Jan. 27, 2006 - Asian hotel brands are likely to grow at a stronger pace in the international market as investors shy away from American chains over fears about terrorism, according to the director of a Thai hotel chain.

Pornsarin Meathivacharanondh, director of property development and investment at the Dusit Group, said Asian brands such as Banyan Tree, Shangri-La, Marco Polo and Dusit Thani had performed well over the past five to 10 years.

She said several investors, particularly those from Middle Eastern countries, had refused to sign contracts with American hotel chains in order to protect their investments from terrorist attacks.

The trend stemmed from the bombing of several American hotel chains in Jordan last year.

However, Ms Pornsarin said, "There is nothing wrong with American chains, as they can manage hotels well and generate benefits to investors."

She added that the Dusit Group was in discussions with investors about opening more hotels under the Dusit brand in Thailand and overseas.

The group has three brands: Dusit Thani for five-star hotels; Royal Princess for three-to- four-star hotels; and its latest brand, D2 for four-star lifestyle hotels.

At present, it owns and operates 20 hotels, 15 of which are in Thailand, with the rest in Indonesia, Burma, the Philippines and the United Arab Emirates. The company plans to persuade at least three more new hotels to use its brands in Thailand and other countries this year.

Ms Pornsarin said the company aimed to have at least five D2 hotels in Thailand and abroad in the next five years.

The Dusit Group is also looking at buying existing, compact hotels in tourist destinations and renovating them to become part of its company.

Ms Pornsarin was speaking about investing in the hotel business at a training event yesterday in Bangkok, organised by the Thai Appraisal Foundation.

She said the challenges for hoteliers lay in diversifying risk, customer loyalty, and expanding into new customer bases.

Aongorn Somprasong, corporate manager of Rajadamri Hotel Plc, which owns The Four Seasons Hotel in Bangkok, warned investors that hotel operating costs would be affected by rising interest rates, inflation and oil prices.

Though the hotel business can generate high yields for investors, he said it was a long-term investment and should be held for a minimum of 10 years.

Ms Aongorn said the outlook for investment in the hotel business in Thailand was upbeat because the country attracted a large number of tourists.

Statistics have shown that the number of international tourists has grown by eight percent annually on average over the past 10 years.

-----

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

Copyright (c) 2006, Bangkok Post, Thailand

Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail [email protected].