Luxury hotels planned for Pattaya and Bangkok
Local big business faith in the long-term future viability of Thailand’s tourism sector has prompted the L&H Hotel Management Company, the hospitality subsidiary of the SET-listed property company Land & Houses Plc, to announce plans to build two luxury hotels in Pattaya and Bangkok by 2018.
The company said it had earmarked four billion baht to the two projects (two billion baht each), a vote of confidence it said was based on the fact that foreign tourist numbers reached almost 30 million people in 2015, despite the overall poor global economic conditions.
The two properties will be run under the L&H Hotel Management brand known as Grande Centre Point.
The luxury hotel slated for Pattaya will be built in North Pattaya, and be open by 2018, while the Bangkok hotel will be in Soi Thong Lor and is scheduled to be completed and opened by the end of this year.
At the present time, the company operates three similar hotels in Bangkok and management have stated they are keen to add to this portfolio, especially in the downtown and commercial areas of the capital. Its current trio of hotels are located at Terminal 21 in Asoke, Ratchadamri, and Ploenchit.
In order to keep costs to a minimum, the company prefers to lease plots rather than buy. The Grande Centre Point hotels have a standard template of between 350 and 400 rooms with a room rate averaging 4,200 baht per night. The target market is, clearly, so-called quality tourists and the company looks to a break-even period of around 10 to 12 years.
The new Soi Thong Lor luxury hotel (in Sukhumvit 55) will comprise 442 rooms and is expected to drive revenue growth by 10 percent in 2017. The hotel will be expected to have 75 percent average occupancy in 2017 and then rise to around 80 percent thereafter, in line with the other three properties.
L&H Hotel Management has forecast a surge in occupancy and revenue for Bangkok hotels during this year, especially with the expected growth in tourist numbers from China, Japan, South Korea and India.
A company director was quoted as saying the increase in tourist numbers from north Asia and India will help offset the decline in Eurozone tourists, a decline that is expected to continue through 2016.
The company realizes it faces stiff competition in the luxury hotel marketplace but believes its competitive advantage comes from the good location of its hotels, quality service and generally bigger rooms. While its pricing is above that of other local chains, it is below international standards, and this should keep its hotels competitive.