SHR Shares Gain 4% as Hotel Closures In Line with Maintenance Plan for Reopening in 3Q23

S Hotels and Resorts saw its stock price recover on Thursday after the company clarified that the temporary closure of its hotel in Mauritius was unrelated to the virus outbreak, calming investor concerns about the impact of the shutdown.

As of 11.31 A.M. Bangkok time, the share price of S Hotels and Resorts Pcl. (SET: SHR) rose THB0.14/share, or 3.93%, to THB3.70/share, with a trading value of THB78 million. 

On Wednesday, SHR shares plunged by 10% after a report broke that the company’s hotel in Mauritius was shut down due to Marburg Virus outbreaks. 

However, SHR said on Thursday that the temporary closure of Outrigger Mauritius Beach Resort from on April 15, 2023 was due to the development of a sustainable solution for servicing the main water management system and had nothing related with Legionella and the Marburg virus, or any health campaign undertaken by the Mauritian government.

In early April, Outrigger informed the Mauritian health authorities of the decision to temporarily suspend operations as it was necessary to renovate the water management systems at Outrigger Mauritius Beach Resort. This temporary closure coincides with the start of the shoulder season for European tourists, and the Resort is expected to reopen in the third quarter of 2023.

The company stated that it is evaluating the operation suspending period and any possible impact. In 2022, the operating profit from Outrigger Mauritius Resort hotel accounted for 2.5% of the total operating profit of the company.

SHR came up with the solution to mitigate the impact by controlling costs and effective management of manpower during the temporary suspension period.

In addition, the overview of tourism demand in other regions such as Thailand, Republic of Maldives, United Kingdom, and Republic of Fiji remain strong with the continuous growth of the average room rate (ADR).