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 Thailand Based Amarin Plaza Plc Shifting Focus to Hotels; Plans to
 Invest US $72 million in Two New Hotels and Renovations for the
 Grand Hyatt Erawan and the JW Marriott

By Sukanya Jitpleecheep, Bangkok Post, Thailand
Knight Ridder/Tribune Business News

Mar. 9, 2005 - Amarin Plaza Plc plans to invest 2.76 billion baht over the next two years as the company shifts its focus to being a hotel operator over property development.

Eighty percent of the new investments will go towards hotel operations, according to Kasama Punyagupta, Amarin's president and chief executive.

A total of 2.1 billion baht in investments are planned for two new hotels in Phuket and Bangkok, he said at an analysts' briefing at the Stock Exchange of Thailand yesterday.

Another 600 million baht will go into renovations and improvements at the company's flagship hotels, the Grand Hyatt Erawan and the JW Marriott, as well as improvements to the Amarin Plaza and Ploenchit Centre malls. Funds for the new investments will come from internal cash flow.

Mr Kasama said the company would invest 1.15 billion baht in a new five-star hotel located on 72 rai on Naka Yai Island in Phuket this year. The 70-unit property is expected to open in early 2007 with rates of $400 per night. A management contract with an international hotel management company would be finalised within two months.

"There is huge business opportunity for such resorts, as there are only a few competitors, not only here but overseas," he said, pointing to Bali, the Maldives and Langkawi as the closest competitors.

In Thailand, competing resorts offering a similar concept included the Banyan Tree, Amanpuri, Four Seasons and The Chedi.

Mr Kasama said another 994 million baht would be invested in converting the Parklane Mansion in Bangkok into a new four-star hotel. The 300-room hotel is expected to open in the first half of 2007, with a room rate set at $70 per night and competing in the same market as the Holiday Inn, the Landmark, Sofitel Silom and Pathumwan Princess.

Amarin Plaza would look to develop hotels from three- to five-star in a number of new locations under the company's new growth strategy, Mr Kasama said.

As for Ploenchit Centre, the company will reduce its retail space to 5,356 square metres from 9,903 sq m now while boosting office space to 29,635 sq m from 20,282 sq m at present.

New tenants would include higher-end stores such as Starbucks, Haagen-Dazs and Lee's Cafe{AAC} to help appeal to middle-class professionals working in the area.

Mr Kasama said Amarin Plaza would be similarly repositioned, with space focused on cosmetics and fashion accessories.

Amarin Plaza reported 2004 net profits of 339.1 million baht, up from 315.5 million the previous year. Revenues in 2004 were 2.53 billion baht, down slightly from 2.59 billion in 2003.

The company attributed its stronger profit gains to a 11.3 percent rise in hotel revenues to two billion baht in 2004, helping offset a 28 percent decline in non-hotel income.

Operating profits were up 15 percent in 2004 to 528.2 million baht, with operating income up 0.8 million to 2.48 billion. Operating expenses fell 4.1 percent in 2004 to 1.68 billion baht.

For the Grand Hyatt Erawan, operating income rose 6 percent to 1.01 billion baht in 2004. Room revenue rose 10 percent in 2004, with occupancy of 68 percent compared with 60.1 percent in 2003. Average room rates, however, fell 3 percent to 5,149 baht in 2004 due to the stronger baht.

Operating income at the JW Marriott was up 18 percent in 2004 to 988 million baht, with occupancy of 84.2 percent compared with 76.1 percent in 2003.

Average room rates rose 9 percent to 4,027 baht, while room revenue was 547 million baht for the year, up 30 percent from the previous year. Declines in occupancy rates at both the Amarin Plaza and Ploenchit Centre resulted in a 2 percent fall in rental and service revenues. Non-hotel income fell 28 percent due to the lack of department store and restaurant sales.

Shares of Amarin closed yesterday on the Stock Exchange of Thailand at 2.6 baht, down two satang, in trade worth 1.6 million baht.


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