Centre Point Hospitality, the 22-year-old subsidiary of SET-listed developer Quality Houses Plc, aims to double hotel rooms in its portfolio to 4,430 by 2018 by managing properties for others.
Mallika: Shifting from serviced apartments
It would then be among the top 10 hotel and serviced apartment companies in Thailand.
Centre Point now runs seven serviced apartment complexes with 2,215 rooms in Bangkok. Two months ago it announced a repositioning to expand into the hotel business on the back of booming tourism.
The average daily room rate (ADR) for hotels is 30% higher than for serviced apartments. After repositioning, Centre Point is confident it can raise ADR by 10% and even by 15% at some properties this year, said Mallika Thasananipan, senior vice-president of Centre Point.
"High competition in Bangkok's serviced apartment business has made us adapt to become a hotel operator. We're looking for hotel opportunities in the provinces," she said.
The company sees potential near industrial estates in Chon Buri and Rayong. After the 2011 tsunami in Japan, many companies have looked for new locations for plants.
Thailand is a prime destination for these companies. Furthermore, the full liberalisation of the Asean single market in 2016 will stir business activity, and Centre Point strongly believes it will gain.
"We will compete with local hotel management chains first and then international chains," said Ms Mallika.
"To compete with them we need to build our network, especially in the provinces, and open the door for hotel management to increase room numbers and expand the marketing network."
In Bangkok, total hotel rooms will increase to 42,000 in 2015, up from 35,000 last year.
The competitive environment has prompted Centre Point to differentiate itself. It is trying to build up its brand by increasing marketing spending from 3% of total revenue to 5% this year.
Lower rents for condos along skytrain lines have made serviced apartments less attractive. Therefore, Centre Point expects other big players to reposition themselves to engage in both hotels and serviced apartments soon.
To introduce itself in the tourism cycle, Centre Point has joined roadshows and trade fairs with the Tourism Authority of Thailand such as ITB Berlin and the Arabian Travel Market show.
About the author
- Writer: Chadamas Chinmaneevong