Trav­elodge plans Thai ex­pan­sion

Bangkok Post - - BUSINESS - SUCHAT SRITAMA

US-based ho­tel chain Trav­elodge wants to ex­pand its port­fo­lio in Thai­land with a goal of op­er­at­ing 50 ho­tels by 2020 to cash in on boom­ing tourism.

Jonathan Wigley, chief ex­ec­u­tive of Trav­elodge Thai­land, said the group op­er­ates two prop­er­ties in Thai­land, one in Bangkok and the other in cen­tral Pat­taya.

By 2020, it ex­pects to op­er­ate ho­tels in pop­u­lar tourism des­ti­na­tions such as Chi­ang Rai, Chi­ang Mai, Khon Kaen, Hua Hin, Ray­ong, Phuket, Khao Lak, Koh Sa­mui and Krabi, as well as more sites in Bangkok and Pat­taya (Jom­tien).

“For Thai­land our aim is to have a min­i­mum of 15 prop­er­ties or 3,000 rooms by the end of 2018. We be­lieve in the longer term our ex­pan­sion will en­com­pass 50 prop­er­ties or 10,000 rooms by 2020,” Mr Wigley said.

The chain used t o man­age f our Trav­elodge ho­tels in Thai­land dur­ing 19892000 be­fore end­ing man­age­ment con­tracts be­cause of a change in ho­tel own­ers and man­age­ment deals. These com­prised two ho­tels in Phuket, one in Krabi and one in Bangkok.

The group re­turned to Thai­land with Trav­elodge Pat­taya, which was launched in July this year with 168 rooms and con­sis­tently runs at 80-90% oc­cu­pancy. Trav­elodge Sukhumvit Soi 11, fea­tur­ing 224 rooms, opened early this month and has an av­er­age oc­cu­pancy of over 80%.

Stephen Burt, chair­man of Trav­elodge Asia, said there are nearly 1,000 Trav­elodge branded ho­tels world­wide to­day. The brand’s ex­pan­sion into Asia started in 2017 with its first ho­tel Trav­elodge Kowloon in Hong Kong open­ing in Fe­bru­ary. Trav­elodge Batam in In­done­sia is set to open in Jan­uary 2018, and will fol­low two ho­tels in Kuala Lumpur, Malaysia and in Sin­ga­pore.

“In to­tal, we have 15 ho­tels op­er­at­ing in Hong Kong and South­east Asia, in­clud­ing Malaysia, In­done­sia and Thai­land. Our short-term tar­get for the re­gion [in­clud­ing Hong Kong] in terms of port­fo­lio size is 50 ho­tels and based on our growth tra­jec­tory to date, we ex­pect to achieve this goal by 2019,” Mr Burt said.

Asia is still rel­a­tively small in the con­text of Trav­elodge’s global brand foot­print, but there is no doubt the re­gion of­fers much more growth op­por­tu­nity for the brand, he said.

Mr Burt said the mid-scale seg­ment of­fers greater growth op­por­tu­nity com­pared to the up­scale and lux­ury seg­ments.

Asia has three of the four most pop­u­lous coun­tries in the world — China, In­dia and In­done­sia — as well as sev­eral oth­ers with

sig­nif­i­cant pop­u­la­tions such as Ja­pan, Thai­land, Viet­nam, Myan­mar, South Korea and the Philip­pines.

Asia’s bur­geon­ing mid­dle class has started to travel to re­gional lo­ca­tions, with long-haul mar­kets such as the US, UK and Aus­tralia also in­ter­ested in the re­gion.

“In the very short term we will take over some ho­tels in In­done­sia and Malaysia. We are also work­ing on launch­ing the brand in some gate­way cities such as Sin­ga­pore, Tokyo, Seoul, Jakarta, Bali and Manila,” he said.

Mr Burt said the key el­e­ments from a cus­tomer’s per­spec­tive are great lo­ca­tions, a value propo­si­tion on pric­ing and a high level of se­cu­rity.

From own­ers’ per­spec­tives, there is a fo­cus on de­liv­er­ing an op­ti­mal bot­tom line re­turn and dis­tri­bu­tion costs are be­com­ing a more im­por­tant com­po­nent to the equa­tion.

“We firmly be­lieve mid-scale ho­tels can­not carry the cost bur­den of ex­pen­sive loy­alty pro­grammes so we will con­tinue to fo­cus on our ‘Trav­elodgeR’ recog­ni­tion pro­gramme that gives mean­ing­ful ben­e­fits to our guests but at a frac­tion of the cost of a full-blown loy­alty pro­gramme,” said Mr Burt.

Trav­elodge Sukhumvit 11 opened in early Novem­ber this year. The brand aims to have 50 prop­er­ties in Thai­land by 2020.

Trav­elodge chief ex­ec­u­tive Jonathan Wigley (right) with Asia chair­man Stephen Burt.

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