Absolute enters hotel services fray

Absolute is a 50:50 joint venture between Tanayong and Jonathan Wigley and registered itself with a capital of Bt100 million in April.

Chief executive Jonathan Wigley said the first five hotels under the company's management will be properties owned by Tanayong, while the rest will be managed for other land developers.

"Although Tanayong holds a 50-per-cent majority stake in Absolute, our management will be independent from the stakeholder. However, when we sign contracts to manage hotels for other land developers' hotels, we will select hotels that are at least 5 to 10 kilometres from Tanayong properties to avoid conflict of interest," he said.

Wigley said the company will develop two brands, each focusing on boutique hotels and three- to four-star hotels. U Hotel will be its brand for boutique hotels with less than 100 rooms. The second brand will focus on three- to four-star hotels with more than 100 rooms. The company will also act as a consultant for Tanayong's planned luxury hotel, he said.

Earlier, Tanayong had announced it would develop 16 new hotels in Thailand and overseas until 2013, with a cumulative worth of Bt23 billion. The U Hotel in Chiang Mai is the first.

Wigley said that when the company signs contracts to manage hotels for its customers, it will guarantee a fixed rate of return on investment. If the organisation cannot meet the target, the company will not forfeit the management fee.

"We believe that when we sign the contract to manage our customer's hotel, we will manage it to get a greater internal rate of return within three to 10 years, depending on the location and the target audience," he said.

For its first hotel chain, Wigley said the company estimates an occupancy rate of up to 75 per cent in season (between November and February). Up to 70 per cent of its customers will be foreign tourists from the United States, the UK and the rest of Asia, while the rest will be local visitors.