INTERVIEW-Thai Erawan says worst is over, wary over politics

BANGKOK, Sept 16 - Erawan Group, a Thai hotel firm that runs the five-star Grand Hyatt Erawan and JW Marriott in central Bangkok, is confident earnings will turn round next year as long as political unrest is contained.

Chief Executive Officer Kasama Punyagupta told Reuters Erawan should be a prime beneficiary when the tourist industry recovers next year, and he forecast hotel revenue growth of at least 15 percent per year over the next three years.

"Occupancy rates are now ticking up and so are bookings," Kasama said in an interview. "Of course, we won't be expecting to get back to levels of travel we were at any time soon, but at least the worst is over."

Kasama said Erawan, Thailand's fourth-largest hotelier, should make a profit next year if, as expected, the overall sector recovered, although he did not make a specific forecast.

Four analysts polled by earnings tracker Thomson Reuters I/B/E/S estimated a net profit of 350 million baht ($10.4 million) for 2010, turning round from an expected net loss of about 87 million this year.

"Between now and the year-end will be a critical period. We know that the high season is coming, but if there's any political event, turning into something serious, it would absolutely add extra damage," Kasama said.

Thailand is going through a political crisis and protests are picking up, with a big anti-government rally planned for Saturday to mark the third anniversary of a military coup.

Erawan posted a net profit of just 78 million baht in 2008 -- down about 80 percent from 2007 -- on sales of 3.38 billion as political unrest undermined tourist and business travel.

But occupancy rates on Samui island, a main tourist destination, had improved to 90 percent, while tourist arrivals at Phuket airport were showing signs of stablising, Kasama said.

The hotelier has scaled back investment this year to 1.3-1.4 billion baht from 2.5-2.8 billion, delaying three projects, but it is still on track to open two new hotels in 2009 to add to the 10 it already has, boosting room numbers to over 3,000.

Erawan, whose rivals include Oriental and Central Plaza, runs the Ibis brand in Thailand, mostly targeted at budget travellers.

It has five Ibis hotels now. One of the two new hotels opening later this year is an Ibis and another one should open next year, Kasama said.

Erawan shares have risen 59 percent this year, recovering from a 65 percent slump in 2008 when political strife hit the industry, which employs about 1.8 million people out of a Thai population of about 67 million.

Shares in Erawan were up 8 percent at 2.42 baht at 0835 GMT while the broader index was up 1.1 percent. ($1= 33.82 Baht)