2016 was a difficult period for most businesses, how has IMPACT fared?
During the first half of 2016 business was in line with expectations, however during the second half of 2016 was expectedly weak and IMPACT’s revenues declined by 10% and net profits by 15% for the year. It was sad period for Thailand with the passing of His Majesty the King of Thailand and out of respect to His Majesty exhibitions and entertainment events were postponed. At IMPACT, we took it upon ourselves to fully refund all customers during this period because it is not ethically appropriate to continue with normal business practices when such an unfortunate event for the country occurs.
What is the outlook for 2017?
Our target for this year is for revenues to increase by +7% to THB 2,046 million with an expected occupancy rate of 50% and approximately 950 events to be held this year. Currently 60% of venue service are from repeat customers, some return annually others every two years. The remaining 40% comes from meetings, weddings, concerts and so forth. In order for IMPACT to be a first choice for these customers is a combination of the facilities quality which includes design and decorations, pricing strategies and multiple options of rooms and venues that may hold small or medium sized events. Because of IMPACT’S size and quality we are able to host the larger events and meetings thus the aim is to ensure we can attract the smaller to mid-size meetings to utilize our facilities as well. Also given that we want to attract more international events we are planning to work with airlines to create synergies including packages such as free shuttling, discount on hotels, as there are currently more than 1,000 hotel rooms available in the area, this would then increase traffic for all venues and facilities in the area. The benefit of being a single owner of these assets is that we are able to streamline operations and logistics which is unparalleled in Thailand and therefore we are the ideal partner for any event or exhibition organizer.
Are there plans to add additional assets to the REIT?
As a manager we have to focus on the benefits to the unitholders. There are prospective assets that have the potential to be added to the IMPACT Growth REIT in the coming years but we do not commit to inject new assets yet. We need to ensure from both Bangkok Land Plc’s and IMPACT’s that the strategies are aligned, the business needs and market conditions in the future to ensure that there is fair dealing for all parties. Our strategy is to continue enhancing the value of the existing assets through renovations and service offerings, and that the REIT may benefit from the continued development in the Muangthong Thani area. For example with the upcoming Water Park this will complement the Muangthong Thani area as there will be additional hotels, thereby driving visitors both domestic and international, thereby increasing the potential for additional activities held at IMPACT.
What have been the key success factors for IMPACT?
Our customers have three main requirements, location, size and services all of which we are readable able to provide. Customer satisfaction is the key success factor as recurring business is a significant portion of our revenues. We continually renovate and enhance our facilities, and understand what our customers’ needs and requirements are. As the economy, industries and businesses continue to grow, demand for larger spaces increases in Thailand. Finally, being located in Thailand does have its advantages because it is a natural destination with a well-known reputation and is arguably the center for regional exhibitions.
What are the biggest risks facing your business?
The key factors for us are maintaining and continually improving the quality of our service and offerings. By focusing on these factors we can mitigate the risk of losing customers as a result of our efforts.
As long as customers are able to earn a profit, it would be considered too risky to shift to a new venue as they themselves may earn less.
Where do you see IMPACT in five years from now?
With the developments that we are undertaking our viewpoint is that IMPACT potential is not yet fully realised. There is the potential to double our business over the next five years as the full potential has yet to be reached. With the developments undergoing of new hotels, offices, and entertainment combined with the recent expansion of the mass transit lines where there could be an additional two stations added onto the Pink line for a station to be located at Challenger Hall 1, we are positive on the potential of IMPACT being realised.
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