Dusit Thani holding on to cash until 2021
We have to operate with more flexibility as demand is limited, but supply remains the same. SUPHAJEE SUTHUMPUN Group chief executive, Dusit International
Dusit Thani has developed back-up plans to cope with uncertainty related to the pandemic and slowed new hotel investments to preserve cash flow.
“Given the ever-changing situation, we have to preserve sufficient cash flow until the end of next year,” said Suphajee Suthumpun, group chief executive of Dusit International.
Dusit Thani has cash on hand of 1.26 billion baht and unused credit facilities of about 1.25 billion.
Plans to expand villas under the Elite Havens brand in Australia and Europe were already put off, as well as a project to buy new hotel properties in the UK and Japan.
The company will continue its mixed-use project, Dusit Central Park, which should be completed when the market returns to normal, focusing on the food business in the interim, she said.
The company prepared a financial model based on three scenarios. The best case scenario is tourists being allowed entry to Thailand by the end of this year in limited quantities, ideally long-stay tourists.
Mrs Suphajee estimated the most likely scenario is leisure tourists will start to pick up in the middle of next year.
Dusit Thani has to streamline work flow in the organisation, such as by grouping marketing and sales departments into regional clusters or consolidating the headquarters, instead of letting each hotel work separately, working to build a technological transformation, she said.
The company wants to alter its business model by leaning on partnerships with hospitals to emphasise wellness and healthcare segments as well as promoting more sustainability, said Mrs Suphajee.
“We have to operate with more flexibility as demand is limited, but supply remains the same,” Mrs Suphajee said. “If we keep the same rules such as strict check-in and check-out times, we cannot move forward.”
The company also opted for an asset optimisation plan to sell non-strategic assets worth 8 billion baht to help improve its financial status without raising capital.
Dusit Thani has 340 properties in 15 countries, of which 40 are hotels, including new properties opening this year in China, Thailand, Qatar and Guam. A new hotel in Singapore is scheduled to open in the fourth quarter.
“Attracting tourists while mandating a 14-day quarantine is difficult, but it’s impossible to reopen the country without a quarantine requirement or provide a shorter quarantine period as some cases are asymptomatic,” Mrs Suphajee said.
She suggested Thailand apply alternative quarantine models such as the one used at Dusit Thani Maldives, where guests can leave their rooms to visit restricted areas supervised by hotel staff who are responsible for a specific groups of guests and are isolated.