Economy hotel brand Goya Hot Springs Hotel & Spa (高野大飯店) expects revenue to stay flat next year from this year as it seeks to increase the number of domestic tourists to ease potential losses of Chinese guests following the presidential elections next month, senior company officials said earlier this week.
The Taitung-based hospitality company, which operates seven resort hotels in Taiwan, plans to make its first foray into Kaohsiung next year and increase its number of hotels to 10 in five years, company chairman Liu Chin-lan (劉清郎) said.
“We have a neutral view about next year’s business outlook because of political uncertainty, even though the economy is generally expected to improve modestly,” Liu told an investors’ conference in Taipei on Tuesday.
The company on Jan. 6 is scheduled to be listed on the Taipei Exchange, the over-the-counter bourse for companies with small and medium capitalization.
Chinese tourists account for 60 percent of the brand’s clientele at the branch near Alishan (阿里山) in Chiayi County, 30 percent at the Hualien subsidiary and a significant percentage in Taitung, company general manager Yang Shu-chang (楊書昌) said.
Created in 1998 as the Hoya Resort Hotel Group, the company was renamed Goya Hot Spring Hotel & Spa in 2008 and has capital of NT$444 million (US$13.4 million). It operates 1,325 rooms with average daily rates ranging from NT$2,000 in Hualien to NT$4,000 at Wuling Farm (武陵農場) in Taichung, Yang said.
The hotelier has emerged from an outbreak of norovirus infections in February at the Wuling location and is prepared for the upcoming cherry blossom season, Liu said.
“We hope the cherry blossom season will mitigate the potential business losses at locations dominated by Chinese tourists,” Liu said.
The impact of the elections has yet to become evident, but the company prefers to be cautious, Liu said.
For the first three quarters of this year, Goya posted net income of NT$214 million, or earnings per share of NT$4.82, company data showed.
The results represented an increase of 74 percent from the same period last year, thanks to one-off asset disposals that more than offset a 0.39 percent drop in revenue, the hotelier said.
Goya aims to establish a presence in more competitive locations in Taiwan by opening an integrated establishment that features 179 hotel rooms and 32 motel rooms in Kaohsiung in the third quarter of next year, Liu said.
The company plans to invest NT$900 million in the Kaohsiung location and expects to win back the sum in 11.77 years, chief financial officer Liu Shu-chu (劉淑珠) said.
An occupancy rate of 56 percent would allow the company to break even, compared with 62 percent for peers, Liu Shu-chu said.
The company is also in talks with potential partners at home and abroad to expand in northern Taiwan in areas such as near the high-speed rail station in Taoyuan and Southeast Asia, Liu Chin-lan said.
“Soaring property prices in northern Taiwan have significantly raised profitability hurdles and we have to carefully review before taking action,” Liu Chin-lan said.
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