Dusit Thani Plc aims to increase its food business revenue to 2.5 billion baht by 2027, raising its contribution to total revenue to 25-30%.
Suphajee Suthumpun, group chief executive of Dusit, said of the four business units that the firm diversified into since 2016, food will see the fastest growth at around 15-20% per year, with annual earnings of around 1 billion baht.
She said since she joined Dusit in 2016, the company has completed the first three-year diversification phase that included expansion to new businesses, away from its original core of hotels and education.
The company's current second phase has seen it focus on strengthening business developments and trying to balance portfolios across all business units.
Dusit has four affiliates in the food business that involve the whole supply chain: raw materials, manufacturing, distribution, and retail and food outlets.
In the second quarter Dusit acquired a 55% stake in Bonjour Asia, owner of Port Royal and Bonjour Bakery, which has 59 branches in Thailand and one in China.
Port Royal also owns a factory in Rayong that has spare production capacity of around 50%, which could be utilised.
Dusit Thani's food business is run through an investment by a subsidiary, Dusit Foods, and will be earmarked for at least 200 million baht of investment over the next five years, from 2023-2027, said Mrs Suphajee.
She said PTT Oil Business and Retail's (OR) acquisition of a 25% stake in Dusit Foods in August, through OR's wholly-owned Modulus Ventures Co, could allow Dusit to expand its food business into OR retail services, such as selling bakery products in branches of Cafe Amazon.
"The food business showed the most promise in the pandemic-hit economy, particularly when our core business of hotels was hampered by border closures," said Mrs Suphajee.
Average occupancy at its hotels recovered to 64% in July after guest numbers plunged during the pandemic. The company hopes to reach an occupancy rate of 70% by the end of this year, with revenue fully recovering by 2023, she said. It also hopes to move back into profit next year.
Dusit expects hotels to contribute 60-65% of total revenue by 2027, down from an average of 90% over the last seven years, while revenue from food rising to 25-30%, followed by food and hospitality education at 7-8%.
The company expects to have at least 90 hotels in five years as 45 are in the pipeline. Next year Dusit plans to open two hotels in Japan via joint ventures.
