Fico Group shelves ambitious regional hotel development plans

Fico, a diversified business conglomerate, said the move was a result of the global financial crisis.

Krit Srichawla, CEO of Fico Corp, said the group had planned to build the mid-priced three- and four-star hotels in Thailand and neighbouring countries like Laos, Cambodia and Vietnam, but the project was shelved for the time being.

Under the plan, each hotel will have 100-150 rooms for an investment of between Bt2 million and Bt3 million per room.

"We worked out a joint-investment plan before the global economic difficulties took hold. Now the situation has changed dramatically, and there's a lot of uncertainty. During this time of financial difficulty, banks are denying loans and withholding financial support, but we expect the global financial situation to be better in the second or third quarter," he said.

The global economic slowdown has seriously affected international tourism. However, one of the biggest concerns for foreign investors is Thailand's political problems.

"I don't know how long the project will be delayed, because no one knows when the economy will recover. Anyway, I still have hope that mid-priced hotels will continue to enjoy opportunities, as the market is gearing towards this trend," Krit said.

Krit said the Fico Group itself would continue developing three hotel projects: two in Bangkok and one on Koh Samui.

The family-run group bought the Silom Plaza Hotel and a hotel on Koh Samui, and both are being renovated to become the Novotel Silom and Mercure Samui, respectively. Another is the 390-room Novotel Ploenchit, which is under construction and due to open late next year.

The group now owns the Grand Millennium Sukhumvit, the Interchange Tower and the Exchange Tower in Soi Asoke, as well as a premium serviced apartment in Soi Langsuan that is being transformed into Asia's first art and fashion hotel to be managed by Accor under its M Gallery label.

"We've started about 20 per cent of the construction for our art and fashion hotel in Langsuan. This luxury boutique hotel will feature more than 200 guest rooms and open 18 months from now," said Fico Group chief operating officer Sofi Sui.

Krit said the Fico Group expected Bt1 billion in revenue this year from property development.

He said the group also operated textile, leasing and commodity-trading businesses. About 70 per cent of revenue in its textile and garment business come from export.