Resort-developer Banyan Tree sank deeper into the red with losses of $49.8 million in 2H2020 ended December, down from earnings of $5.2 million in the year before.
This follows a 61% plunge in its revenue to $82.5 million in 4Q2020 from $213.97 million in the year before that came as a result of the travel restrictions imposed globally to curb the spread of the coronavirus.
Specifically, hotel investments contributed to less than 20% of 2H2020 revenue as compared to the 37% it accounted for 2H2019.
Hotel occupancy levels increased by 29% in 2H2020 as compared to 26% in 1H2020.
China saw healthier occupancy levels as demand was sustained by a surge in domestic tourism.
Conversely, demand was poorer in the Asia Pacific region, specifically Thailand where most of the group’s owned hotels are located, due to the absence of international travelers.
SEE:The great outdoors
Still, the group reports that its hotel revenue per occupied room, or RevPar, was up by 11% to $87 in 2H2020 compared to the preceding six-month period. However, RevPar was down by 40% when compared to 2H2019.
Similarly, RevPar dropped by 43% between 4Q2020 and 4Q2019 in the Maldives – where the group has three operating hotels – due to testing-only quarantine-free requirements for international arrivals.
Meanwhile, Banyan Tree’s fee-based segment saw a drop in its revenue due to a reduction in hotel management fees, revenue from Spa/Gallery operations, royalty income and recognition of architectural and design fees.
In the same regard, the property sales segment reported lower revenue as only 33 units were recognised in 2H2020, compared to 209 units in the year before.
For the full-year ended December 2020, Banyan Tree posted losses of $95.8 million, as opposed to earnings of $651,000 in FY2019.
On a fully diluted basis, this translates to losses per share of 11.41 cents, as opposed to gains of 8 cents a share in FY2019.
With this, Banyan tree’s net asset value per share was 55 cents in FY2020 compared to 57 cents in the year before.
Revenue for the year had plummeted by 55% to $157.8 million, as compared to $346.95 million in FY2019.
The developer’s core operating profit – which records operating profit excluding one off gains or losses – came in at $4.3 million, a 93% shrinkage from the $65.1 million recorded in the year before.
The near-break even core operating profit was achieved through effective cost containment measures which reduced operating costs by 46% y-o-y, the group notes.
This was complemented by a 11% uptrend in hotel revenue per occupied room in 2H2020, compared to 1H2020.
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Additionally, the group expects the reorganisation exercises it did last year to yield $15 million of annualised recurring cost savings. This represents about 20% of operating costs.
Executive chairman Ho Kwon Ping acknowledges that 2020 “has not been an easy year, but we are determined to build back better”.
“We have taken the opportunity to lay the foundations of a more agile, resilient and responsive organisation, while re-centering on our core purpose of wellbeing and sustainability which, fortunately for us, has become even more relevant post-Covid,” he adds.
In line with this, the group has opened three new properties in Hacienda (Mexico) Krabi (Thailand) and Penang (Malaysia). It had also signed 20 hotel management agreements in 2020, adding to its pipeline of 35 properties which are slated to open over the next three years.
Within the next 12 months, the group expects open eight new resorts, which will increase its room count by 16%. It also expects to launch seven spas, with six under management.
Shares in Banyan Tree was up 0.5 cents or 1.89% to close at 27 cents on Mar 1.
