Erawan’s Bt10-bn five-year plan to focus on Hop Inn chain

Real Estate February 11, 2016 01:00

By SUCHAT SRITAMA
THE NATION

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ERAWAN GROUP plans to invest up to Bt10 billion over five years mainly to develop its lower-segment hotel brand Hop Inn in Thailand and the Philippines.



“The Philippines will be the first overseas market for us. The country has high potential for tourism in the long term,” president Kamonwan Wipulakorn said yesterday.
About Bt3 billion will be for Hop Inns in Thailand, Bt2.3 billion for Hop Inns in the Philippines and the rest for other hotel projects in Thailand, including another Novotel in Bangkok.
By 2020, the group aims to increase its own fast-growing budget brand, Hop Inn, in the home market to 25 from 18. 
The first Hop Inn in the Philippines will open in Manila this year and 20 are expected to be operating in major cities there. 
The group is exploring investment opportunities in other countries in the region. It is waiting for the right time to enter Indonesia.
“We aim to be a leading investor in Thailand and in Southeast Asia,” she said. 
The group targets 95 hotels in Thailand and Asean by 2020, up from 33 last year. Rooms are expected to increase from 5,676 last year to nearly 10,000 in 2020.
Its revenue is expected to grow on average by 11 per cent per year to Bt10 billion in 2020 from Bt5.3 billion last year, while its average occupancy rate is predicted to improve to 80 per cent this year from 73 per cent last year, when unrest ruled in the country. 
 
Self-investment strategy 
As part of its self-investment strategy, the group will launch a real estate investment trust called the Erawan Hotel Growth Property Fund this year. The fund will help manage its assets. 
Some of its hotels will be sold to this fund so the group can have additional funds on hand for future investment.
Kamonwan visited the United States recently to meet with American investors and present the five-year growth strategy to include expansion outside Thailand for the first time particularly with its Hop Inn brand. 
“These investor meetings are an opportunity for institutional money managers to learn about Erawan Group’s operations and expansion strategy as well as to discuss overall trends in Thailand’s hospitality industry, which reached new highs in 2015 thanks to arrivals totalling nearly 30 million,” said Mark Decker, founder and president of Decker & Co, which hosted Kamonwan and her team in the US. 
The group also operates luxury hotels throughout key destinations in Thailand, with global brand operators such as Hyatt, Marriott, Accor, IHG and Starwood. 
Until 2005, the group focused on its luxury hotel properties Grand Hyatt Erawan Bangkok and JW Marriott Bangkok. 
From 2005-10, it diversified into mid-scale and economy brands such as Renaissance, Holiday Inn, Courtyard and Ibis. 
The last five years focused on Ibis and budget brand Hop Inn to serve younger tourists.