Commercial property developer UHG Holdings Co sees Ramkhamhaeng as its next location to develop a mix of hotels and offices, diversifying risk in the popular hospitality segment.
Managing director Wutthiphon Taworntawat said Ramkhamhaeng is densely populated and is appealing given the future Orange Line and planned renovation of The Mall shopping complex.
"Revenue from office rental is more sustainable and can help the company's business run smoothly when the hotel business stumbles due to external factors such as politics," he said.
UHG is looking for a plot to rent and plans to develop a mixed-use project with 15,000 square metres of office space, as well as a 3.5-star hotel with 300 rooms and an average daily rate not exceeding 2,000 baht.
The company is spending 2.5 billion baht to develop a mixed-use project, Ratchayothin Hills, on a 3.5-rai leasehold plot near Ratchayothin Intersection.
The project, which is scheduled to launch in 2022, will include a total of 19,000 sq m of office space with a monthly rate of 850 baht per sq m, 1,500 sq m of retail shops and 228 hotel rooms.
The company has three office towers with a total lettable area of 30,000 sq m, comprising Ari Hills with 14,000 sq m, Ladprao Hills with 6,000 sq m and Evergreen Place Siam with 10,000 sq m.
"Competition in the hotel business is very high because Bangkok has a large hotel supply and there are last-minute deals offering the cheapest prices, so the new platform helps people get information easier," Mr Wutthiphon said.
Apart from sticking to tourists, UHG's sales team must focus on travel agents, industrial estates and government agencies.
The general manager also needs to forecast the market twice a day to adjust room rates appropriately and align with actual bookings.
Mr Wutthiphon said daily accommodation rentals on other platforms, such as Airbnb, are not competitors: the average daily rates of those properties in good locations come close to those of hotels, while many tourists still prefer full facilities and 24-hour service, especially mid-tier individual travellers.
In Bangkok, this segment has a budget of 2,000-2,500 baht per night. The biggest market is Chinese (25%), followed by Thais (15%) and Taiwanese, Singaporeans, Koreans and Japanese (10% each).
This year UHG is planning four new hotels with a total of 500 rooms in the centre of Bangkok, including Sukhumvit Soi 31, Soi Ruam Rudi and Silom Soi 6.
UHG expects to generate 600 million baht in profit by year-end, up from 400 million baht last year and 300 million baht in 2018.
One-third of the 2020 profit will come from office rental, down from 40% last year as the hotel portfolio increases.
As of the end of 2019, UHG had six hotels offering 800 rooms and an average occupancy of 92-95%.
Some 70% of guests booked via online travel agents, 20% were corporate customers and 10% were walk-in guests.