Amari veteran warns of pitfalls

"Foremost, there is an unprece¬dented supply of rooms. There is a good likelihood many new hotels might not meet projected earnings," said Rufli, who heads 17 properties and a staff of 4,000.

"Many new hotels are projecting Bt6,000Bt7,000 a night, but the reality is they may have to settle for Bt2,000."

"Amari is fortunate to be an estab¬lished chain and we have much of the convention business from regional corporations," he said.

"Bangkok faces the greatest over¬supply, with at least 60,000 existing rooms and another 10,000 new units coming on the market soon. Also, many serviced apartments are now selling day rates, eating into the pie."

In the worstcase scenario, there could be many failures and the sec¬tor could see a rise in nonperform¬ing assets next year, he added.

Adding to the problem is the change in tourist demographics, Rufli said.

European and US travellers, who have formed a big portion of visitors, will gradually be replaced by visitors from nearby Asian and Middle Eastern countries.

"The high season, which used to be marked by the winter months in the West, will no longer apply," he said. "Because of the high cost of oil, air fares and inflation, many trav¬ellers may cut back on travel," he predicted. With the drop in demand, competition is most like¬ly to intensify.

In looking back at his four decades with the Amari Group - founded and run by the Karnasuta family under the ItalThai umbrel¬la - Rufli said he was fortunate to have worked with some of the Kingdom's best employers.

"Both Kurt Wachtveitl of the Oriental and I have worked these many years for just one employer [ItalThai], something quite unheard of in the hotel world. This says a great deal about how well we are treated."

Rufli was hired to run ItalThai's two hotels in Pattaya - the Nipa Lodge and Orchid Lodge - in 1972, before taking over as head of the chain nationwide.

In 1992, the chain, which was at the time called Siam Lodge, changed its name to Amari.

Rufli fondly remembers ItalThai founders Dr Chaiyudh Karnasutra and Giorgio Berlingieri.

"They worked well together, Dr Chaiyudh was a detailed man, good with money and connections. Giorgio was the bigpicture man with the vision."

The duo also bought the Oriental in the late Sixties before bringing in Hong Kong Land as partners.

The venture resulted in the Oriental becoming one of two flag¬ships under the Mandarin Oriental brand.

"Today many hotels are run more like investment vehicles to be bought and sold on the market. Chains like Holiday Inn and Meridien have changed hands several times the past decade," he said.

"Therefore, the level of commit¬ment can be rather short term," he added.

"If a general manager thinks the hotel will be sold in two years or so, what's the point of planning ahead?"