CHR hotel occupancy weathers flue outbreak

The group's occupancy rate is a healthy 67 per cent, compared to 44 per cent for the industry.

Gerd Steeb, president of the company, said the global economic crisis and domestic political turbulence had caused more problems for the group than the flu outbreak. With the global economy expected to move into a recovery phase in the middle of next year, the company's investment and expansion plans remain on track, Steeb said.

CHR's Pattaya property development is to have a soft opening later this month, while another in the Maldives is due to open later this year. Much of the firm's Bt2.9 billion investment budget for this year has been allocated to hotel openings.

A project on Phuket's Karon Beach is scheduled to open in mid-2010, while another on Koh Lanta will start construction soon, with opening set for 2011.

"At the end of 2010, the number of properties under our management will be over 30," Steeb said.

He attributed the healthy operations to the company's quick reactions to the beginning of the global economic crisis in September and the Bangkok airport shutdown a few months later. Sales forces were strengthened late last year, as the signs of unfavourable economic con-ditions emerged, particular-|ly for Australia and Europe. The strategy paid off as bookings from Australia are near-ly double those of last year. While the UK market is doing well, the German market has seen a decline in spending. Online bookings have in-creased 40 per cent on-year, however.

Despite the troubles, Steeb said, the company has maintained room occupancy rates, though properties in some destinations such as Koh Samui have seen a sharp drop in travellers. CHR forecasts a 9-per-cent rise in sales this year.

"If we cut the rates, [customers] would ask for the same rate as last year. You can't act like a yo-yo," he said. Though the number of guests has dropped, the company is satisfied that returns match those of other hotels that welcomed more guests at lower rates.

Steeb also considers it necessary to establish a larger presence overseas, given that CHR has properties in most major tourist destinations. Most of the expansion is driven through management contracts, which do not entail huge investment. CHR plans to sign more management deals soon, thanks to increasing demand for Thai hospitality services among international properties, Steeb said.