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Imperial Hotels Group Investing billions of Baht in
 Two Hotel Projects in Thailand; Planning to
 Enlarge a Five-star Hotel in Cambodia
By Boonsong Kositchotethana, Bangkok Post, Thailand
Knight Ridder/Tribune Business News

Nov. 1, 2003 - Liquor tycoon Charoen Sirivadhanabhakdi is taking further steps to consolidate his property empire through the Imperial Hotels Group by investing billions of baht in two hotel projects in Thailand while planning to enlarge a five-star hotel in Cambodia whose construction is nearly completed.

The additional investment comes on the heels of the recently concluded partnership deal with Singapore's state-owned CapitaLand to revive two key projects in Bangkok -- a downtown serviced-apartment block and a suburban commercial and residential complex -- shelved since the 1997-98 crisis.

The hotel investment further underlines Mr Charoen's move toward rebuilding his property portfolio, turning his extensive real-estate banks into cash-spinning infrastructure against the backdrop of a reviving property market and hospitality businesses.

Mr Charoen's real-estate portfolio already includes North Park with the Rajpruek Golf and Sports Club in Bang Khen, Empire Tower on Sathon Road, and Pantip Plaza on Phetchaburi Road.

His TCC Group also owns Beer Thai (1991), the brewer of top-selling Chang beer, as well as lucrative liquor businesses and stakes in insurance companies.

The two committed hotel ventures in Chiang Mai will be the 17th and 18th properties under the Imperial Group, which now operates 16 hotels and resorts, including the Hotel Plaza Athe{AAC}ne{AAC}e in New York, with a total of 3,500 rooms.

Pranpansak Bhatayanond, senior executive vice-president of the Imperial Hotels Group, said it would spend 900 million baht to build a four-star, 300-room hotel in Chiang Mai city. The hotel forms part of Chiang Mai Nice Square, a partly finished commercial complex that Mr Charoen's conglomerate acquired from an insolvent developer.

The other investment in suburban Chiang Mai involves 400 million baht to renovate and expand the old Chiang Mai Sports Club, which will be rebranded as the Imperial Chiang Mai Sports Club, Mr Prapansak said in an interview.

The low-rise, four-star resort will have 120-150 rooms and include a par-three golf course, a spa and gym. Development of the site, also acquired from a struggling operator, is due to begin next year.

Plans are also afoot to expand the Imperial Angkor Palace Hotel, the five-star, 224-room property located just four kilometres from Angkor Wat, in Cambodia's Siem Riep.

"We are looking at the option of either adding 150 villas or building 180-200 conventional guest rooms to fully utilise the 80-rai area on the compound," said Mr Prapansak, adding that the supply of five-star hotels in Siem Riep was insufficient for growing demand.

He did not say how much it would cost to expand the Siem Riep property that has already cost 650 million baht. But he noted that the cost of building a conventional four- to five-star hotel in Thailand was about three million baht per room.

The Imperial Angkor Palace is now 90 percent complete and scheduled for a soft opening in March or April.

Construction of the hotel was delayed after the brief anti-Thailand riots in Phnom Penh in January. In the tense weeks that followed, Mr Prapansak said the firm struggled to recruit back the 700-800 construction workers. As a result, it missed the original opening scheduled for this month.

The presence of the Imperial Angkor Palace is expected to create a stir in the five-star hotel business in Siem Riep, likely pushing down room rates to a range of US$180-200 a day, from $240-250 at present, he said.

Four five-star hotels now operate in Siem Riep, including one run by a Singaporean group and a Sofitel from France's giant Accor chain.

Mr Charoen acquired the Imperial Hotels Group eight years ago from Arkorn Hoontrakul, who died three years ago. The company expects to close this year with an average occupancy rate across its properties of 73-75 percent, thanks to the tourism recovery after the Sars outbreak.

The impact of the virus cut its average occupancy for the first eight months of the year to 65 percent from 70 percent a year earlier, according to Mr Prapansak.

"We began to see a clear recovery in September with reservations improving by 10 percent from the preceding month. This month's figures are 20 percent higher than in October 2002."

-----To see more of the Bangkok Post, or to subscribe to the newspaper, go to http://www.bangkokpost.com

(c) 2003, Bangkok Post, Thailand. Distributed by Knight Ridder/Tribune Business News.

 
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