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Malaysia-based Sunway International Hotels & Resorts Seeking to
 Expand into Thailand with its Two Brands - Sunway and Allson
By Somporn Thapanachai, Bangkok Post, ThailandMcClatchy-Tribune Regional News

Jan. 24, 2008 - Malaysia-based Sunway International Hotels & Resorts is seeking to expand into the Thai hospitality business to become the leading regional player in this industry, said chief executive officer Hanley Chew.

Sunway Group has two hotel brands, Sunway for premier properties and Allson for economy customers. It has about 20 hotels, half of which are in Malaysia and the rest in Vietnam, Cambodia, Indonesia and Singapore. It projects to have 50 hotels in the Asia Pacific region in the next five years through expansion in China, Australia and India.

Mr Chew said the group wanted to be a strong regional player and it realised that the missing location from its portfolio was Thailand, which was poised to become a strategic location feeding customers to its other hotels in the region, especially Cambodia and Vietnam.

"Our plan for Thailand is very clear for this moment. We are looking for opportunities whether it is an investment opportunity, joint venture or management contract -- one of these opportunities in a good location. We are very open as far as the opportunity is concerned," he said.

"We always recognise that geographically Malaysia is not a good gateway in Asia as we are sandwiched between Thailand and Singapore. Therefore, we believe that Bangkok is a very important gateway in order to grow in this region. Thailand is too important for us to ignore so we must have our presence here."

Mr Chew said the company was not in a hurry to enter the market as it wanted to find the right partner with the right piece of land. It wants to start in Bangkok and later spread to resort locations in Hua Hin, Koh Samui, Phuket or Pattaya.

The company is in discussions with prospective partners for management contracts but all talks are in the preliminary stages and it still has not concluded which brand -- Sunway or Allson -- would be started first in Thailand.

He said four-star hotels generally brought more profit in terms of return on investment so they were suitable for owners with a pure investment purpose.

Mr Chew said another reason to come to Thailand was human capital as it was still easy to recruit and train staff.

The Malaysian hospitality business faces a shortage of personnel as many employees are now working in China, Macau and Singapore.

Despite strong competition in the Thai hospitality market, the company believed that it could work with travel agents to sell its name related to the flagship Sunway Lagoon, which is known regionally for its superb water theme park.

The change of marketing in this business towards more direct marketing through the internet would help Sunway to directly communicate with potential customers.

He noted that the Tourism Authority of Thailand was right in promoting the Mice (meeting, incentive, convention and exhibition) market to attract quality tourists to the country.

Sunway's hospitality business contributed about 20 percent to the whole Sunway Group, with 12 percent revenue growth last year. The company expects to maintain the same growth this year.

All of the company's hotels have been profitable with 40-48 percent gross margins in the past few years.


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Copyright (c) 2008, Bangkok Post, Thailand

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