Low debt, mixed-use properties and speedy adjustments have helped commercial developer UHG survive the crisis, allowing it to acquire a serviced apartment on Soi Sala Daeng.
Managing director Wutthiphon Taworntawat said three months ago UHG signed a contract to lease Siri Sathorn Residence, an upper-end serviced apartment on Sala Daeng Soi 1, for 18 years from a former owner after the pandemic affected the hospitality business.
Wutthiphon: Taking an agile approach
"Some hotel owners whose core business is not hotels wanted to exit or seek a new investor after they faced difficulties surviving a crisis unlike any before, preferring to focus on core ventures," he said.
Spending 40-50 million baht, UHG renovated the 104-room serviced apartment, resized the largest units from 90 square metres to 45 sq m, and operated the building as a hotel with 167 rooms.
Renamed Siri Sathorn Bangkok by UHG, the hotel reopened in August with an average room rate of 900 baht per night for the new size, shifting its target to Thais.
"The shift can boost the hotel's occupancy to 85% from only 7% in the second quarter prior to acquisition," said Mr Wutthiphon.
"The foreign tourism market is likely to recover from the end of next year, depending on vaccine availability and the government measures."
Since the pandemic hit the global tourism industry, UHG's hotel business tried to survive through aggressive online marketing and seeking new markets to replace foreign guests.
Five adjustments were carried out, starting with the first step in March this year during the height of the panic.
With foreign guests non-existent, its six inner-city hotels marketed to firms where staff were needed to work from home to reduce exposure to the virus while travelling.
These customers rented 20 rooms per company to allow staff to work near offices. Popular locations were Ari, Lat Phrao and Thong Lor.
Despite a drop in room rates to 600 baht from 1,300-1,400 baht per night, the average occupancy rate at those three locations was 70%.
If UHG did not shift target segments, the occupancy rate might be as low as 30%, he said.
The second move happened in April when they targeted daytime guests or those checking in at 9am and checking out at 6pm to use rooms as a workplace.
"We used photos of work stations in our hotel rooms to promote them as a work-from-hotel venue via social networks and it worked," said Mr Wutthiphon.
Then in May and June it focused on people wanting to travel but unable to do so.
With an average room rate of 750-790 baht on weekdays and 890 baht on weekends, hotel occupancy rose to 80%.
The fourth adjustment was to stimulate meeting or party groups, while the fifth was marketing to Thais from the provinces travelling to Bangkok to use benefits from the domestic stimulus subsidy.
"None of our hotels closed for a single day because of our efforts to survive," he said.
With the agile strategies, UHG's performance this year should improve from a 40% decrease from its pre-pandemic target to only a 20% drop.
Gross margin should drop to 300 million baht, the first decrease in a decade for its hotel business, from 400 million last year, said Mr Wutthiphon.