Asset World Corporation (AWC), Thailand’s leading integrated lifestyle real estate group, reported operating results for the third quarter of 2020 (July – September) with a net loss of 620 million baht, an improvement of 29.3% from the second quarter of the year, with a total revenue of 1,225 million baht, or a decrease of 61.9% from 3,213 million baht recorded in the same period of last year.
The performance reflected the results of continued impact from the COVID-19 pandemic, despite the government’s approval of the sixth phase of relaxation of lockdown measures which allows entry for certain foreign traveller arrivals, but still restricted leisure travelers. However, the total income in Q3/2020 rose 63.5% from that of the previous quarter, indicating the continued recovery and improvement of the domestic tourism sector.
In addition, the company achieved effective cost management with the ratio of operating expenses to operating income in Q3/2020 decreased 18.9% from Q2/2020, as a result of organization restructuring program together with the implementation of cost control and efficiency initiatives, contributing to a solid foundation to ensure optimal cost and operational efficiency in a sustainable manner.
Wallapa Trisorat, CEO and President, Asset World Corp Public Company Limited or AWC, said that “Since July 2020, almost all AWC affilated hotels, except Sheraton Samui Resort, were reopened, and starting the end of August, our two hotels, Le Meridien Bangkok and DoubleTree by Hilton Sukhumvit Bangkok have joined as the Alternative State Quarantine (ASQ) facility. This had made the average occupancy rate of our affilated hotels continue to increase. However, as the impact of the COVID-19 pandemic still prevailed, with foreign tourist arrival restrictions to travel to Thailand, coupled with our relief measures for tenants by reducing rental fee in our retail properties, AWC recorded a net loss of 620 million baht in Q3/2020, despite the continued benefits from our balanced and diversified portfolio investment strategy which enables the company to generate a stable cash flow.”
The company’s Hospitality Business was still affected by the overall international tourism downturn. Nevertheless, AWC has continued to launch several domestic tourism promotion programs such as Thai Holidays Lifestyle, Gift of Hapiness for the company’s affiliated 16 hotels to support the Thai government’s “We Travel Together” program, and Bangkok Holidays Lifestyle, Gift of Happiness to stimulate the tourism market in Bangkok. These programs received an overwhelming response from Thai customers. For instance, Bangkok Marriott Marquis Queen’s Park hotel has received over 5,000 bookings during the program period. In addition, to support the government’s tourism promotion policy as well as to strengthen the tourism industry and the Thai economy to recover and move forwards, the company launched AWC INFINITE LIFESTYLE: INFINITE POINT OF HAPPINESS, a new privilege program for staying and enjoying a variety of F&B and services at 15 AWC’s affiliated hotels and resorts nationwide.
With all the programs, AWC affiliated hotels recorded a remarkably higher revenue generation index (RGI). Hotels in Bangkok, such as Le Meridien Bangkok and Bangkok Marriott Hotel The Surawongse achieved RGI of 268.2 and 252.9 respectively in September 2020. Hotels in major tourism provinces such as Phuket Marriott Resort and Spa, Nai Yang Beach and Hua Hin Marriott Resort & Spa recorded RGI of 387.0 and 146.3 in Q3/2020, respectively. The strong recovery of the Hospitality Business is reflected by a significant increase of revenue, from 126 million baht in Q2/2020 to 450 million in Q3/2020, representing an increase of 257.1%.
The revenue of the Retail and Commercial Business rose from 632 million baht in Q2/2020 to 771 million baht in Q3/2020, or an increase of 22.0%. This was due to the recovery of retail projects with a continuous increase in customer traffic after the announcement of the third phase of relaxation of lockdown measures, and the reduction of discount on rental fee for tenants according to the number of increasing customers. The Office business continued to generate a stable income on a regular basis, compared with the same period of the previous year.