Dusit expects high returns from its investment in Maldives

 The US$80 million (Bt2.5 billion), 100-villa resort melds Thai and Maldivian architecture and services.
It is wholly owned by the company and is its second foreign property after the Philippines.
Dusit, one of the Thailand’s largest hotel chains, has drawn up a business plan that focuses on pursuing more opportunities outside the country. The strategy is expected to boost revenue, diversify risk, build a global brand and increase awareness of the brand in the international market.
CEO Chanin Donavanik told The Nation that Dusit is moving slower to Maldives than other Thai hotel operators such as Minor and Central. The company spent three years looking for the right location and acquired a hotel on Mudhdhoo Island on Baa Atoll, near the country’s first Unesco World Biosphere Reserve.
The full launch of the hotel in May is good for the company, as a regional airport will start operating on the island in April. Now, going to the island requires a 35-minute flight by seaplane from the capital Male.
About 50 Thai staff will be sent to Maldives to work with local and foreign employees. The resort needs 300 staff to ensure smooth operations.
“We want to blend Maldivian with Thai culture as our service character there offers more Western-style services,” Chanin said.
“We want to make sure that our guests are happy with the value they get for their money from our services.”
As a premium service island, the average room rate is US$1,000 per night. This will allow the company to enjoy a better return on investment than in Thailand.
With a good environmental preservation policy, Maldives has stringent restrictions on wastewater discharge. Not a single drop can flow to the sea.
About 10 Thai hotels have already opened on Maldives, accounting for 10 per cent of the country’s total market. The investors are Minor Group, Central Group, Anantra Group, Amari, Hyatt, Dusit Thani and individuals. Maldives has about 1,000 islands but only 100 hotels.
Due to government planning, the supply of hotel rooms in Maldives is not growing as fast as in Thailand, which faces a glut of rooms at every tourist destination now.
Besides excess beds, the political uncertainty in Bangkok during the past four to five years has caused business interruptions. Dusit Thani in particular was hard hit by the political turmoil in the past two years.
“The political unrest in Bangkok in the past four to five years was the worst case for the hotel industry,” he said.
Another important factor is the downtrend in the European economy, as 30 per cent of hotel guests come from that region.
To spread risk, the company is exploring more ventures overseas, which could take any of three forms – joint investment, management contract or 100-per-cent investment. It will focus on key markets in the Middle East, India and China.
The group will not open many more hotels in Thailand, as it has 10 properties in all key markets, but is eyeing potential destinations such as Samui Island and Phuket.
Chanin also plans to create wealth in the Bt4.1-billion Dusit Thani Freehold and Leasehold Property Fund, which was listed on the Stock Exchange of Thailand in January last year.
The fund holds ownership in three hotels and resorts – Dusit Thani Laguna Phuket, dusitD2 Chiang Mai and Dusit Thani Hua Hin. Chanin is looking for two to three more hotels to increase the fund’s assets.
“We need to set up a long-term fund, which attracts foreign investors,” he added.