The Company expanded to the real estate business since the last quarter of 2019 by establishing Sathorn Project One Company Limited as a subsidiary with a registered capital of 200 million Baht in order to operate the real estate business. The Company purchased land on the intersection of Sathorn Rama 4 Road, a business district in Bangkok, to construct and develop the Company’s first flagship hotel. This luxury hotel, expected to be completed by 2024, will have 38 floors and 209 rooms under PDI’s own brand and manage a project value of 1,500 million Baht.
In 2020, the Company successfully expanded to a new real estate business according to their business strategy focused on investing in quality assets with high growth potential to create business value for strong and sustainable growth. In the past year, the Company has successfully completed their negotiation to acquire two new world-class hotels; “Four Seasons Hotel Bangkok at Chao Phraya River” and “Capella Hotel Bangkok” with net worth of 10,500 million Baht. The Company is entitled to hold 51 percent of the registered and paid-up capital with a total value of 5,500 million Baht in Urban Resort Hotel Co., Ltd. (URH) and Waterfront Hotel Co., Ltd. (WFH) as both investment of those shares values at total 2,805 million Baht. URH and WFH are companies holding property and land rights, licenses and other various rights relating to the operation and management under the brands of “Four Seasons” and “Capella” accordingly.
Both hotels, new and super luxurious with have the construction area of more than 140,000 square meters, many times larger than other hotels, locate at a large area of 35 rai with 350-meter long adjacent to the Chao Phraya River which is a major landmark of Bangkok and attracts both Thai and foreign tourists. As a Boutique Super Luxury hotel, Capella offers 101 villas and suites where guests will enjoy with stunning view in every room riverside views while Four Seasons is a resort in the central city with 299 rooms with unique design of harmony between high ceiling and water flow concept. Its 40% of all rooms have riverside views. In addition, both hotels have 11 F&B outlets many of which are managed by Michelin Starred Head Chef and superb facilities with stunning views of the Chao Phraya River especially, the banquet hall of almost 5,000 square meters where accommodate 3-4 simultaneous supreme events with 4,000 car parking lots.
Even during the COVID-19 situation, both hotels opened at the end of last year with exceptional response than expected especially in the outstanding dining room and banquet hall which receive excellent feedback among Thai customers. This continuous reservation went beyond the sales target. At the end of 2020, Four Seasons had a total of 42 catering events while Capella had 29 reservations during COVID-19 crisis recession. Therefore, the Company is confident that the tourism business will get rapid recovery. As soon as the hotels fully operates, the Company will recognize the revenues from both hotels much higher than ones from renewable energy business.
Acquisition of these two new global hotel brands definitely marks PDI’s first step in the hospitality business because it is an investment in potential assets to generate strong and sustainable returns for the Company, especially when the business has entered the recovery period from the COVID-19 outbreak.
Overall Tourism Industry
Thailand tourism industry is still one of the most important business sectors in the country as for 20 percent out of the country’s gross domestic product (GDP). Tourism has steadily grown at 8.2 percent in the past ten years before the COVID-19 crisis. In 2019, there were 40 million foreign tourists to Thailand and Bangkok was No.1 tourism city with 23 million foreign tourists from all over the world. The COVID-19 crisis seriously affects the tourism industry and the hotel business and this is not the first crisis that Thailand has faced. From the statistics over the years, the number of foreign tourists recovered rapidly despite the crisis or serious situations such as tsunami disaster, SARS epidemic and a coup d’état. Thailand is in a strategic location with approximately 13 million Chinese and Indian tourists per year, who spend an average of approximately 42,000 Baht per person. Acquired by the Company, Four Seasons and Capella are in the super luxury hotel business group normally have 70% of the overall occupancy rate with specific target customer group; that is, both foreign and Thai businessmen and tourists with high purchase power. As their location along riverside can beat only 4-5 competitors and have a reservation of approximate 2,000 rooms, they are in a unique and high potential market opportunity.
PDI - Hospitality
- Four Seasons