Hotel chains are cautious about expansion
Guests relax by the pool at Vijitt Resort in Phuket on July 1st, the opening day for arrivals through the Phuket Sandbox Tourism Program. (AFP photo)
Hotel chains continue to be light on maintaining liquidity as they cautiously implement expansion plans amid the pandemic that has rapidly worsened prospects for a recovery.
Garth Simmons, Accor’s chief executive for Southeast Asia, Japan and South Korea, said Accor has implemented a recurring cost savings plan of 200 million euros (7.6 billion baht) with strong liquidity of over 4 billion euros, which the group has Step into a strong position to weather the current crisis.
Although there have been delays in opening new hotels due to shortages of materials and labor, Accor remains committed to expanding its portfolio in Thailand from 89 hotels to 107 hotels over the next five years.
However, the slow adoption of vaccines is seen as the biggest threat to the hospitality industry recovery in Thailand.
Mr Simmons suggested that travel bubbles are essential to the survival of Thai tourism as there are hopeful signs from potential countries where governments are keen to reopen their borders safely, such as Singapore, Taiwan, Indonesia and Vietnam.
William Heinecke, founder and chairman of Minor International, said the company had put in place a strategic roadmap to support business continuity during and after a three-phase pandemic.
The first phase is to focus on the immediate priorities. This is followed by the second phase, which would include preparations for the medium-term rebound such as scenario analyzes.
The third phase is to highlight the post-pandemic business opportunities.
The company continues to focus on minimizing cash usage and maintaining liquidity by controlling costs and reducing capital expenditures over the next two years.
Dirk De Cuyper, S Hotels & Resorts (SHR) chief hospitality officer, said the company has implemented a new model for its hotel operations that focuses on flexible workforces based on occupancy rates.
It will increase the efficiency of its existing portfolio in the short to medium term.
For SHR’s long-term plan, the company plans to invest in key tourist destinations with a strong seasonal balance.
“Any short-term expansion will be carefully considered, while there will be many investment opportunities after the pandemic, so we need to be careful about re-setting our investment criteria,” said De Cuyper.
SHR intends to expand into an asset-light portfolio of self-managed lifestyle hotels and resorts in Thailand to meet the growing demand for leisure activities going forward.
Onyx is on track to open hotels in Thailand and Asia Pacific despite setbacks on some projects due to restrictions amid Covid-19, said Yuthachai Charanachitta, group chief executive of Italthai Group.
The Onyx Hospitality Group, a hospitality company of the Italthai Group, will open a new Shama hotel in Bangkok’s Yen Akat by October.