Muang Thai Life Assurance is preparing to expand in the resort and hotel business after acquiring an 87% share of the residential developer Phatra Real Estate.

Muang Thai Life currently has two resorts and is building a third, all managed by Phatra Real Estate.

With registered capital of 4.83 billion baht, Phatra focuses on management for office buildings and housing estates and is developing the Belle Villa resorts in Chiang Mai and Mae Hong Son.

Muang Thai Life uses the resorts for its own purposes and to serve tourists, says president Sara Lamsam. ''In line with our policy, the resort business is a company facility while it also generates income for the group,'' he said.

During the low season, the resorts are used for the ''Muang Thai Smile Privilege'' programme, which stages monthly lifestyle activities for customers, brokers and staff. In the high season, the properties cater to general tourists to earn additional revenue.

Muang Thai is not the only life insurer with real estate interests. Thai Life Insurance also operates hotels and apartdhments in resort destinations through subsidiaries Rim Pae Development Co and Hotels and Resorts Co. It owns the Novotel Rim Pae Rayong hotel, C-One Mansion in Bangkok, the Novasamui Resort Koh Samui and other properties.

This year, Phatra Real Estate will launch a new single-house and resort development worth 200 million baht on a 20-rai site at Khao Yai. The 32 single houses, on lots of 110 to 126 square wah, will cost around seven million baht.

The Belle Villa Resort Khao Yai will have 44 rooms at 2,500 baht a night and one meeting room that can accommodate up to 140 guests.

''We see opportunity to grow in Khao Yai. It is now popular because it is convenient to travel from Bangkok and there are shopping centres on the way as well,'' said Luxaman Bunnag, the president of Phatra Real Estate.

Construction of the houses at the site, half of which have been sold, will be finished this month. The resort will be completed late this year.

Mr Luxaman expects that the Khao Yai resort will break even within eight years, with occupancy averaging 35% in the first year. At the two northern resorts, he hopes that increased activities by Muang Thai Life will double the occupancy rate to 60%.

After debt restructuring and clearing huge liabilities from the 1997 economic crisis, Mr Luxaman said Phatra Real Estate was now was focused on a business model patterned on His Majesty the King's sufficiency economy philosophy.

The aim, he said, was not so much to generate profit and revenue but to create a sustainable business that satisfied customers. ''The heart of property development is to wait for the right time, not to depend too much on borrowing and be confident of sufficient demand.''.

From now on, he added, Phatra would focus on the resort business in line with the policy of its majority shareholder.

''I have had enough with housing estate development because I had to put a lot of effort into starting all over whenever I planned new projects,'' he said, adding that finding land and forecasting market response were very difficult.

The resort business takes longer to break even but generates income more steadily for the long run, he said.

In 2007, Phatra Real Estate had revenue of 100 million baht and had a profit around 20 million, said Mr Luxaman.