Dusit to expand into Hainan with Dusit Thani and Dusit Devarana over next 3 yrs
The strengthening baht may have hurt some investors' sentiment, but Dusit International, the operator of Dusit Thani five-star hotels and resorts, says it is time to invest abroad.
Europe, the United States and Japan are in its focus as their currencies weaken against the baht, resulting in lower property prices for Thai investors.
In Europe, London has the most potential because this global financial capital is a gateway to the continent, so hotel accommodation is in demand year round. However, Paris is another option. Meanwhile the US market is also attractive, but is difficult to enter because of high competition.
Rustom Vickers, group director of development at Dusit International, told The Nation that having properties in the West would help fulfil the company's ambition to become a truly international brand. Also, it would strengthen its performance from continent to continent via chain connectivity.
In the past couple of years, the firm has prepared to go international seriously by recruiting skilled workers and installing reservation and operational systems to sustain its service standards. Vickers believes that Dusit will become a globally recognised hotel brand this year.
The international market is very important for securing the company's long-term business performance at a time when the hospitality business in Thailand is saturated, forcing room rates down. Also, higher operating costs, especially due to higher wages, are a factor.
Overseas expansion will be operated under three brands: the flagship Dusit Thani, Dusit Devarana, and dusitD2. The firm also operates Dusit serviced apartments.
Establishment of development offices in foreign cities is a key strategy. These offices will play a key role in looking for new properties and negotiating with local investors. Offices are already open in Seattle, Dubai, New Delhi and Hong Kong, and one is planned in the near future for Shanghai.
Between now and 2015, Dusit International plans to begin operating 12 new properties via management contracts in five nations. Over the next five years, it expects to have 50 hotels in its portfolio, half of them in Asia.
Currently, the firm operates 17 properties, mainly in Thailand and owned by the company. It expects that over the next five years, the number of properties it owns and those it operates via management contracts will be almost equal. It is also looking to expand its chain in Thailand, especially in secondary provinces such as Khon Kaen and Phuket, as well as on Koh Samui.
Southeast Asia is in its focus, particularly Myanmar, the Philippines and Indonesia, to cash in on the opening of the Asean Economic Community in 2015. In addition, China is considered a big market.
Over the next three years, there will be three openings in China. Two will be in Hainan under the Dusit Thani and Dusit Devarana brands, and the third one will be in Qingyuan, Guangdong province, under the flagship brand.
The Philippines is viewed as a promising market, thanks to its growing economy and reformed investment regulations, as well as construction of new airports and casinos to help promote local tourism. At present, the company operates a Dusit Thani in Manila and is in talks for launches of two new properties. Outside the capital city, it plans to sign a management contract with a property owner in Davao. In Singapore, the company will sign a contract with a property owner soon. It is also in talks in Myanmar. Business in China is expected to grow quickly. In January, the firm formed a joint venture with Changzhou Qiao Yu Group.
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