Robinson Club in Khao Lak
German travel group ventures into Asia via Thailand, writes Jesus Alcocer
Thai property developer Vitya Holding Co and German travel company TUI AG have invested a combined 350 million baht to convert the former Pullman Khao Lak into the first Robinson Club in Asia, according to Vitya managing director Vithita Chakrabandhu Na Ayudhya. Vitya will own 52.5% of the joint venture and receive a proportionate amount of the resulting revenue, with TUI holding the rest. The Thai partner expects the investment to be recovered within five years. A source familiar with the situation said the standard investment period was 6-7 years, but he expected it would be somewhere between 4-6 years for the Khao Lak property.
The German branded resort opened its doors on Nov 1, and held its grand opening on Nov 11. Ms Vithita said occupancy rates are nearing the levels the resort enjoyed under the Pullman, which they expect to surpass.
With 320 rooms (in 15 categories) spread through 280,000 square metres, the property is the biggest Robinson Club to date.
“I consider this resort almost a flagship,” said Mike Schwanke, managing director of Robinson Club GmbH. “In terms of size and surroundings, we have only two comparable properties, one in Turkey and one in Spain. Next year, we look forward to calling it a flagship on the profit side too.”
Before Robinson, the property was under a management contract with Le Meridien (Starwood) for 10 years, and Pullman (Accor hotels). “We could not work out terms with Starwood, and Robinson approached us with a proposal,” she said.
Khao Lak, an area popular with German and northern European tourists, was a natural fit for Robinson’s first outpost in Asia. During the high season 60% or more of guests under Le Meridien and Pullman were German, said Ms Vithita.
“We decided to grow strategically in Asia, that’s why we chose Thailand, where Germans have many ties,” said Mr Schwanke.
German customers represent 70% of Robinson’s business, which is why TUI (Robinson’s parent company), has focused on short-haul European markets. The group has started to expand to long-haul destinations like the Maldives and Thailand. The group will add 30 hotels by the end of 2019.
No other Robinson locations will be opened in Thailand, or in any of the big markets in Asia like China anytime soon although one is being considered in Malaysia. “We would like to concentrate on building our business in Khao Lak first,” said Mr Schwanke.
While the company is focused on “scaling up on proven destinations,” most of them in the Europe, it will also start emphasising “pockets of growth” markets.
By the end of 2022 TUI will add three Boeing 787 to its fleet of 140 aircraft, which serve a substantial proportion of Robinson clients. The new aircraft may help the group add 500,000 long-haul customers (currently 15% of the total) over the next three years.
The company established its first club in the Maldives 2009. While the concept of integrating sports, entertainment and activities into an all-inclusive fee may be new to many Asian consumers, 50% of the club’s customers are Asian, primarily from China, Japan and South Korea.
Robinson Khao Lak’s customers are primarily German, in part because it is currently being marketed in Germany by online travel agencies (including Agoda), according to Ms Vithita. The partnership expects the resort to gain traction among Asian consumers and local expats once it is sold through more channels.
“Part of the plan is to hit the ground running in Australia and Asia, where they haven’t really introduced the product,” said Ms Vithita.
Attracting Chinese consumers to the Khao Lak could be hard, said Mr Schwanke, because of the low prices in the Maldives.
Ms Vithita says Robinson’s model may be beneficial to the property’s top line. “Even when guests have free drinks during meals you see them running to the bar after [where drinks have to be paid for]. It’s almost like you tease them with a couple of glasses of wine. Robinson caters to the wealthy. German yuppies enjoy socialising, and going to the bar is a good way to do that,” she said.
On average, a Robinson club adds €2 million (78 million baht) to Robinson’s €1 billion underlying earnings before interest, depreciation, taxes and amortisation. The group expects a 3% rise year-on-year on its €17 billion revenue in 2016, and yearly profit increase of 10% through 2019.