Onyx's gaze wanders overseas

Onyx's gaze wanders overseas

Hopes to add 5-10% to profit, RevPar

Onyx Hospitality Group, a local hotel management company, is confident it can increase operating profit and revenue per available room (RevPar) by 5-10% this year, thanks to booming tourism.

"Our growing portfolio and cost efficiency have allowed us to invest more in existing properties and achieve solid margin progression," said president and CEO Peter Henley.

Tourism recovered last year and the momentum is continuing this year. This prompted the group to open its first overseas hotel, Amari Doha, earlier this year. It will introduce the first hotel under the OZO brand, OZO Wasley, in Hong Kong in the second half of the year.

Three more hotels will be opened in the third quarter including the Amari Ludhiana (India), Shama Heda Hangzhou (China) and OZO Colombo (Sir Lanka).

The focus on expansion abroad is to raise RevPar and profit in the future, said Mr Henley.

The group plans to operate 44 hotels in 2015, 51 hotels in 2016, 70 hotels in 2018 and 100 hotels by 2020.

Though Onyx is strong in the domestic market, overseas expansion is needed to manage risk, he said.

Mr Henley forecast overseas business will contribute 30-35% of the group's net profit in 2018, up from 5-10%, with the majority still domestic.

Onyx wants to expand in the Middle East, Sri Lanka, India, and China. Asia accounts for 50% of its total guests, followed by domestic making up 20%, Europeans 15%, and the rest from several areas.

The strengthening baht and a labour shortage are key challenges this year. Any fast-growing business must deal with staffing shortages, but Onyx is dealing with the problem by offering competitive payments and benefits. If travel demand remains strong, the strong baht should not deter tourists.

Last year, Onyx's total revenue jumped by 12% while its RevPar grew by 8%. This led to a 14% increase in operating profit.

Revenue generated from online channels grew by 30% in 2012. The focus in 2013 will be on social media and mobile advertising, as both are growth areas. Core websites that allow booking will remain a priority.

Onyx operates 35 properties with more than 5,000 rooms across five brands comprising Amari, Shama, OZO, the Oriental Residences and the Mosaic Collection.

The group aims to be one of Asia's leading hospitality providers through its marketing network by 2018.

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