Laguna Resorts & Hotels Announces Record Results

BANGKOK: Laguna Resorts & Hotels, Thailand’s second largest public hotel company, which owns Laguna Phuket, announced a record year in 1998 against the background of the regional economic crisis. Revenues climbed to Baht 2.3 billion, up from last year’s 1.6 billion, an increase of 47%. This was largely due to increased revenues at the Laguna Phuket hotels, (Banyan Tree Phuket, Sheraton Grande Laguna Beach, Dusit Laguna and Laguna Beach Club), attributable roughly 50/50 between occupancy and average rate. The occupancy increase of some 10 points over 1997 followed substantial conversions from Bali during Indonesia’s internal crisis, plus considerable increases from hard currency markets such as Europe and Australia to whom Thailand now represents much better value for money than in recent years. Management of the company are quick to note, however, that the Tourism Authority of Thailand’s “Amazing Thailand” campaign was a major factor. James Batt, Joint Managing Director of Laguna Resorts and Hotels, describes this as “undoubtedly one of the most successful regional tourism campaigns ever introduced.” The conversion of rates to market currencies was a sensitive issue in Thailand following the unilateral announcement of some Bangkok hotels that they would be moving to US dollars. The Laguna Phuket team balanced the need to continue to improve the company’s profitability with market conditions, and moved a portion of its contracts into hard currencies. This involved careful negotiations with the tour and travel industry, and whilst it has resulted in a substantial increase in average rate measured in Thai Baht, hard currency rates are still lower than 1997. “This balance,” says Batt, “was a winning formula and it is a testament to our strong working relationship with these many and varied travel agents that quiet negotiations were so successful. They have resulted not only in a record year for 1998, but serve as a solid base for 1999.” Profitability of the company rose to Baht 209 million from a loss in 1997 of Baht 571 million. Earnings per share were Baht 2.47 compared to a loss per share of Baht 6.75 the previous year.