May 23, 2003 - Laguna Resorts & Hotels, the largest hotel group in Phuket, insists that it has no plans to lay off any of its 4,000 staff. 

Company executives say the group's property and hotel operations are expected to improve in August. 

Laguna Resorts earlier this month announced a voluntary unpaid leave programme for its employees to help cut costs in the wake of falling tourism arrivals on the resort island, where Laguna operates five major hotels, spas and a golf course. 

Deputy Managing Director Bill Barnett said residential sales could help offset the slumping revenue of the hotel business. The outbreak of Severe Acute Respiratory Syndrome has caused a decline of roughly 20 percent in occupancy rates in the current low season, compared with the same period of last year. 

"The occupancy rate is about 35-39 percent in the present quarter, compared to the 50-60 percent average of the low season," he said. 

"We do hope occupancy could pick up in August." 

Regarding the scheme offered to employees, Mr Barnett said that executives could take leave without pay for four days per month, while managers and department chiefs would get three days and other staff two days. 

The measure will likely be implemented for two months. Initiated by the group's chairman, K.P. Ho, the programme has been adopted at all of the group's 12 hotels, including those in the Maldives, Indonesia, Australia and the Seychelles. 

Annual tourist arrivals in Phuket are estimated at four million but the number could be halved this year due mainly to the regional spread of Sars. 

The group is taking advantage of the booming residential property market in Phuket to launch the first phase of Laguna Village which comprises 300-500 townhouses on a 700-rai plot on Bang Tao Bay Beach. 

To be launched in the third quarter, the project follows a 1,500-rai Laguna development that began in the middle of last year, according to deputy managing director Bill Barnett. 

"We expect to sell 60-70 units of the existing project this year with house prices ranging between 21 million baht and 23 million baht, and up to 30 million baht for the `hometown' area," he said. 

The prices of the new project will be finalised close to the launch date and may be higher or lower than at the existing one, depending on market demand, he added. 

The existing project is designed for those spending vacations in Thailand but Laguna Village targets permanent residents, Mr Barnett said. 

"We have seen rising demand for luxury housing projects in Phuket in the last two months, especially from high-profile expatriates working in Singapore and Hong Kong," he said. 

Also, Laguna has prepared a 300-rai plot for the expansion of its Banyan Tree Phuket Hotel, the group's main revenue earner, with construction scheduled to begin in the first quarter of next year. The existing building has 150 rooms, with prices ranging between US$50 (about 2,100 baht) and $150 per night. 

Laguna shares closed unchanged yesterday at 36 baht in thin trade worth 97,000 baht. 

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(c) 2003, Bangkok Post, Thailand. Distributed by Knight Ridder/Tribune Business News.