In 2017, the Thai tourism sector saw a continuous recovery throughout the year. The clear evidence is the increase in foreign tourist numbers by over 8.77%, generating an 11.6% rise in revenue for Thailand compared to the previous year. Contributing factors included the ICAO lifting the red flag on aviation for Thailand, conflicts on the Korean Peninsula, and an increase in the quality of tourists following the crackdown on illegal tours, among others. However, hotel operators still faced intense competition, whether through price cutting or alternative accommodation options such as serviced apartments.

            TerraBKK Research summarizes the key points of the performance of 10 public companies in the stock market for 2017 as follows:

  Overview of the Hotel Industry  

           TerraBKK Research begins with a comparison of business sizes based on the overall market capitalization of listed securities, assessed by taking the closing price of listed securities multiplied by the current number of listed shares as of April 2018. It was found that only 3 companies have a market capitalization of over 10 billion baht: Central Plaza Hotel (CENTEL) at 65.4 billion baht, Erawan Group (ERW) at 20.5 billion baht, and OHTL at 12 billion baht.

            Revenue Breakdown from hotel operations shows that room revenue averages 60%, followed by food and beverage revenue at 32%, and the remaining 8% comes from other sources such as rental income, catering services, and seminars.

            Number of Rooms For hotels fully owned by operators, the highest is Erawan Group (ERW) with over 7,016 rooms. If including hotels that are both owned and managed, the number could reach tens of thousands, such as Central Plaza Hotel (CENTEL), which manages over 58 properties totaling 11,891 rooms.

           Average Occupancy Rate (OCC) for 2017 was 73.5%. The operator achieving the highest occupancy rate in 2017 was Dusit Thani (DTC) at Dusit Princess Chiang Mai with 89.4%, while the lowest was Grand Asset Hotels and Properties (GRAND) at Sheraton Hua Hin Pranburi Villas with 46.7%.

  Overview of Performance in 2017  

           Revenue and Net Profit for 2017 showed that Central Plaza Hotel (CENTEL) achieved the highest figures, with revenue of 20,345 million baht and a net profit of 1,991 million baht, indicating a continuous upward trend, similar to Erawan Group (ERW), which saw a revenue increase of 6.82% from the previous year, along with Dusit Thani (DTC), OHTL, Royal Orchid Hotel (Thailand) (ROH), and Mandarin Hotel (MANRIN). Meanwhile, operators with fluctuating revenue figures included Laguna Resort and Hotel (LRH), Grand Asset Hotels and Properties (GRAND), Shangri-La Hotel (SHANG), and Asia Hotel (ASIA).


           Return on Assets (ROA) reflects the company's efficiency in utilizing assets for good returns, with higher values being better. The company with the best figure in this group is OHTL at 14.09%, although it is categorized in a group with fluctuating growth (Sideway). Grand Asset Hotels and Properties (GRAND) saw a significant leap due to the transfer of ownership of units in the Hyde Sukhumvit 11 project and the sale of the Sheraton Hua Hin Resort and Spa property to a trust.

           Return on Equity (ROE) reflects the ability to manage operations to generate returns for shareholders as business owners, with higher values being better. OHTL is the winner with a ROE of 28.77%, the highest in the group. In terms of continuous growth trends, besides Grand Asset Hotels and Properties (GRAND), which jumped due to the reasons mentioned above, Royal Orchid Hotel (Thailand) (ROH), Erawan Group (ERW), and Mandarin Hotel (MANRIN) also showed continuous growth.


           Finally, the Net Profit Margin (NPM) averaged between 6.20% - 13.10%. The public company with the highest net profit margin is Grand Asset Hotels and Properties (GRAND) at 24.63%. Only 4 companies showed a continuous growth trend (Up Trend) from 2015 to 2017: Royal Orchid Hotel (Thailand) (ROH), Central Plaza Hotel (CENTEL), Mandarin Hotel (MANRIN), and Erawan Group (ERW). ---TeraBKK

Article by: TerraBKK Investment Tips
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