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Small is Beautiful for S Group’s New Hotels

By on Apr 28, 2016 in Hotel-Tourism, Property News

S Box makes most of rare Sukhumvit land

A slowdown in new hotel supply and costly land prices in Bangkok’s Sukhumvit area have inspired hotelier S Group to create a new concept called S Box to deal with the situation.

Small is beautiful for S Group's new hotelsS Box is in the middle ground between budget hotels and hostels, said managing director Sarun Limsawaddiwong.

The concept requires less land but produces higher margins relative to three- and four-star hotels. S Box is a modern small hotel focusing on cleanliness, safety and value for money in prime locations.

Under the concept, a 90-room hotel requires 100 square wah of land.

“It’s difficult to find a good location to build a large or medium-sized hotel in the commercial area of Sukhumvit from Soi 1 to Soi 55,” Mr Sarun said. “But the concept of S Box is suitable for the current situation.”

Last year, hotel supply in Bangkok totalled 41,961 rooms. According to CBRE Research, international tourist arrivals to Thailand will continue to rise this year from nearly 30 million in 2015.

S Group believes there is high potential for hoteliers in Bangkok to raise their room rates in line with increasing occupancy rates.

The first S Box Hotel in Sukhumvit Soi 31 has 95 rooms including 21 en-suite capsule rooms. It enjoys an 80% occupancy rate all year.

S_Box_Sukhumvit_Hotel-Bangkok-Hotel_outdoor_area-2-699403

Photo credit: hrs.de

The hotel is a five-minute walk from Phrom Phong skytrain station and the adjoining Emporium and EmQuartier shopping malls. Apart from good design and a convenient location, the hotel has room rates of 750 to 1,200 baht per night.

Mr Sarun said the S Box brand generates better margin than S31, its five-star hotel brand, thanks to lower labour costs.

For example, S Box requires only 30 staff while S31 hires more than 200. The investment cost of S Box is around 1.8 million baht per room compared with 2.5 million baht for S21.

S Box can break even within five years while S31 takes 8-10 years.

The group operates S31, S15, S33, S Box and S Ratchada Leisure hotels.

It is looking for vacant land in the Sukhumvit area from Soi 1 to Soi 55.

“We prefer this area because we can have a suitable room rate. We have no plan to expand into provinces because of tough business and high competition,” Mr Sarun said.

In the past, hotels were mainly located on main roads, but today they can be located on sois within walking distance of main roads or the skytrain.

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Source: Bangkok Post – 28 April 2016

Nora has been in the Corporate Communications arena for a number of years. Nora's role is to communicate all newsworthy items that are of a PR nature.

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