Complete market coverage the key for Erawan
The Erawan Group Plc (ERW) operates more than 5,000 hotel rooms ranging from budget to luxury, and aims to become Thailand’s leading hotel developer and investor. President Kamonwan Wipulakorn discusses the company’s strategy and outlook.
Please explain Erawan’s business model.
Erawan operates in the hotel industry and focuses on quality assets and services. We view our activities from an investment standpoint and aim to be the leader in Thailand. As of the end of 2014 we had 5,289 rooms, the largest among listed companies in Thailand, and aim to reach 5,600 rooms by the end of 2015. Our properties range from budget to luxury in Thailand’s major cities and tourist destinations.
Erawan has a wide-ranging portfolio. How is each asset group performing?
Our portfolio covers various segments starting from luxury hotels such as Hyatt, Marriott, Renaissance and Luxury Collection; to midscale with Courtyard by Marriott, Holiday Inn and Mercure; economy with Ibis, and finally budget with our own Hop Inn brand. This year we expect growth in each segment ranging from 20% to 500%, as a result of the recovery in the tourism market and the additional room inventory.
Kamonwan: Politics, competition top risks
We will continue to expand the midscale, economy and budget segments as we see continued demand growth with limited supply growth. In addition, developing a luxury hotel today is more challenging because of the limited of quality locations. Overall our occupancy rates for Bangkok hotels are 85% and our upcountry hotels are also performing well.
Hop Inn is Erawan’s first branded hotel business. Why did you develop it and what are the plans for it?
We analysed the market for domestic corporate and SME travellers and found that the budget segment lacked a leading hotel network with brand recognition. Thus we are developing a Hop Inn brand that offers high value for its price point and consistent service quality throughout all locations in the country. This year we are opening five hotels and next year we plan 10 more.
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