Foreign capital targets old hotels
The Thai Hotels Association (THA) said foreign investors were injecting money into old Thai hotels and refurbishing them, because that was more cost-effective than building new ones.
THA president Chanin Donavanik said 80 per cent of Thailand's five-star hotels were under the management of foreign investors and that there was a tendency for more Thai hotels to fall under foreign control. Chanin said investors were interested in four-and five-star hotels in Thailand's top tourist destinations, such as Bangkok, Pattaya, Chiang Mai, Koh Samui and Hua Hin. Hotels recently sold to foreign investors include the Millennium Hilton, which was taken over by Singaporean firm City Development; and the Conrad, sold by Hong Kong-based Grand Asset Development to Lehman Brothers. The THA said the reason Thai owners sold their hotels was because while they preferred a drop in income per room to investing in renovations, business falls off if they promote cheap prices. The THA pointed that the key reason foreign investors bought old hotels was that it was cheaper to renovate than build new. He added that investors were interested in Thai hotels because the Thai tourism and hotel market was quite large, and buying hotels in Thailand was easier than in other countries in the region.
Suchat Sritama The Nation
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