THE NATION Monday, April 27, 2009 3A
BUSINESS AIS PLANS TO CUT BT2 BN OF ITS COSTS
BEST WESTERN EXPANDING SUCHAT SRITAMA THE NATION
est Western International, the world’s largest hotelchain operator, is expanding in Thailand despite political problems and the global economic crisis. The group plans to increase the number of its hotels in Asia from 140 to 200 by the end of 2010. Twelve or thirteen of the additional hotels will be in Thailand – in all the major tourist destinations including Bangkok, Pattaya, Samui, Hua Hin and Pran Buri, near Hua Hin. Regional manager Niramon Makornpruttipong said the group now managed 12 hotels in the country with 1,256 rooms and expected to almost double that figure
to 2,350 rooms over the next few years. “We are forging ahead despite the country’s political unrest and economic crisis,” said Niramon. She added that tourists across the world were shifting to economy hotels, though the group’s hotels had not been badly hit by the recent political turmoil. While 17-18 per cent of booked rooms were cancelled during the airport closures in November and December, there were no cancellations during Songkran. “We took our greatest blow in the tsunami that hit the Andaman coast at the end of 2004. Our hotels in Phuket and Khao Lak had to lay off staff after that.” In fact the Khao Lak hotel closed. The group manages hotels
around the world under the brands Best Western and Best Western Premier. In Asia, Thailand has the most rooms, followed by South Korea, Japan, the Philippines and Malaysia. However, China is likely to become a “huge” market for the group. Niramon says all Best Western hotels in Thailand are required to maintain services and improve infrastructure, for example by offering easy Internet connections, in order to keep customers happy. Best Western entered the Thai market in 2001 by establishing a regional head office in Bangkok and later opening its first property in the capital. Over the past nine years, three contracts have been terminated: a hotel in Bangkok that failed to meet the company’s standards, another in Chiang Rai for lack of customers, and the hotel at Khao Lak.
NIRAMON: The group’s hotels were not badly affected by the recent political turmoil.
N AT I O N
Group sailed through political turmoil
USANEE MONGKOLPORN THE NATION
BANGKOK DEC-CON SET TO BE FIRST LISTED INTERIOR DESIGN COMPANY SIRIPORN CHANJINDAMANEE THE NATION
Bangkok Dec-Con is set to become the first listed Thai interior design company, with the planned filing of a listing application on the Market for Alternative Investment (MAI) in the third quarter and the launch of share trading by end-2009 if the market environment is favourable. Nuchanart Ratanasuwanachart, managing director, said the company is in the process of appointing a financial adviser. “The listing status will improve the company’s image and liquidity. This will boost the company’s business potential," she said. With registered capital of Bt190 million, Bangkok Dec-Con offers
interior design and construction services and is involved in furniture production. Owned mainly by the Ratanasuwanachart family, the company plans to raise about Bt200 million from the initial public offering, whereby 25 per cent of shares would be sold to the public. The proceeds will be used to improve production efficiency for higher-value products. Nuchanart said the furniture plant is the company’s key business. Improved efficiency will result in higher-quality products and higher production volume. This will help in reducing manufacturing costs and widening the profit margin of its interior-design business, which is currently about 20-30 per cent. “We’ll be the first listed interior designer. Listing on the MAI will not
help us much financially, but we want to gain higher recognition in the industry. The listing status will enhance our credibility and create long-term business benefits,” she said. Bangkok Dec-Con has secured interior-design contracts worth about Bt500 million, and all should be completed within this year. The company has also bid to do the interior design for the Energy Complex, with the results to be known in late May. It will also join the bidding for a Bank of Thailand project and the projects of provincial administrative bodies nationwide. Nuchanart said government agencies have been the main focus of the company. Completed projects include services for Siriraj Hospital,
Rama Hospital, Ramkhamhaeng University, Novotel, Siam Paragon, the government centre and Krung Thai Bank’s head office. It has expanded to cover private projects to raise revenue, but the market has been shrinking due to the economic slowdown and some business owners’ delayed payments. At present, the value of contracts from public agencies accounts for 70 per cent of the total, and the ratio could increase. Bangkok Dec-Con claims to be the largest player in the sector of interior design services for public agencies. Bangkok Dec-Con expects revenue of about Bt700 million to Bt800 million this year, with about 70 per cent coming from interior design, 20 per cent from construction services and the rest from exports.
Export income ratio before the baht devaluation once topped 90 per cent, when products were destined to Europe, but it has shrunk as the company faces higher pricing competition, particularly from China. At present, Japan is the only export market. The firm also plans to expand its construction service next year to diversify business risk, as the economic slowdown should put pressure on demand for interior designs. “Such adjustments are the key to doing business today. The world has evolved so fast, and if we can’t catch up with the changes, we will lose competitiveness,” she said, noting that the company plans to maintain revenue growth of about 10 per cent per annum.
Advanced Info Service (AIS) plans to undertake cost-cutting measures of about Bt2 billion this year in response to the worsening economy, up from the previously planned Bt1.5 billion, its president Wichian Mektrakarn said. He added that all the AIS departments would help contribute to the cost-saving but the expense reduction must not affect AIS business and its customers. The University of the Thai Chamber of Commerce (UTCC) recently estimated this month’s political turbulence will cost the economy more than Bt142 billion. As a result, UTCC has cut its economic-growth forecast for the year further to minus 4.3 per cent, from a previous prediction of minus 2.8 per cent, expecting the business sector to experience an extended impact until the third quarter. AIS’s competitor, Total Access Communication (DTAC), has also implemented a cost-efficiency programme, encompassing all parts of its business to deal with the declining economy and the saturating market. A DTAC source said the company is targeting cost savings of Bt5 billion during this year and next year. “Now, when we have to attend an overseas meeting with Telenor [DTAC’s strategic partner], we’ll be sending only one staff in order to save cost, unlike earlier when we normally sent two staff,” the source added. AIS, which currently has more than 27 million subscribers, is targeting a 50-per-cent share of new mobile-phone subscribers in the market this year. Telecom industrialists estimate that there will be an additional 4 million to 5 million mobile-phone subscribers this year. DTAC maintains its forecast that the market will have around 4 million net additional mobile-phone subscribers this year.
Published on Apr 27, 2009
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