Oakwood's extended-stay model provides needed stability
Oakwood's extended-stay business model has helped it withstand the lack of international arrivals as it remains on pace to have 12 properties in its Thailand portfolio by 2023.
"Our core business focuses on extended-stay guests and this has allowed us to survive the pandemic," said Lina Abdullah, regional general manager for Cambodia, Myanmar and Thailand at Oakwood, a fully-owned subsidiary of Mapletree Investments.
This model applies to Oakwood Hotel and Residence Si Racha, which is its most resilient property with 230 long-term expat guests, contributing 25% of its occupancy.
She said the hotel in Si Racha has maintained a 55-57% occupancy rate during the current wave.
Its hotels in Bangkok recorded an average occupancy of 60-65%, better than short-stay properties in Pattaya, which had single-digit occupancy rates.
Ms Abdullah said hotels have to rely on the domestic market for the rest of this year as international tourists may not arrive until the fourth quarter, or in the worst-case scenario the second quarter of next year.
New clusters continue to emerge and disrupt the pace of the domestic tourism recovery, posing a critical threat to hotels and reinforcing the urgency of faster vaccination administration, she said.
Oakwood manages seven properties in Thailand including its latest, the 142-unit Oakwood Hotel and Residence Bangkok owned by V.M.P.C. Co, a property developer.
Ms Abdullah said the company plans to open new hotels on Sukhumvit sois 11 and 36 in the fourth quarter, and wants to have 12 hotels by 2023.
The firm also plans to open one hotel in Phnom Penh, Cambodia, but postponed the opening date until next January because of the new wave of infections.
Three projects in Myanmar are on hold due to political unrest.
Prinya Tieanworn, chief executive of V.M.P.C. Co, said Oakwood Hotel and Residence Bangkok, which is worth 1 billion baht, is a renovation from Astera Sathorn Hotel.
The hotel aims to have an average occupancy of 30% this year.
The break-even period should not exceed 10 years because of its strategic location near famous landmarks and every mode of transport, he said.
Mr Prinya said if the country can reopen with fewer quarantine requirements, demand should return from business travellers such as technicians at factories who visit the country twice a month for maintenance of on-site operations.
As a result, frequent travellers are expected to become regular guests at Oakwood properties in Bangkok and Si Racha.