Travelodge plans Thai expansion
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.