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Apartments gain edge on hotels

Serviced apartments gaining edge over hotels. The recession has driven business travellers to shift from five-star hotels to serviced apartments that charge less and provide more facilities. Wiwat: Travellers watching budgets ''This is a hard time for hotel operators while serviced apartments are enjoying benefits amid the crisis,'' said Wiwat Tangjitkobboon, a group director of Kasemkij Co, which owns and runs the Cape House, Kantary and Kameo serviced apartments in Thailand. Occupancy rates at its properties currently average 70-80%, with most of its customers on long-term contracts of one year or more. The Thai Hotels Association (THA) recently reported that average occupancy of Bangkok hotels was around 30% and as low as 5-10% at some properties after the red-shirt political riots during the Songkran festival. The occupancy rate was less than 50% on average in Chiang Mai and Pattaya while Phuket posted around 60-70%. ''Many customers have shifted from five-star hotels to serviced apartments because the latter offer more space and facilities and charge less,'' said Mr Wiwat. ''Many companies are cutting their travel expenses, so serviced apartments can match limited budgets.'' During the 1997-98 economic crisis, serviced apartments suffered as travellers took advantage of cheap hotel rates resulting from the baht's depreciation. Many financial professionals who had used serviced apartments left Thailand as businesses collapsed. Today, both leisure and business travellers are looking to save money on accommodation and serviced apartments meet their need, Mr Wiwat said. To strengthen its competitiveness, Kasemkij is promoting value for money this year. It also is looking to attract more meeting and incentive business to fill rooms on weekends. ''Our 11 properties are located near industrial estates such as in the Si Racha district of Chon Buri, and Rayong. Consequently, our rooms will be available on weekends because most customers will go back home or travel,'' he said. Because meetings and incentive activities tend to be held on weekends, the company's sales team is reaching out to their organisers. ''Around 50% of our meeting and incentive business comes from state agen cies. To deal with them, we will help them manage limited budgets,'' said Mr Wiwat. Kasemkij expects its revenue will be on par with last year's figure. However, Mr Wiwat is still confident that the economy will improve by year-end, so now is a good time to prepare for future investment. ''As I talk with many international executives, they say this is a good time for construction and preparing expansion plans because they will benefit when the economy returns to normal,'' he said. The company plans to open two properties in Rayong and Kabinburi with a total investment of 3.5 billion baht. Kameo House in downtown Rayong will open 70 rooms in the first phase next month, and the 170-room Kantary Hotel & Serviced Apartment in Kabinburi, in Prachin Buri province, is scheduled to open in August. Recently, the company opened the 160-room Kantary Hotel & Serviced Apartment in Ayutthaya. Its occupancy of about 30% is expected to increase to 50% in the first year of operation. Bangkok Post May 2, 2009

 

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