Hotels and resorts developer Banyan Tree Holdings has posted a first quarter net profit of S$5.2 million, down 66 per cent on-year.
Revenue also fell by 33 per cent to S$88.2 million in the three months ended March 31.
The company attributed the decline mainly to lower performances from its hotel investment, property sales and hotel residences segments.
Banyan Tree said its performance in the next two quarters will remain challenging and possibly unprofitable. But it expects its full-year results to be profitable if the global economic crisis and the Thai political situation stabilise.
The firm is also planning to launch about six spas in the next few quarters.
Speaking to Channel NewsAsia after a news briefing on its results, Banyan Tree’s executive chairman, Ho Kwon Ping, said the good news is that the company has probably reached the bottom for the first quarter of this year, and that it does not seem to be getting any worse.
However, he said: “The bad news is that we don’t see a lot of visibility on the horizon and we can’t be sure when the upturn will actually occur. So graphically speaking, we seem to be at the bottom of the curve but whether it’s going to be U, V or W, I think the next few months will tell.”
In addition, Mr Ho expects outbound and domestic travels by China to increase dramatically within 10 years.
“We’re therefore taking advantage of that by increasing our resorts in China and by ensuring that we get more of the Chinese visitation to our existing resorts, not just from Western Europe or from Southeast Asia, but very much from China,” he said.
Mr Ho and co-founder of Banyan Tree, Claire Chiang, were recent recipients of the Hospitality Lifetime Achievement Award at the annual China Hotel Investment Summit held in Shanghai.
The award recognises extraordinary leadership and contributions to the hospitality industry.
Source : Channel NewsAsia – 15 May 2009