Centara eyes major cities, new markets

Centara eyes major cities, new markets

The 555-room Centara Grand Mirage Beach Resort Pattaya. (Bangkok Post file photo)
The 555-room Centara Grand Mirage Beach Resort Pattaya. (Bangkok Post file photo)

Centara Hotels and Resorts aims to become an international hotel chain and make its presence felt in gateway cities and emerging markets after enjoying success as a regional hotel chain.

To achieve its goal, Suparat Chirathivat, Centara's vice-president for development, said the Thai hotel chain will buy properties in locations that can boost its reputation.

"Owning the right properties in the right locations will make our brand more international and attractive to developers and tourists," he said.

Investing in gateway cities may generate low returns, but it will create higher value in the long term.

The company is also looking for opportunities in emerging markets which will generate a higher yield. The small hotel supply is driving many emerging markets such as the Maldives, Africa and some cities in Europe, with expensive room rates.

These markets are interesting for investment and Centara is waiting for the right deals and right locations, Mr Suparat said.

For example, the average room rate in Africa is US$300-500 per night, but labour and construction costs are still cheap.

"Therefore, the African hotel market is very attractive," he added.

Suparat: Long-term value in gateways

Centara favours conservative growth, but each step must be certain to generate a good yield.

It has created and implemented a five-year "Asset Right" plan during 2014-18 with the aim of driving both revenue and the bottom line.

Under the new strategy, acquisitions and joint ventures will be the main channels to expand its portfolio significantly in the near future. The strong sales network will drive healthy growth and Centara plans to open two sales offices a year until 2018. It now has 32 offices worldwide.  

The Centara brand is well-known after the board of Central Plaza Hotel approved the name change for its hotel division to Centara Hotels and Resorts in March 2007.

Currently, Centara has six brands: Centara Grand Hotels & Resorts, Centara Hotels & Resorts, Centara Boutique Collection, Centara Residence & Suites, Centra Hotels & Resorts, and Cosi Hotels. The company plans to introduce two or three new hotel brands next year.   

After more than seven years of brand building, the company owns 15 hotels and resorts, with 13 in Thailand and two in the Maldives. It also manages 60 hotels and resorts in Thailand, China, Laos, Vietnam, Indonesia, Sri Lanka, the Maldives, Mauritius, Ethiopia, Qatar and Oman. The 75 properties have a combined 15,055 rooms.

The hotel chain will invest 1.2 billion baht to open six hotels on its own under the Cosi brand in Thailand over the next five years. The first two Cosi hotels will be in Chiang Mai and Koh Samui. It also expects to secure management contracts for 25 hotels under the Cosi brand.

Mr Suparat said Cosi was set to become another important brand to boost Centara's revenue growth. The brand is for the affordable and lifestyle hotel segment, an upgrade from the budget hotel brand previously.

Designs and facilities of the Cosi brand are suited to the demands and lifestyles of savvy travellers and youths. It is also set to be a key brand to expand in Asean.

"We have to change and upgrade Cosi because we don't want to play with prices to compete with local guest houses, which can dump their room rates to as low as 100 or 200 baht per night," Mr Suparat said.

Normally, budget hotels sell in the range of 400-1,000 baht per night.

Modern designs and facilities such as mini gyms, swimming pools and restaurants will make Cosi different from other brands in the same budget hotel segment.

Do you like the content of this article?
COMMENT