Dusit International, a leading Thai hotel management chain, is diversifying into property development and wellness in a bid to build long-term, sustainable growth.
Dusit Thani Plc informed the Stock Exchange of Thailand last Thursday that it had set up a new subsidiary, Praram 4 Development, to expand its business in the future. The new company has registered capital of 100,000 baht.
Suphajee Suthumpun, Dusit group's chief executive, said it plans to expand into non-hotel business activities such as condominiums, serviced apartments, mixed-use developments and wellness projects.
The first business project under the new subsidiary is expected to open within the next 12-18 months and big developments will take shape in the next three years.
Dusit projects its non-hotel business will contribute 10% of total revenue in the next five years. Last year's total revenue was 6 billion baht.
At present, Dusit Thani holds a 99.7% stake in the Praram 4 Development and will find business partners in the future.
Ms Suphajee said business diversification is part of its two-prong strategy to maintain sustainable growth.
The group aims to raise its revenue contribution ratio from domestic and international operations to 50:50 over the next five years, up from 70:30 currently.
It also wants to double the number of hotel rooms under its portfolio to 14,000. The new rooms will come both from its own hotels as well as those under management contracts with Dusit International, Ms Suphajee.
These strategies will lower risks for Dusit, as 85% of its revenue comes from hotel operations, she said.
Currently, Dusit operates 26 hotels in eight countries including Dubai, the Maldives and the Philippines. Of the total, 10 are its own while the remaining 16 are under management contracts.
The group has also signed agreements to manage new hotels, which will bring the total to 70 over the next five years.
Ms Suphajee said it is looking to expand its hotel presence into Europe, which has different tourism seasons to Thailand and other Asean countries. If the group has hotels in Europe, it will make its performance more stable.
Apart from new business expansion, Dusit is working to develop new training courses to produce human resources to serve the growing Asean hotel industry, particularly in Thailand, she said.