Sharp loss at hotel group Banyan Tree as chief blames Thai floods, bad economy

3,000 cancelled room nights by October for Thailand, booyah!

According to a release, the recent flood in Thailand has resulted in cancellations in hotel bookings as well as slower pick-up in forward bookings in Bangkok and Phuket. As at 31 October 2011, there were 3,166 room nights (US$541,000) which is equivalent to 5% of forward bookings, cancelled. The forward bookings for 4Q11 for owned hotels in Thailand are 5% lower than last year.

Mainboard-listed Banyan Tree Holdings Limited announced its 3rd quarter results. Revenue decreased 3% to S$66.2 million and EBITDA increased 29% to S$6.8 million. In terms of PATMI, the company had a loss (S$2.9 million) vs profit (S$0.7 million).

Mr Ho KwonPing, Executive Chairman of Banyan Tree said, “In the past few weeks, the situation in the global economy has deteriorated sharply, exacerbated by stalling recovery in the US and the on-going financial crisis in Europe. This will likely affect the travel industry as holiday makers, business travelers and MICE (meetings, incentives, conferences and exhibitions) get increasingly cost conscious. The recent flood in Thailand has also resulted in cancellations in hotel bookings and slower pick-up in forward bookings in both Bangkok and Phuket. We therefore expect a challenging quarter ahead notwithstanding it being the high season of the year.”

The Group’s cash and cash equivalents decreased by S$4.9 million or 4% from S$133.1 million as at 30 September 2010 to S$128.2 million as at 30 September 2011. The decrease was largely due to repayment of bank loans and medium term notes, dividends paid to shareholders of Banyan Tree and minority shareholders of Laguna Resorts & Hotels Public Company Ltd, funded by net proceeds arising from sale of Dusit Laguna Phuket (“Dusit”) and Laguna Beach Resort (“LBR”) and existing cash balance.

The Group’s total operating expenses for 3Q11 decreased by S$1.6 million. Other than cost of properties sold and administrative expenses, all other categories of expenses were lower than last year mainly due to cessation of Dusit and LBR hotel operations following their sale. Higher cost of properties sold was due to higher revenue recognition of properties units, while higher administrative expenses was mainly due to costs incurred on the closure of Angsana Laguna Phuket (previously Sheraton Grande).