2017 was very much a year of consolidation, capital investment, and adaption for our company as we continued laying the groundwork for a sustainable and profitable future.
From extensive renovations of our longest-running properties, to developing our human capital, to the strategic divestment of Dusit Princess Korat hotel, every decision and investment we made was designed to strengthen our foundations and enhance our capacity for long-term revenue generation.
By year end, we reported a net profit of THB 267 million, an increase of 134% from 2016.
In our pursuit of a bright and sustainable future for the company, in 2017 we looked deep into the company’s core foundations – its people, processes, properties, technology, and financial capabilities – and began refining each element in line with our masterplan for long-term success.
Architects of our own destiny, we further consolidated, diversified, and fortified our fundamental operations with a view to building a solid company structure able to weather industry disruption, technological shifts and economic storms.
This included investing in people. Throughout the year we successfully secured top new talent to enhance our team and elevate our capacity towards achieving our strategic goals. Our strategic blend of long-service staff and newcomers has led to many initiatives that will add value for all shareholders and stakeholders.
One such initiative was the successful formation and introduction of the Dusit Thani Freehold and Leasehold Real Estate Investment Trust (DREIT). Converted from the original Dusit Thani Freehold and Leasehold Property Fund (DTCPF),
DREIT provides increased tax efficiency, the ability to invest in real estate in Thailand and abroad, and more freedom to renovate hotels under the trust. This will help to unlock the full potential of our assets, drive the expansion of our business, and create even more value for investors.
Properties currently under the trust include Dusit Thani Laguna Phuket, Dusit Thani Hua Hin, and dusitD2 Chiang Mai. More properties will be added according to commercial viability.
In 2017, we also invested in extensive renovations of Dusit Thani Laguna Phuket, guest rooms at Dusit Thani Pattaya and Dusit Thani Manila, and a complete makeover of Benjarong Restaurant at Dusit Thani Manila. The positive results of these renovations were quick to manifest. Within just two months after reopening, for example, Benjarong restaurant was named one of the 14 Hot New Global Restaurants by CNN Travel. The restaurant was also swiftly granted the THAI SELECT seal of approval from the Ministry of Commerce in Thailand, cementing its reputation as one of the best Thai restaurants in the Philippines.
In 2017 we also made good progress towards global expansion. Our Development team signed 17 properties across Bahrain, Bangladesh, China, Ethiopia, Nepal, Thailand and Vietnam, taking our tally of properties in the pipeline worldwide to over 60.
Dusit Hospitality Education, meanwhile, successfully received its licence to operate the pioneering Dusit Hospitality Management College, a unique fully integrated hospitality school and hotel in Manila, Philippines. In Bangkok we also formed the Dust Thani Excellence Centre, which will enhance Dusit Thani College’s capacity to offer short culinary and hospitality courses for corporate clients.
Alongside strengthening our property foundation in Thailand to focus on key leisure and tourism destinations, including the strategic divestment of Dusit Princess Korat, we began exploring options to establish a presence in even more international markets. This included opening a new Global Sales Office in India, one of the world’s fastest growing outbound markets, and establishing strategic partnerships with two renowned hotel companies – Dossen International Group in China, and Colours International Co., Ltd., in Japan – to drive expansion of our operations within both countries.
In terms of diversification, we also invested in FavStay, a Thai online start-up offering condos and villas for rent in Thailand’s top destinations. We have realised that, by embracing the sharing economy and leveraging its success, we can add value to our existing business units informed by the lessons we learn from the innovative business models of the sharing economy.
In the first three years of our strategic journey, as we invest in our foundations, we may see a drop in our top and bottom line; this is to be expected. It is important to remember, however, that we are still very much at the beginning of our journey – and this is the most crucial stage.
The best example of our long-term vision for the company can be seen with the redevelopment of our flagship property, Dusit Thani Bangkok. Originally scheduled to close for redevelopment in April 2018, we postponed the hotel’s closing date to 5 January 2019 to allow us more time to work on the design and add even greater value to the new project. The first steps to any journey are always the most significant, and we will always ensure we have the strength and capacity to go the distance and succeed time and time again.
Key to our success is our strategy. In 2018 we will enter the third year of our proposed nine-year journey towards balance, diversification and global expansion, and in line with global economic recovery and continued expansion of Thailand’s tourism industry, we expect to see a 5% YoY revenue growth.
Added value will come from continuing to strengthen our foundations, including opening at least 10 new hotels in six countries; conducting offseason renovations of our hotels in Phuket, Maldives and Pattaya, with an estimated CAPEX of THB 255 million; expanding Dusit Hospitality Education overseas with the opening of Dusit Hospitality Management College in Manila, Philippines; developing new lines of business in the food and beverage sector; signing more hotel management agreements and franchising contracts in key international markets; and introducing a new hotel brand aimed at the fast-growing market of ‘millennial-minded’ travellers.
With these foundations firmly in place, we’ll be ideally positioned to build towards a bright and sustainable future.
On behalf of everyone at DTC, I would like to thank you all for your continued support for our business and our unique brand of gracious hospitality. We look forward to creating value we can all be proud of.