Italthai's hotel hopes

Italthai's hotel hopes

Hospitality to see bulk of massive investment

"Out long-term roadmap is to have 99 hsopitality properties, comprising 18,500 rooms in 10 countries, by 2024." — Yuthachai Charanachitta, Chief executive, Italthai

Italthai Group is focused on expansion and investment, preparing a multi-billion-baht budget to double revenue to 30 billion baht by 2021.

The group is one of Thailand's oldest construction and hospitality companies and runs four core business units: construction equipment; engineering services and construction contracting; hospitality; and lifestyle.

Yuthachai Charanachitta, Italthai's chief executive, said 5 billion baht will be allocated during 2019-20 for the hospitality business to add 10 new hotels, serviced apartments and spas. The company manages 50 properties in eight countries.

"We are very keen on both the domestic and foreign markets for hospitality," he said.

This business unit is run by Onyx Hospitality Group and includes Amari, Ozo, Shama, Breeze, The Mosaic Collection and Oriental Residence.

"Our long-term roadmap is to have 99 hospitality properties, comprising 18,500 rooms in 10 countries, by 2024," Mr Yuthachai said.

Last August, Onyx signed management deals for 30 hotels under development in Thailand and overseas. They have been set to open by 2021, reaching 79 properties.

The 5 billion baht is part of this plan, covering construction of new properties and renovation of existing ones.

During 2019-20, Onyx expects to open three more locations in Chon Buri province and Laos.

Two properties are in Chon Buri's Pattaya: Amari Pattaya Ocean Tower with 350 rooms and Ozo Pattaya with 400 rooms, expected to open in mid-2019.

These hotels aim to support tourism flows in Chon Buri and the flagship Eastern Economic Corridor (EEC) scheme, Mr Yuthachai said.

The new Amari chain launched in Vientiane with 200 rooms.

Amari and Ozo will see further development, Mr Yuthachai said.

"Amari is positioned as a four-star hotel, while Ozo is three stars," he said. "But the first Ozo in Hong Kong is recorded as four stars."

Mr Yuthachai said the development of the Ozo chain can have a payback period of 5-6 years faster than Amari, so Onyx plans to develop many Ozo locations in China, Malaysia and the Maldives.

"The development cost for Ozo is 2-3 million baht per room, while Amari uses 5-6 million baht, so we plan to expand new Ozo hotels in major cities across Thailand," he said.

Furthermore, Italthai is a shareholder in the Mandarin Oriental Bangkok, one of the most prestigious and oldest hotel properties globally.

Mr Yuthachai said Italthai has been renovating the 143-year-old five-star hotel for seven months under a 2.5-billion-baht budget.

"The number of rooms is expected to decline from 370 to 330 after completing the plan because we aim to compete against others with the suite room type amid aggressive competition in hotels along the Chao Phraya River," he said.

Italthai is also investing 200 million baht in a large laundry facility in Bang Phli, Samut Prakan. The structure will support Onyx's properties in Bangkok and Chon Buri, and Onyx will run logistics routes to transport all laundry to this factory.

"This is our trial project for the hospitality business locally. If it works, we will expand to our properties in Phuket," Mr Yuthachai said. "For Phuket, we have to adopt a desalination system at the laundry facility because that province has limited fresh water."

He said one laundry facility can support 5-6 properties in surrounding provinces.

With new opportunities in the EEC, Onyx will enter Rayong to take advantage of new flights and rail routes directly into the three EEC provinces.

U-tapao airport is becoming one of the flagship terminals, while the high-speed railway linking the three main airports of U-tapao, Don Mueang and Suvarnabhumi is completing the bidding process and starting development.

"Running serviced apartments will respond to the demand of long-term residence from locals and expats, and most of them will work in the aviation city and a maintenance, repair and overhaul facility there," Mr Yuthachai said. "Onyx has Shama service apartments to handle the new location in Rayong."

Onyx acquired the Shama brand from Sincere Holdings Group, a Chinese property developer. Shama has properties in major Chinese and Thai cities.

Italthai will position its lifestyle business to support food and beverage products for all hospitality properties, Mr Yuthachai said.

In 2019, Italthai expects revenue to grow by 12% to 15.03 billion baht.

Two units, construction equipment and engineering services, contribute roughly 63% (9.4 billion baht) of the total, while the hospitality and lifestyle units account for 37% (5.63 billion baht).

Mr Yuthachai said the hospitality business generates 60% of its revenue in Thailand, with the remainder stemming from overseas properties.

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