S Hotel and Resort Public Company Limited, or ‘SHR’, a subsidiary of Singha Estate, reported service revenue for the first six months of 2023 at 4.821 billion baht, an increase of 28% from the same period last year. The company also reported an Adjusted EBITDA of 1.112 billion baht, soaring 74% compared to the previous year. This growth is attributed to an increase in the average occupancy rate across the portfolio, rising from 54% in the first half of 2022 to 69% in the first half of this year, along with an 11% increase in the Average Daily Rate (ADR) compared to the same period last year.

The performance of hotels in Thailand confirms a clear recovery towards normalcy in tourism as the world fully reopens. This is reflected in the average occupancy rate from January to June, which stands at 76%, significantly higher than the 48% recorded in 2022, driven by an increase in both domestic and international tourists choosing Thailand's beaches as their destination. Additionally, targeted marketing efforts in specific areas, combined with strong sales channels, have made SHR hotels a top choice for many travelers, further supporting the ability to drive ADR growth. In the first half of 2023, the average ADR reached 8,431 baht, a remarkable 72% increase compared to the same period last year.

Current economic challenges in Europe are influencing changes in travel behavior, with Europeans opting for more domestic or regional travel. This has allowed SHR hotels in the UK to maintain strong positive momentum, as approximately 90% of their customer base consists of domestic tourists, resulting in an average occupancy rate of 70% from January to June 2023, compared to 54% in the same period last year. The demand for hotels in the UK remains satisfactory, driven by adjustments to market needs and continuous room upgrades. Furthermore, the average ADR in the first half of 2023 increased by 10% to £83, despite cautious spending on luxury goods due to rising living costs. The UK portfolio also saw an increase in EBITDA margin in both Q2 and the first half of this year compared to the same period last year, thanks to more efficient cost and expense management. It is anticipated that both the average occupancy rate and ADR will continue to rise in Q3, in line with advance bookings during the tourism season, reflecting confidence in travel both domestically and internationally within the business and tourism sectors.

The same positive factors have impacted the performance of hotels in the CROSSROADS Maldives project, which achieved an average occupancy rate of over 87% in Q1 this year. However, the average occupancy rate softened in Q2 as the off-peak season began, due to fewer European tourists traveling between regions and a slower-than-expected return of Chinese tourists. As a result, the overall average occupancy rate for the first half of the year did not differ significantly from the same period last year. SHR anticipates that the second half of the year in the Maldives will remain relatively stable compared to 2022, with average occupancy rates remaining sensitive to the reopening of various regions worldwide, which may encourage tourists to disperse to other areas.

Hotels in Mauritius have temporarily closed for a complete upgrade of their water management systems and are expected to reopen in Q4 this year. This will have a limited impact on SHR's overall performance this year, as revenue from the Mauritius hotel accounts for only 3% of total revenue.

Mr. Dirk Andre Lina de Kuyper, Chief Executive Officer stated, “The performance in the first half of the year is satisfactory, especially the outstanding statistical figures from the hotel groups in Thailand and the UK, indicating a strong and continuous recovery. Hotels in other regions, including the Maldives and Fiji, also show promising trends. In Fiji, besides the main tourist groups from Australia and New Zealand, we are seeing significant growth in a new market segment from North America, particularly Canadian tourists. This ensures that the tourism sector will continue to be strong, supported by expansion into new markets. Castaway Island Hotel in Fiji achieved an average occupancy rate of over 93% in Q2, while the hotels in the CROSSROADS Maldives project have shown consistent performance even during the off-peak season. The outlook for the second half of the year signals positive trends in nearly all areas where the company’s hotels are located. Furthermore, the aviation business is recovering well with the announcement of increased flights and new routes in the second half of the year, which will further facilitate passenger travel and support growth in the service sector.

SHR continues to develop and implement digital technology across various platforms to meet the diverse needs of customers in the market. These efforts, combined with a commitment to optimizing portfolio management through RevPar strategies, will maximize benefits from room improvements in several hotels in Thailand, Fiji, and the UK, with new room types set to be launched by the end of 2023. Coupled with strict cost control measures, this will instill confidence in achieving the revenue target of over 10 billion baht. We will strive to achieve our operational goals to enhance wealth for all stakeholders of the company in 2023.”

SHR is well-prepared to face various challenges, maintaining a strong financial position by keeping debt levels low and managing investments effectively. Tris Rating has assessed SHR's credit rating at BBB+, which will enhance SHR's ability to reduce overall financial costs. Currently, the issuance of bonds is proceeding as planned, and SHR is ready to drive towards more efficient growth.

Ultimately, SHR focuses on sustainable growth as a core principle of its operations, with five hotels and The Marina at CROSSROADS receiving Green Globe certification, reflecting a commitment to investors and guests that SHR's operations meet international standards and can meet the expectations of guests. In 2023, SHR has begun planning to achieve carbon neutrality by 2030, increasing activities that emphasize social and environmental responsibility to mitigate the impacts of global warming while preserving beautiful nature for future generations of travelers. These activities not only foster good relationships between SHR and the community but also create a distinct position as a sustainably eco-friendly hotel welcoming conservation-minded tourists from around the world.