Thai Real Estate Giant Bets Big On Tourism Rebound With $3.2 Billion Growth Plan

Covid-19, which keeps foreign tourists from Thailand’s beautiful beaches, bustling cities, and tranquil waters, has left more than 80% unoccupied hotel rooms. It would be reasonable to expect the CEO and founder of one of Thailand’s largest hospitality, retail, office, and property developers to get down to business. Willapa Traisorat is the CEO of Asset World Corp. (AWC) and has created a five-year growth plan worth 100 billion baht ($3.2billion) to position her company for a new boom in tourism after the pandemic. She states that it is a temporary impact she is currently dealing with. “We see enormous potential growth in Thai tourism.”

Wallapa’s optimism can be backed by visionary financial planning and muscle. AWC is one of the family businesses. Charoen Sirivadhanabhakdi, her father, is the chairman. With a net worth of over $12.7 million, she is number 3 on Thailand’s 50 wealthiest people. The remainder of the board also includes her mother, vice-chair, and her husband, who serves as a director. Family-controlled entities control the majority of the company. Wallpaper is also one of the few female CEOs who manage a primary Thai business.

AWC was also cashing up after a $1.6billion IPO in October 2019. This was just months before the pandemic. Willapa led the listing, which was Thailand’s largest-ever real estate firm. The shares now trade at roughly 4.5baht. This is down from the 6baht offering price.

Willapa said that AWC’s funding had been strengthened since the IPO. AWC also has 50 billion baht in credit lines from two Thai banks. These include 30 billion baht from Siam Commercial Bank. AWC reported that its property was valued at 72 Billion baht and had cash and receivables worth nearly 1 billion baht. However, it has only 44 billion baht for long-term loans.

AWC survived the 83% decline in tourist arrivals in 2018 from a peak of around 40 million. This was thanks to AWC’s solid financials. Revenue fell 54% to 6.1 billion baht in 2020, forcing AWC into debt. The first quarter saw a 56% decrease in visitor arrivals from a record high of 40 million in 2019.

Wallpaper didn’t let those numbers stop her from designing four new hotels with 1,600 rooms. This will add to AWC’s 17 hotels and nearly 5,000 rooms. She also bought the 287-room Sigma Jomtien Pattaya Hotels for 550 million baht.

Wallapa’s extensive experience in architecture, land planning, and architecture are evident in AWC’s most ambitious projects. A total of 30 billion Thai baht will go to redevelop Bangkok’s historic Chinatown and riverfront area. The money will also transform Pattaya, a poor-respected beach town south of Bangkok, into a destination for exhibitions and conferences.

Willapa, 47 years old, stated that they are building an integrated lifestyle group of real estate agents, and Thailand is their focus. Willapa spoke to us via video from her Bangkok office. “That strategy prepares AWC for future growth.” The hotel group includes seven properties within the Imperial Hotel Group, Charoen purchased in 1994, and The Athenee Hotel in Bangkok.

Willapa anticipates that hospitality will remain a key driver of growth and announced last October AWC’s plans to build four properties. Marriott International will manage them, including the Ritz-Carlton Reserve hotel and the first Autograph Collection property in Thailand.

“They are one among the behemoths [Thai] Industry,” says Nikhom Jensiriratanakorn, a Bangkok-based director for Horwath HTL. “They are expanding, using all their capital strategically.”

It predicted that Bangkok would lead a rebound in Thailand’s hotel industry, with a V-shaped recovery starting in 2022. Once travel restrictions are lifted, and reciprocal travel arrangements are made with key markets, such as South Korea, Japan, and China, Phuket, Phuket will follow suit by 2023.

Willapa, the second of five siblings, would go with her parents to Thailand, where she grew up. The holidays were centered around visits to family businesses.

She recalled her father purchasing properties without any development plans. This created an extensive land bank Wallapa would later work with for many decades. These properties include a prime spot with stunning views that Banyan Tree Krabi opened in October.

Willapa received her architecture degree from the Silpakorn University of Bangkok. In the U.K., she completed her master’s program in regional and urban planning at the London School of Economics. The University of Cambridge also offered her Master of Philosophy in land economics. Willapa started her career in Hong Kong as a financial analyst at Merrill Lynch. She then married Soammaphat, her high school sweetheart.

In 2001, she joined her father’s TCC Group, a diversified business. She wanted to be able to focus on the TCC Group’s property-related companies. A selection of those was then merged into AWC in 2018. The Traisorats have five kids. Soammaphat, the CEO of TCC’s former joint venture with Singapore’s CapitaLand, is a board director on AWC’s board.

He says it’s an “interesting transition.” Wallapa is highly respected for her ability to build a team of professionals and focus on working with a limited number of partners. Willapa builds strong relationships. He states that it is a clear strategy.

AWC does not have the luxury of being like other Thai hotel owners, who have their hospitality brands in Thailand and expanded internationally. Nikhom of Horwath HTL states that “this is much more similar to big international hotel investments companies.” “AWC attempts to create an ecosystem where all profit.”

Willapa plans new developments in Singapore with Banyan Tree Hotels & Resorts after recent deals with Hyatt Hotels & Marriott. Banyan Tree operates AWC properties in Krabi, Koh Samui, and has its resorts in Thailand.  “They want to become well-known not just by guests but by the investment community.”

Wallpaper has now restructured AWC’s Hotel Division and made significant improvements to its retail holdings. The wallpaper will be focusing on three large-ticket urban redevelopment initiatives: a 16.5 Billion baht mixed-use project for Bangkok’s Chinatown, an 8.1 Billion baht bet in reimagining Pattaya, and vibrant Chinatown dates back to the 18th Century. Locals love its street food and have long been a tourist draw. However, the area is not well-served by transportation infrastructures such as subway lines or parking. It is also one of the most densely populated areas in Bangkok. Willapa intends to fix that by creating an InterContinental Hotel, a Chinese boutique hotel, as well as a “very chic,” Chinese-themed hotel. Also, there will be shopping outlets in renovated heritage buildings, Bangkok’s most prominent underground retail mall, parking and storage areas, and a festival fair.

Willapa states that the Wong Nakhon Kasem project was named after an old Chinese market. However, there have been criticisms of excessive commercialization. The project will become Chinatown’s centerpiece and be the flagship.

Transforming Pattaya –a former recreational spot for U.S. soldiers during the Vietnam War, with a sleazy reputation of being a sex tourism destination–seems like an expensive gamble. Wallpaper believes otherwise. She says she believes that Pattaya’s proposed international airport and planned rail links linking Pattaya to Bangkok’s other airports by 2023 and a monorail running right by the AWC Center could transform from Savills Thailand, head of research. “But they are the only company that could pull this off.” Nikhom of Horwath TTL agrees. She notes that AWC may have the resources and the right partners, but success will depend on how fast the infrastructure is built. Thailand is well-known for its delays.

AWC’s third major project will be to expand its sprawling 12-acre Asiatique community. Willapa plans to build a luxury Marriott hotel, residences, and Bangkok’s tallest skyscraper. Adrian Smith, the legendary architect who designed Shanghai’s Jin Mao Tower and Dubai’s Burj Khalifa and Shanghai’s Burj Khalifa Tower, is joining Willapa.

Wallpaper is still cautious as O’Sullivan, a real estate professional, wonders if Thailand will repeat the 1997 Asian financial crisis-related property fire sales.

AWC’s deep pockets and cash pile have attracted multiple offers for potential deals. But, the prices have not dropped to levels she finds attractive. Willapa said that nearly 200 projects have been offered to her and that many sellers are unrealistic. She says, “It’s difficult to find a good opportunity.” “It’s still an uncertain time.”

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Adam Collins
Adam writes about technology, business and economics. With master's degree in Economics, he's presented six papers in international conferences. As a solivagant in the constant state of fernweh, curiosity is the main weapon in his arsenal.

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