UHG keen on mid-tier hotels
Commercial property developer UHG is continuing to tap the mid-range market with plans to open two new hotels over the next 12 months in Bangkok, one by the Chao Phraya River in Klong San and another in Ratchathewi.
Managing director Wutthiphon Taworntawat said mid-priced hotels located near a mass transit station with features that meet guests' needs and room rates of 2,500-3,500 baht per night recorded a strong occupancy rate, even during the pandemic.
"Thai guests replaced foreigners at our hotels during the pandemic as prices were affordable for them," he said. "Room rates of around 3,000 baht a night easily attract Thai travellers and young foreign tourists from Asia and Europe."
Many of UHG's 13 Bangkok-based hotels, with the majority operating under The Quarter brand, recorded an occupancy rate of 90% since 2020 despite the impact of the pandemic because room rates were cut to attract locals, offsetting the dearth of foreign tourists.
Since the country's full reopening this year on July 1, the average daily rate (ADR) of most of UHG's hotels increased by 20% from the period prior to the reopening, as the number of foreign visitors has increased.
Properties located in the Siam, Silom, Ari and Lat Phrao Soi 4 areas of Bangkok were among UHG's leading performers, with each targeting a demographic segment.
The majority of guests staying at Evergreen Place Siam and The Quarter Silom, for example, are foreign visitors, particularly from Malaysia, Singapore, Hong Kong, India and the Middle East. The Quarter Silom also attracts regular customers who are members of the LGBT+ community, said Mr Wutthiphon.
"Only Evergreen Place Siam still has an ADR of 15-20% less than before the pandemic, although it has recovered from a 50% cheaper rate earlier. This is because most of its customers were Chinese," he said.
About 30% of guests at The Quarter Ari are local business travellers as there are several headquarters and government agencies located in the area, while hotel supply nearby is limited, said Mr Wutthiphon.
The Quarter Ladprao attracts visitors from the provinces who want to shop at Chatuchak Weekend Market and those transiting via Don Mueang airport.
"Other hotels located near a mass transit station are in the upper-end segment with higher room rates. They do not allow food delivery services, while some have TVs but don't provide streaming services," he said. "Food delivery to hotels and streaming services are what the new generation of travellers look for."
UHG already opened two new hotels this year. The Quarter Ruamrudee, with 150 rooms, was launched in the second quarter, while The Quarter On Nut featuring 88 rooms opened in the third quarter.
Average occupancy tallied 80% with an ADR of 1,500 and 1,200 baht, respectively. The target ADR for each property was set at 2,200 and 1,800 baht, respectively.
"There are many five-star hotels on Wireless Road, but our hotel on Soi Ruamrudee has high occupancy because it targets the mid-priced segment," said Mr Wutthiphon. "The majority of guests are Thais who want to apply for a US visa."
The Quarter On Nut attracts budget foreign travellers who want to stay near a BTS station and enjoy the nightlife of Thong Lor, people wanting transit to Suvarnabhumi airport, and locals who have a meeting in the area.
UHG plans to open The Quarter Chaophraya on Dec 15. The property has 250 rooms in the Klong San area by the river with an average room rate of 3,500 baht per night and projected occupancy of 90%. Slated for the fourth quarter of 2023, The Quarter Ratchathewi has 100 rooms and an average room rate of 2,000 baht a night.