PTT’s OR diversifies with budget hotels and community malls at petrol stations

PTT Oil and Retail Business Plc (OR) is renewing its focus on diversifying its non-oil business ventures, with plans to construct budget hotels within its petrol stations and incorporate community malls catering to tourists. The company’s President and Chief Executive, Disathat Panyarachun, shared these developments.

The next quarter will see OR onboarding a business consultant to oversee the hotel project. Following this, another couple of months will be invested in picking an operator for the hotel chain, as per Disathat.

These new hotels will feature between 50 to 100 rooms, targeting travellers. The facilities near the hotels will comprise a variety of services including food and beverage outlets, convenience stores and laundry services. Going beyond this, the company is also exploring opportunities to incorporate wellness, healthcare and beauty businesses within its petrol stations.

Disathat expressed confidence about venturing into the budget hotel space, considering their strategic locations near highways and the added benefit of community malls. This new venture aims to cater to tourists with a limited budget looking for safe, clean rooms for short stays. The hotels will also accommodate the company’s 1,000 sales representatives requiring accommodation during their outstation trips.

While the budget for the hotel project is yet to be disclosed, the business feasibility study is currently underway. A clearer picture of the budget should emerge by June next year.

The idea of integrating budget hotels within petrol stations was first initiated by OR between 2016 and 2017, with feasibility discussions with four hotel chain operators kicking off soon after.

GPSC Plan

However, concerns were raised in 2018 by former Finance Minister Korn Chatikavanij regarding Global Power Synergy Plc (GPSC), a power business arm of PTT Plc. This was in response to GPSC’s announced plan to acquire Glow Energy Plc.

Korn argued that PTT, largely state-owned, is constitutionally restricted from engaging in business activities that compete with private business operators. This led the OR board to postpone the hotel project and several other plans until the issue was resolved.

The Covid pandemic further delayed the project as the tourism industry suffered a major setback. As of September end, OR and its partners operated 2,594 petrol stations nationwide, with 4,432 coffee shops under the Amazon brand and 2,277 convenience stores.

OR’s planned budget hotel development is set to be backed by its next year’s investment budget of 23 billion baht. Half of this budget is reserved for electric mobility businesses and renewable energy development, 27% for supporting lifestyle businesses, and the remaining for innovative and digital businesses.

OR also plans to completely revamp the image of some petrol stations next year, transforming them into community malls without fuel services. A prototype of such a station is set to open today, December 12, on Vibhavadi Rangsit Soi 62 in Bangkok.

This station, OR’s largest petrol station compound spanning seven rai, will continue to function as a refuelling facility, albeit with a stronger emphasis on non-oil businesses and featuring 25 brands. This renovation itself has a budget exceeding a billion baht.

The company’s increased focus on retail businesses is due to the low profit margin of only 2% in oil retail. OR is currently in discussions with potential partners to explore opportunities in personal care, including cosmetics, skin and hair care products, and food supplements. This new venture is expected to necessitate an investment of over a billion baht, reported Bangkok Post.