Centel Q1 net profit soars as tourist arrivals boost hotel recovery
Central Plaza Hotel Plc (Centel) has reported a significant increase in net profit for the first quarter of this year, reaching its highest level since the beginning of the pandemic. This improvement is attributed to a substantial rise in tourist arrivals.
In comparison to a net loss of 44 million baht in the first quarter of last year, Centel recorded a net profit of 629 million baht. Revenue increased by 51% year-on-year, amounting to 5.86 billion baht.
Earnings before interest, tax, depreciation, and amortization (Ebitda) witnessed a 29% year-on-year increase, reaching 1.67 billion baht.
Gun Srisompong, Centel’s chief financial officer and vice president for finance and administration highlighted the visible recovery trend in the hotel industry this year. Factors contributing to this trend include China reopening earlier than anticipated. However, due to the limited number of international flights, which were considerably lower than in 2019, Chinese arrivals did not demonstrate significant growth in the first three months of this year, reported Bangkok Post.
Srisompong also noted that the hotel business’s recovery continues to face challenges such as limited flight numbers, increased travel costs, raw material price inflation, rising operating expenses, increased financial costs, and the risk of recession.
To mitigate the impact of interest rate hikes, Centel is focusing on cautious cost control for both its hotel and food businesses. This includes a prepayment plan for US dollar loans, which carry higher interest rates than Thai baht loans. The company also plans to issue debentures to increase the fixed interest rate portion.
Centel projects an occupancy rate of 68-72% and a revenue per available room between 3,350 and 3,650 baht. For the food business, the estimated same-store sales growth (excluding joint ventures) is expected to range from 7-9%, with a total-system sales growth of 13-15% in the first quarter of this year.
In line with its emphasis on sustainable growth, Centel has set a long-term target plan for 2020-2029 to reduce energy consumption, water usage, waste, and greenhouse gas emissions by 20% compared to 2019 levels. By the end of 2022, the company had implemented several projects to transform into a smart hotel business.
Centel aims to reduce energy consumption through initiatives such as heat pumps for hot pool jacuzzis, cutting energy use by 2-3 times, and a chiller optimizer project that will decrease electricity consumption by 10-15%. Five hotels have already installed this system.
In 2022, 12 hotels under Centara Hotels and Resorts, along with the headquarters, passed the assessment and audit of the world’s sustainable tourism standards in the hotel sector from Vireo SRL, an inspection specialist endorsed by the Global Sustainable Tourism Council (GSTC). Centel’s goal is for all Centara Hotels and Resorts properties to achieve GSTC certification by 2025.
