Report on the impact of Rajprasong protest to the company
No. ERW.039/Kor Mor Sor 028/2010
May 24th, 2010
Subject: Report on the impact of the Rajprasong protest to the company
To: President The Stock Exchange of Thailand
The protests by the United Front for Democracy against Dictatorship (UDD) at Rajprasong intersection which started on April 3rd and recently ended on May 19th has caused severe damage to the Rajprasong district as well as to all businesses in the areas, the neighboring communities, and the country as a whole. For The Erawan Group PLC, two of our hotel properties namely Grand Hyatt Erawan Bangkok and Courtyard by Marriott Bangkok which are located in the Rajprasong area have been most affected since the commencement of the protests at the Rajprasong intersection on April 3rd which later caused the two hotels to cease their services from mid-April until the present date. Based on our initial assessment, we estimate that the combined revenues from the two hotels during the period of April and May will drop by approximately Baht 150 million from the same period last year. Our 10 other hotels, variously located in Bangkok, Pattaya, Samui and Phuket have also been affected by the slowdown of the Thai tourism industry caused by such political incident. We expect to resume the services of Grand Hyatt Erawan Bangkok and Courtyard by Marriott Bangkok by May 26th.
We foresee that it would take at least 6 months for Thailand's tourism industry to recover provided that there is no further violence to destabilize the situation. As such, we have revised down our forecast of this year's average occupancy rate of our group to approximately 62% (our hotel's average occupancy rate in 2009 was 58%). We also revised down our forecast of total revenues for 2010 by 20% from the initial forecast set out in the beginning of this year. The revised revenue estimates are still higher than our 2009 total revenue by approximately 5%. The expected increase of revenue from last year is mainly contributed from new hotels we opened during the past 24 months.
As for the group's new hotel development in 2010, the construction of our 7th ibis, the ibis Bangkok Riverside, located by the Chao Phraya River is moving ahead on schedule. This new ibis hotel is expected to open as planned in November this year.
Executive Vice President