Banyan Tree Holdings has seen its third quarter earnings hit by political unrest in Thailand which affected its operations there.
The resort developer and manager posted a 78 per cent on-year decline in net profit to S$14 million for the first nine months of the year to September.
In the third quarter, the company reported a net loss of S$4.9 million compared to net profits of S$49.1 million last year.
Banyan Tree has focused on the high-end resort market, which has been relatively unaffected by the financial crisis.
But political unrest and other recent disruptions to travel in Thailand hurt its profits this year.
Ho Kwon Ping, executive chairman, Banyan Tree Holdings, said: “We were very badly hit in Phuket where we have a number of properties. And it wasn’t just the political crisis in Thailand alone. It was the fact that for the first time ever, Phuket International Airport was closed for three days and that had huge ramifications on the travel, trade and people stopped coming afterwards.”
The company’s revenue from its Thailand operations fell 21 per cent.
But the rest of its operations fared better, with sales from businesses outside of Thailand up 10 per cent.
The company expects the global slowdown to affect demand from business travellers and conferences.
It intends to focus on the leisure market which is expected to be more resilient.
Mr Ho continued: “Individual, family based leisure travel is the last to go. You don’t need financing in order to go on a holiday. You don’t want to cancel a holiday because it’s usually a very precious moment for you and your loved ones. So people usually fight very hard to preserve their holidays.”
Banyan Tree is aiming to target this market by boosting its internet booking capabilities and focusing on short-haul travellers within Asia.
Source : Channel NewsAsia – 13 Nov 2008