July this year.
Developed in partnership with Central Pattana PCL (CPN), the new development will be constructed on the plot of land between Silom and Rama IV Roads, on which the company's flagship hotel, Dusit Thani Bangkok, currently stands. The development will comprise a hotel, residential building, office building and retail space over a total area of 23 rai 2 ngan 27.2 square meters.
Approval for the investment in the project, which is worth a total of 36,700 million baht, was granted at the Annual General Meeting of Shareholders for the year 2017, held on April 27. At the meeting, the company iterated its business performance will remain buoyant during development of the project thanks to a prudential financial structure which will allow the company to gain returns from the investment since the early stages of its development.
In preparation for construction of the new hotel, the development will start on land adjacent to Dusit Thani Bangkok, next to Rama IV road, which currently houses derelict buildings. Meanwhile, the Dusit Thani Bangkok will continue its full operations until mid-2018. The new hotel is expected to complete in 2021, followed by the rest of the project by 2024.
Dusit Thani Bangkok's revenue, at approximately 900 million baht per annum, currently accounts for 16.67% of the company's total earnings. The company has worked closely with several consultants to meticulously plan a financial structure which allows for short and long term returns from the project, thus significantly minimising financial impact during redevelopment of the hotel. The company also plans to minimise financial impact during construction of the project by diversifying its lines of business under new project investments.
The company believes the mixed-use project, with its fusion of hospitality, commerce, business, and environmentally friendly spaces, will become a new city landmark and a beacon of modern Thai culture to the world. The project also aims to ease traffic in the area as well as provide more convenience for pedestrians.
To maintain the iconic status of Dusit Thani Bangkok, a Bangkok landmark for nearly 50 years, some emblematic elements of the hotel will be preserved during the development and included in the new hotel, creating a new icon for a new era of tourism and essentially elevating the Dusit Thani brand to another level.
"We would like to express our appreciation to all of our shareholders for their confidence in the project," said Ms Suphajee Suthumpun, DTC's Group Chief Executive Officer. "As a company, we have outlined three clear strategies for sustainable and profitable growth which will ensure our success now, and in the future, as we prepare to take on this important development. The first strategy is to balance our portfolio of hotels to include half of our operations outside of Thailand. This will help to minimise risk and allow us to explore lucrative hotel management and franchising agreements. The second strategy is to focus on generating revenue by doubling the number of rooms we have in operation. And the third strategy involves diversifying our lines of business. We believe that all of this will make the financial structure of our company stronger."
The Dusit Thani group currently operates 29 hotels and resorts worldwide, 10 of which are located in Thailand. The company expects to increase its operations to 70 hotels in 21 countries by 2020.