Italthai Group accelerates the recovery of its “hospitality & lifestyle” business and strengthens its “construction equipment and engineering services & construction contractor” business following post-COVID-19 recovery. Anticipating a gradual resumption of travel and its ability to balance its short term needs with long term ambitions, the Group is anticipated to open 12 new hotels over the next one year as it concurrently works on the reopenings of its temporarily closed hotels. Looking ahead, the Group proposes “public and private sectors to revise their long-term strategies and extend the recovery measures to all entrepreneurs until the end of this year.
Mr. Yuthachai Charanachitta, Group CEO, Italthai Group, admitted that like most other organisations, Italthai Group has been affected by the impact of the coronavirus outbreak (COVID-19). As the company has diversified business interests in “hospitality and lifestyle” and “construction equipment and engineering services & construction contractor”, we remain committed to continuous operation while staying focused on our long term growth, with the construction business maintaining stability throughout the pandemic. Even though the hospitality business witnessed significant impact, recovery has commenced with the Group making plans to reopen its hotels in coming weeks and months, and continuously working on the opening of 12 brand-new hotels across the Asia-Pacific region.”
Following the pandemic, the Group has assessed the impact of each business unit by level as following:
- Moderately-impacted, which includes Italthai Engineering Co., Ltd. (ITE), an engineering, procurement, and construction (EPC) service provider. Although the construction of high-rise buildings has delayed slightly, the group has maintained continuous operation. The construction of other projects including power stations as well as industrial and petrochemical plants has experienced slight impact.
- Significantly-impacted concerns those in hospitality & lifestyle sectors like hotels, restaurants and shopping malls. This crisis is unprecedented and the biggest the company has experienced in over five decades of operation. With a large number of hotels temporarily closed during the height of the virus preventative measures, the Group’s operating properties in Thailand and overseas saw their revenues decrease 60-70% compared to the same period a year earlier.
Fortunately, as the group has a diversified multi-brand and multi-segment portfolio with properties targeting both the four and five star short-stay as well as the long-stay serviced apartment category, the hospitality business has been able to weather the storm with a more stable outlook.
The COVID-19 situation also presented an unprecedented opportunity for the Group to expedite the renovation of a number of properties in Bangkok including Amari Watergate Bangkok and Mandarin Oriental Bangkok.
Using the rare downtime wisely, the Group also placed added emphasis on employee training, with team improvement content and materials delivered through an online platform. The training focused on preparing employees for revised operational and service protocols that are relevant in a post-COVID world. ONYX Hospitality Group also launched “ONYX Clean”, a safety and hygiene assurance programme that impacts every stage of the guest journey from arrival to departure. ONYX Clean has been implemented across every property including those operating as Amari, OZO, Shama and Oriental Residence Bangkok.
“In addition, ONYX Hospitality Group is on track to open at least 12 brand new hotels over the next one year period. It is in our human nature to travel, to reunite, and to dine out and gather over social occasions. ONYX Hospitality Group is committed to expanding its portfolio across Asia Pacific including China. We’re confident that tourism will prosper once again.”
Meanwhile, the “construction equipment business” operated by Italthai Industrial Co., Ltd. (ITI), which is as severely impacted as the automobile industry, has pivoted to offer a wider range of products, to cover asphalt pavers, asphalt plants, concrete pavers, electric trucks and rotary drilling rig.
Supplementary markets will be eyed, to encompass the agricultural sector and industrial estates. A new branch has also been open in Chiang Mai to support the marketing of those products to small-to-large industrial operators as well as the agricultural sector throughout the northern part of Thailand.
Mr. Yutthachai asserted that COVID-19 challenges all business operators throughout the world to review their business strategies and come up with new and innovative ways to meet the changing demands of its customers, both B2B and B2C. He shares observations that those with overseas-connected value chains will encounter challenges until early next year and that the major variable factors defining the pace of economic recovery are 1) disease containment 2) stimulus packages and 3) vaccine development.
Assuming that new coronavirus outbreaks continue to be mild, these businesses will gradually recover from the first quarter of 2021. Meanwhile, those depending on domestic supplies and demand are expected to recover from the fourth quarter of this year.
Despite the easing of virus preventative measures, Thailand’s tourism industry will not immediately recover, he said, as the pandemic has influenced a tremendous change in consumer behaviour. Consumers will place added emphasis on cleanliness and hygiene. Meanwhile, Thailand has to be more careful about reopening the country for foreign travellers as new outbreaks could present the danger of pulling the economy back to negativity.
“The public and private sectors need continued readjustments. Private businesses must maintain a robust and flexible mindset to satisfy short-term demands which will in turn impact their long-term plans. It might take 12-18 months for the hospitality and airline businesses across the globe to recover, or until the vaccine can be developed. In Thailand, it may take at least 24 months before the volume of foreign arrivals will return to 2018 levels. But once normalcy resumes, the overall economy will recover quickly in tandem.”
As a business operator, he urged the Thai government to extend remedial measures until the end of this year. These measures include a reduction in employers’ contribution to the Social Security Fund and tax deduction for three times the wage expenses. Thai visitors should also enjoy tax deduction for their stays at domestic hotels during the 2020-2021 tax years.
Meanwhile, the government should speed up the implementation of the “We travel together and moral support” schemes so that businesses can resume operations. The government should also consider reopening for foreign tourists, potentially starting with the safe implementation of the “travel bubbles” with close consultation with the Ministry of Public Health to avoid potential new outbreaks.