As they plan to be the global hotel brand, Centel needs its chain to cover more significant gateway destinations in numerous regions. The weak euro also makes this an ideal time for Centel to expand its hotel business to Europe.
“Negotiations are in progress for both a management contract and hotel investment,” said Suparat Uahwatanasakul, the vice-president for business development of Centara International Management.
Centara wants to introduce its brand in Europe, starting with four- or five-star labels. “If we can seal a good deal, then we’ll be ready to invest and manage the hotels ourselves. The entry into Europe will help to diversify risks if Asian and Asean markets are saturated,” said Mr Suparat.
He said potential European locations are London and Paris. “Thainess and Thai hospitality are well known and welcomed by Europeans,” Mr Suparat noted.
“Global brands have an advantage over Thai brands, as they’ve built their businesses over a long period of time with strong sales networks. But Centel has sales offices and networks covering all major markets worldwide, reducing the gap between Centel and other global brands.”
Currently, Asia still has large room for growth in the hotel industry, as economic trends are bright in the region.
Full market liberalisation in the Asean Economic Community from 2015 will also benefit hotel businesses, and Centel plans to use the AEC as a springboard to becoming the regional leader in hotel management in terms of number of rooms.
In 2014, their hotels will increase to 55 from 31 now, for a total of 10,691 rooms. “In Asia, we’ve covered all the important gateway cities except Singapore and Hong Kong. Apart from Asean, we’ve also kept an eye on China and India,” said Mr Suparat.
Interestingly, in China most demand comes from budget and mid-tier travelers. The luxury five-star hotels that exist are emblems of the city’s prosperity, built by subsidised development that are profit losing.
As with China, Indian demand for budget accommodation has increased. “Therefore, Centel believes the mid-tier and budget hotels segment has high potential in Southeast Asia, India, China and other Asian countries,” said Mr Suparat.
Apart from the existing three-star Centara Hotels, another budget brand will be introduced in the third quarter, with a prototype hotel under construction in central Bangkok.
Demand is growing for low- and middle-class hotels as low-cost airlines expand. Budget hotels also are also more flexible to competition, offer quicker return on investment and cost less to build.
Centara’s many brands include Centara Family, Centara Grand Hotels & Resorts, Centara Residence & Suites, Centara Boutique Collection and Centara Hotels & Resorts.
Written by : Kanchana Ganglani