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Centara Hotels To Launch New Budget Brand

By on Dec 11, 2012 in Hotel-Tourism

Centara Hotels & Resorts, the country’s leading locally based hotel and resort chain, will launch a new economy brand to cash in on fast-growing demand by travellers, especially after the opening of the Asean Economy Community in 2015.

COSI Hotels will be the first Thai economy hotel brand to compete with international chains such as Tune and Ibis, which are expanding their networks.

Thirayuth Chirathivat, Centara chief executive officer, said it was not too late to capture this segment because it still had room for growth. This is due largely to low-cost airlines, which have been driving regional travel demand. About 51 per cent of air travel by Asean residents is with these carriers for intra-regional tourism.

The first COSI Hotel will be opened in early 2015 in Bangkok. By 2020, the firm plans to have at least 30 in major cities at home and regionally, including in Asean, China, Australia and New Zealand. Only five will be wholly invested in by the company, while the rest are operated under management contracts. In general, investment per room for a COSI Hotel is Bt1.5 million.

A roadshow held by Centara drew a good response from potential customers, both foreign and domestic, the company says.

COSI Hotels will differentiate themselves from rivals. Room rates will be between Bt1,000 and Bt1,250. There will not be any extra charges. Occupancy rate is expected to be 75 per cent. By 2020, the company expects to earn Bt2.2 billion in sales and income from management fees of Bt180 million.

SIXTH BRAND

COSI will be the sixth brand in the Centara portfolio and its launch will result in the group covering all hotel segments. COSI will play a rising role in Centara’s network expansion in the future because of its low investment cost and expected stable occupancy rate. Even amid economic uncertainty, budget hotels will still be in demand.

At the same time, the launch of this brand will help minimise the company’s risk. The firm wants to avoid relying too heavily on its five- and four-star hotels, comprising Centara Grand, Centara and Centara Boutique and Collection. The group also has Centra, a three-star hotel and resort brand, as well as the high-end Centara Residence & Suites.

Next year, the group expects its sales revenue will grow by 21-22 per cent to more than Bt17 billion, up from Bt14 billion this year. Of the total, Bt7.7 billion will come from hotel business and Bt9.6 billion from food business.

This year, the group’s occupancy rate is expected to come in at 70 per cent, up from 64 per cent last year. Next year, the figure is expected to reach 72 per cent.

Source: The Nation, 7 December 2012

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