Erawan plans 25 lower-priced Hop Inn openings

Corporate April 03, 2014 00:00


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THE ERAWAN GROUP, one of the country's leading hotel developers, has budgeted Bt1.5 billion to open 25 Hop Inn hotels across the Kingdom through next year, a strategic move to put more focus on the fast-growing lower-priced segment.

It claims Hop Inn will be Thailand’s first budget hotel brand offering high service standards. The firm will open 10 Hop Inns this year, the first two in Mukdahan and Nong Khai this month during the Songkran Festival. The other eight openings will be in Kanchanaburi, Udon Thani, Ubon Ratchathani, Tak (Mae Sot), Nakhon Ratchasima, Lampang, Sa Kaew and Khon Kaen provinces.
Next year, 10 will be opened across the country, especially in the Southern region, said Kamonwan Wipulakorn, president of the Erawan Group. 
In general, the Hop Inn concept is a six-floor hotel with 79 rooms. Its room prices range from Bt550 to Bt650, depending on the province. The company projects an average occupancy rate of 80 per cent. Its clients will be businesspeople moving from province to province. Corporate and state agencies are considered as potential sources of clients looking for places to hold meetings and seminars.
“All properties will consistently offer the same quality standards based on the brand’s four pillars: convenience, comfort, cleanliness and safety,” Kamonwan said. 
Erawan expects Hop Inns to contribute 5 per cent of the group’s sales initially. Under its five-year plan, it will be a key contributor to the group, with the hope of providing 25 per cent of total EBITDA (earnings before interest, taxes, depreciation and amortisation). 
Erawan’s investment in the Hop Inn brand is lower than for other hotel properties, but it should contribute a higher margin, covering its investment cost faster than general hotels, which take eight to 10 years.
Last year, Erawan Group earned Bt4.733 billion in total sales, with net profit of Bt937 million. 
This year, the firm will open a Mercure and extend its Holiday Inn hotel property, both in Pattaya. Also, Ibis Style will be opened in Krabi.