Thailand’s fourth-largest hotelier, Central Plaza Hotel, on Monday pared back its outlook for this year, projecting a drop in net profit and revising down its revenue target following a rise in costs.
The company, which runs 13 luxury hotels including those in the resort islands of Phuket and Samui, cited several reasons for the grimmer outlook — from Thailand’s four-year political crisis to an increase in costs from opening a new hotel.
“Our net profit this year will definitely be lower than 2008,” Ronnachit Mahattanapreut, senior vice president for finance, told reporters. “We have higher expenses from opening a new hotel,” he added.
Central Plaza earned a net profit of 324 million baht ($9.5 million) in 2008.
Ronnachit also projected revenue would grow between two and three percent this year, down from an earlier projection for a 10 percent rise.
According to earnings tracker Thomson Reuters, five analysts expected on average the company to report a net profit of 288.5 million baht this year, down about 11 percent from a year earlier.
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Central Plaza, which competes with Minor International and Erawan Group, plans to spend 700 million baht in 2010 on its hotel business, down from 2.7-2.8 billion it invested this year, Ronnachit said.
Ronnachit said the government’s stimulus measures should help spur the industry in the second half of this year, predicting a small contraction in Thailand’s economy in 2009 and 2-3 percent growth in 2010.
“The high season is coming in the fourth quarter but this is really up to political factors, too,” Ronnachit added.
Like other hotel operators, Central Plaza has suffered from political blows in Thailand, including the week-long closure of Bangkok airports by protesters in late 2008, which helped push its share price down 45 percent in 2008.
Thailand’s embattled tourist sector has improved since July due to a pick-up in foreign arrivals, but renewed political unrest could drag the sector down again, operators said.
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