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The Erawan Group Developing the First Courtyard by
 Marriott and the First Renaissance Branded
 Hotels in Thailand

By Sujintana Hemtasilpa, Bangkok Post, Thailand
Knight Ridder/Tribune Business News

Jul. 5, 2005 - With the focus now on hotels and resorts, The Erawan Group, formerly Amarin Plaza, yesterday announced a 1.3-billion-baht investment in two hotel projects and signed a 30-year management contract for the two properties with Marriott International Inc.

The partnership with Marriott International, a leading US-based international hotel-management chain, will result in the introduction of two new hotel brands under the Marriott umbrella in Thailand, The Courtyard and The Renaissance, according to Kasama Punyagupta, president and chief executive officer.

The total investment will come from the company's cash flow and loans from local financial institutions, which will lift the company's current debt-to-equity ratio up to 1.3 from 1.0 now, said Mr Kasama.

The first project, named Courtyard by Marriott Bangkok, is located off Rajdamri Road in Bangkok, just behind the Four Seasons Hotel. The Erawan Group is spending one billion baht transforming its Park Lane Mansion serviced apartment into a 316-room four-star hotel, targeting business travellers. It is expected to be operational in the second quarter of 2007.

In the second project, the group has spent 300 million baht acquiring all shares of the two-year-old five-star Buriraya Resort and Spa on Koh Samui from Singapore-based Amanzen Co. The hotel is now under renovation and has been renamed the Renaissance Koh Samui Resort and Spa. It is positioned as a five-star deluxe hotel. Renaissance is Marriott's global brand for luxurious boutique-de{AAC}cor hotels with the highest growth rate.

On completion, Renaissance will be the second global hotel brand on the resort island after Le Me{AAC}ridien, he said.

Ed Hubennette, vice-president for Asia and South Pacific of Marriott International, said both the Renaissance and Courtyard brands had a promising future in Thailand.

As the Thai economy continues to grow, the demand for four-star accommodation for business travellers will grow rapidly in the country's provincial areas. This will enable its Courtyard brand in particular to expand rapidly, said Mr Hubennette.

"Before, the company has been involved in a variety of real estate-development businesses. From now on, we will focus on hotel and resort development with an ambition to become a leader in this business within the next three years," he said.

Amarin Plaza officially changed its name to The Erawan Group Plc on June 15.

Besides the two new properties, The Erawan Group is a 74 percent shareholder of the five-star Grand Hyatt Erawan Bangkok hotel and the sole owner of the JW Marriott Bangkok, another five-star hotel. Its non-hotel businesses include the Amarin Plaza, Erawan Bangkok and Ploenchit Center.

Right now, hotel business contributes more than 80 percent to the group's revenue, while retail business accounts for almost 20 percent, according to Mr Kasama.

In the next three years, when the operations of the two new hotels are well established, he anticipated the revenue contribution from the retail business to drop to less than 10 percent, while its total revenue could increase by 30 percent from the projected 800 million baht this year.

Erawan Group shares (ERAWAN) in the Stock Exchange of Thailand yesterday closed at 1.78 baht, down two satang, in trade worth 187,000 baht.


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Copyright (c) 2005, Bangkok Post, Thailand

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