UHG, a local hotel chain formally known as Urban Hospitality Group, plans to invest in five new hotels in Bangkok worth 3 billion baht over the next three years to capitalise on the young tourist market.
Wutthiphon Taworntawat, managing director of UHG, said mid-scale hotels in the Thai market will continue to grow thanks to unique design and competitive rates attracting millennial travellers from around the world.
Other factors set to reinforce the mid-scale segment are lower construction costs and lighter extra service offerings, removing those deemed unnecessary by the new generation of travellers who do not look for five-star accommodations.
"The investment cost for five mid-scale projects will be around 3 billion baht. All five hotels will be in Bangkok as land banks have already been secured," said Mr Wutthiphon.
Of the new investments, the group will introduce two hotels to the market in 2019 -- The Quarter Ploenchit located on Soi Ruamrudee and The Quarter Phromphong on Sukhumvit Soi 31.
Two more hotels -- The Quarter Silom and The Quarter Ruamrudee (or Pret Hotel) -- will be opened the following year.
The fifth project could be UHG's largest hotel. The Chaophraya Bangkok, located in Klong San district by the Chao Phraya River, will come in 2021 when the Gold Line monorail opens to the public. The city's 459-metre observation deck, the Unity Tower, is under construction.
Mr Wutthiphon said the Thai hotel industry has been hobbled since July after a boat accident off the coast of Phuket resulted in the death of 47 Chinese tourists.
Coupled with the economic slowdown, the number of Chinese visitors, Thailand's largest arrivals base, has suffered a double-digit drop since July.
Arrivals improved after the government launched a programme that exempts visa-on-arrival fees for Chinese tourists and those from 20 other countries starting Nov 15, 2018, running until Jan 13, 2019.
"If the Chinese economy remains sluggish and there are no real aggressive travel incentives from the government, we could see a lot of adjustments by Thai hotels to compete for customers next year," he said.
Bangkok remains a top city in the world for international visitors, both for vacation and business travel, according to Mastercard Global Destination Cities Index released earlier this year.
Bangkok's great value for money, diversity, and friendly people should continue to be major competitive advantages.
This year, UHG opened two hotels -- The Quarter Ari, on Phahon Yothin Road, and The Quarter Ladprao, on Lat Phrao Road. Both hotels are part of large mixed-use compounds -- Ari Hills and Ladprao Hills.
"Our two multi-purpose complexes consist of hotels, office space, retail space, and our new fitness centre line, Urban FIT. The office spaces are already 100% occupied, while the hotel has quickly become well-known among agencies, corporations, governments, and tourists, both local and international, because of the scarcity of new hotels in the area," he said.
UHG owns and operates six hotels with a total 800 keys and three offices covering 32,000 square metres, all in Bangkok's business districts.