Onyx keeps long-term plans in sight amid chaos

Onyx keeps long-term plans in sight amid chaos

Expanding hotel properties in Asia is the hospitality unit's goal, writes Dusida Worrachaddejchai

Douglas Martell, President and CEO of ONYX Hospitality Group. (Photo by Somchai Poomlard)
Douglas Martell, President and CEO of ONYX Hospitality Group. (Photo by Somchai Poomlard)

Onyx Hospitality Group, a unit of Italthai Group, is embracing the difficulties of the ongoing crisis by focusing on a long-term strategy to expand its hotel footprint in Thailand and Asia.

The Thai hospitality company plans to add 11 new hotels this year, with at least three properties in Thailand, even though the tourism outlook for the first half is gloomy.

"Crises come and go. We have to stay focused on the long-term plan and manage short-term challenges," said Douglas Martell, Onyx Hospitality Group's president and chief executive.

He said the group has learned lessons from managing four hotels in Sri Lanka and eight hotels in Hong Kong.

Both countries have been hit hard by political unrest. Hong Kong is coming up on almost a year of mass protests. Sri Lanka has faced a series of bomb blasts and horrific death tolls in recent years, the worst violence since the civil war ended a decade ago.

During the crises, the average occupancy rates in both areas dropped to 50%.

"These awful incidents only created a short-term impact. This year we have one more flagship brand to add to our portfolio there -- Amari Colombo. Investors believe the return on investment for the hotel could be 10 years or more," said Mr Martell.

He said Onyx has seen solid growth after crises in this market, thanks to the uniqueness and beauty of Sri Lanka, which has seen investment confidence recover quickly.

Six of the eight hotels in Hong Kong are focused on long-stay guests, a segment that is less affected by turmoil compared with daily hotels.

Mr Martell said once the outbreak settles down, he hopes the vast majority of 31 properties in Thailand under Onyx will see activity return to healthy levels.

The group has invested 1.2 billion baht in the refurbishment of the Amari Watergate, and 2 billion for the renovation of Amari Pattaya and new OZO in North Pattaya slated for this year.

He said the refurbishment of the Amari Watergate is essential because as a hotel management company, it has to showcase the brand standard to potential investors.

The coronavirus outbreak afforded us a rare opportunity for refurbishing, which comes by rarely for busy hotels, said Mr Martell.

"We have to be careful not to overreact, especially when considering human resources, as we have 2,930 employees in Thailand. We will opt to relocate rather than lay off good staff," he said.

The group has 52 properties in seven countries: Thailand, Laos, Malaysia, Sri Lanka, the Maldives, Bangladesh and China. Another 25 hotels are already in the pipeline.

Since the outbreak in January, Onyx's hotels in Thailand recorded 4% growth of revenue per available room year-on-year, as well average occupancy growth of 2%.

"We expect growth in Thailand will be flat this year because of the slowdown in advance bookings, which can be seen everywhere, but tourism will rebound in the second half of this year," said Mr Martell.

A series of crises ranging from pandemics, demonstrations and terrorism over the past decade has made hoteliers resilient.

He said Onyx will stick to a balanced mix among markets, such as maintaining the proportion of Chinese and European guests at 10% each to avoid risks when any markets weaken.

Mr Martell believes the company will have 99 properties by 2024, as targeted.

Onyx will stick to three home-grown brands: Amari, OZO and Shama.

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