Thailand’s Kata Group Resorts appears to be addressing the very issues that make skeptics dismiss its intent to list in 2017 as a PR ploy and a way to cash up.
Although the group has been operating hotels in Thailand for more than 35 years, Kata is seen as steps behind other homegrown brands such as Centara or Anantara, which are now bigger, more institutionalized and modernized.
With just six hotels in the bag in a span of more than three decades, along with image and management issues, Kata has its work cut out for a successful listing, said one analyst.
Another analyst, Bill Barnett — managing director of C9 Hotelworks, Phuket, Thailand, which is a Kata stronghold — likes that the group has a basket of hotel assets in highly stabilized markets such as Phuket and Koh Samui and is “taking a logical step that many legacy, family-owned businesses are now facing in Asia’s hotel trade to stay competitive with international chains.”
But Barnett also worries that Kata’s three-brand offering and high capital-expenditure requirements to upgrade existing older hotels will pose challenges. “While the asset offering is solid, it remains to be seen if they can transition their management approach,” Barnett added.
Kata president and owner Pramookpisitt Achariyachai appears to be addressing these very concerns. “The listing will require some adjustment in our operational structure to become a more value-driven organization and cater to our future growth plans,” he said in response to questions about plans leading up to the planned 2017 listing. “Our operational structure has served us well for many years but … we are undergoing a full review to look at ways in which we are able to create a more streamlined, efficient and effective organization. Transparency and good corporate governance will be at the forefront of all future changes as we move forward.”
The group recently appointed Wiswin Pitikulsathit vice president ahead of a new campaign to build a higher, more distinctive international profile. Pramookpisitt said he is banking on Wiswin as “the new generation” who understands future demand and has a strong appreciation of the heritage of the brand and its future potential.
“Khun Wiswin is a passionate and very educated young man capable of assisting us in taking Kata Group to the next level,” Pramookpisitt said. “He understands the demand brought about by the new generation of travelers around the world — the more digitally focused generation.”
Before joining Kata as assistant vice president of asset management, Wiswin was senior financial analyst with Asset Pro Management, which has also been hired by Kata as a financial advisor to identify an ideal listing structure for the company.
Asked how Kata intends to build a more distinctive, international profile — or if there were plans to rebrand the company and the portfolio — Wiswin said, “We will continue to seek opportunities to sponsor international events that offer us the opportunity for a global profile as well as to promote the destination. One example of this is our ongoing support of the Kings Cup Regatta in Phuket.
“We are working through our existing brands to offer segmented and creative guest experiences, which are the cornerstones of our international activities,” he added.
Currently the group operates the Phuket Orchid Resort, Kata Beach Resort & Spa Phuket and Kandaburi Resort & Spa Koh Samui as well as three Beyond resorts in Khaolak, Karon and Krabi. Beyond is an adults-only brand, which the group launched in 2012.
Pramookpisitt also points to a new-generation Kata resort brand, Landmark, the first of which is The Landmark Patong, a mixed-use development combining “a stylish, hip hotel with a community mall.”
“This is a new venture for Kata Group and one which we feel is well suited to Thailand in busy resort areas such as Patong in Phuket, which are becoming more urbanized,” Pramookpisitt said. “The needs of travelers are changing in these areas as the customer demographic becomes younger and has greater interests in shopping and dining — two strong drivers of reason to travel. The customers are often on short breaks are part of the intra-Asian explosion of travel, particularly from China, India and Indonesia.”
But the group does not have any plans to expand beyond Thailand. “After the listing we will look to realize the potential of our existing land bank in mature and emerging resort locations, as well as look for other opportunities in other destinations such Pattaya and Hua Hin where we see a lot of potential for our hotels,” Pramookpisitt added. “We have been in the market for 35 years and have a strong track record. We will plan to open five hotels in five years following our listing.”