Jul. 24, 2002 - Starwood Hotels and Resorts Worldwide Inc expects to manage at least 15 hotels in Thailand within three years, compared with seven at present, according to a senior company executive. 

Because Thailand had shown great strength and resilience through the recent challenging years, the company considered the country a key hospitality destination, said Miguel Ko, president of Starwood Hotels & Resorts, Asia Pacific. 

"Moreover, it has a service culture and the right climate, while the land cost is not skyrocketing and the labour cost is manageable," he said yesterday. 

The company's budget for expansion in Thailand was flexible, he said. "Whether we would only manage [hotels] or own some equity depends on the attractiveness of the investment." 

Starwood expected to introduce its trendy boutique brand, W Hotel, in Bangkok while other brands such as Four Points and Sheraton were likely to be introduced in resort centres such as Hua Hin and Pattaya, said Mr Ko. 

He said that China, Japan and Thailand were the company's three priority markets in Asia. China had become more attractive as the Beijing government had relaxed regulations on foreign investment in the property industry. In Japan, meanwhile, continuing financial difficulties had made the cost of land more affordable. 

While the world tourism industry suffered a setback immediately after the Sept 11 events, Starwood had weathered the crisis as the profit margin in the hotel industry was much higher than in the airline business, said Mr Ko. 

In North America, tourism growth was down by 7 percent year-on-year in the first half of 2002, while the decline in Europe was 3-4 percent. 

However, the Asia-Pacific tourism industry recorded growth of 1-2 percent , said Mr Ko. 
 

Yesterday Starwood added a new property to its portfolio in Thailand. The group signed a 20-year contract with Grande Sukhumvit Co and Grand Pacific Hotel Co, the two major shareholders in the Grand Pacific Hotel in Bangkok, to manage the property and rebrand it as the Westin Grande Sukhumvit.  The 391-room, four-star hotel on Sukhumvit Road will undergo extensive renovations before being relaunched as a five-star property in early 2003.  Grand Pacific shareholders had agreed to lend US$5 million to fund the

Grand Pacific Hotel, Bangkok  259 Sukhumvit Road Bangkok, Thailand

Room rates at the Westin Grande Sukhumvit would be at least 50 percent higher than at present, he said. 

In the first half of this year, the hotel had an 82 percent occupancy rate and the company expects the rate to fall to 75 percent next year though higher rates would offset the difference. 

Kirin Narula, managing director of Grande Sukhumvit Co, which also owns the nearby Sheraton Grande Sukhumvit, said hotels on Sukhumvit Road had good potential, with occupancy between 80 percent and 90 percent this year. 

Other properties in Thailand managed by Starwood Hotels and Resorts include the Sheraton Grande Sukhumvit, Royal Orchid Sheraton Hotel & Tower, Westin Chiang Mai, Sheraton Grande Laguna Phuket and Rayavadee in Krabi. The Sheraton Krabi Resort will be added to this list in December. 

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(c) 2002, Bangkok Post, Thailand. Distributed by Knight Ridder/Tribune Business News. HOT,