Search

×

Thai players make poshtel push in Southeast Asia

A new Thai company, Heritage Stay, aims to transform old heritage buildings in Southeast Asia into poshtels, while current market leader LubD (meaning ‘sleep well’ in Thai) is opening its first properties outside Thailand in Cambodia and the Philippines this year, aside from expanding further in the kingdom.

Heritage Stay is a joint venture between former LubD business development director Chittipan Srikasikorn and the Pattamasaevi family, who established Montara Hospitality Group, which developed and operates the renowned luxury resort Trisara Phuket in Thailand.

Lobby of a LubD hostel
Lobby of a LubD hostel

Heritage Stay’s first project is a conversion of one of Asia’s oldest movie theatres, Prince’s Cinema, in Bang Rak near the Shangri-La Hotel Bangkok, into a theatre-inspired poshtel with around 100 beds. There will be several accommodation types, including private suites and ladies rooms. The maximum number of beds per room will be eight and privacy will be provided in a way that fits the theme. For example, some rooms will use theatre curtains.

“We’re looking at the top-end of hostel offerings, targeting an average rate of 600 baht (US$17) to 700 baht per night per bed,” says Kittisak Pattamasaevi, son of Montara’s founder and its chief commercial officer. “We expect a high turnover due to the great location, the concept and our focus on key essentials such as security.”

Kittisak’s father has a penchant for old buildings and has conserved several of them in his hometown Lampang into a library, exhibition centre and art centre.

Prince's cinema being converted to Heritage Stay to a hostel
Prince’s cinema being converted to Heritage Stay to a hostel

Chittipan, who is managing director of Heritage Stay, says the company is looking to acquire or lease not just heritage buildings in Thailand but throughout Southeast Asia. His mission is “to do good and take care of local cultures and communities.” Chittipan says a Heritage Stay property has five pillars: Sustainable, Social, Siamese (service), Stylish and Smart.

“The LubD brand has a sense of fun, is social and vibrant. Heritage Stay will be more focused on local authentic experiences,” Chittipan says. “We will have tons of stories about the property and destination, and more social engagement. We want to be a smart host as we know travellers today don’t travel only for fun.”

Heritage Stay: 1,000 beds by 2019

The incumbent player LubD, meanwhile, is opening a 222-bed LubD in Siem Reap, Cambodia, in August, and a 232-bed LubD in Makati, Philippines, in November.

The brand is part of the Narai Hotel Group and has three hostels in operation in Thailand – two in Bangkok and one in Phuket with a combined more than 500 beds.

“We expect to open new LubD’s in Thailand in Chiang Mai and Koh Samui in 2018, and hope to make announcements soon for new sites in Vietnam and Philippines soon,” says Simon Morley, who has taken on the additional role of COO of LubD due to its rapid expansion on top of his role as Narai’s vice president of asset management. “LubD is all about driving amazing experiences with cutting edge products in the hostel market, and with our recent success in Patong (Phuket), we have proven that our travelers love LubD.”

Pool scene at LudB
Pool scene at LudB

Morley welcomes Heritage Stay to the hostel scene, saying “it is not often you see conversions like this (Prince’s Cinema) due to stringent regulations on licensing.” Having the right product is essential, says Morley, as the market is “extremely crowded” in Bangkok. “We see new hostels come and go,” he says.

“LubD has been in Bangkok for over nine years now, and we continue to thrive in the market because we offer our travelers an environment that is safe, comfortable and allows them to be in the better locations in Bangkok,” Morley says. “We focus on driving experiences with daily activities and offer an international tour desk through STA to support their explorations in Thailand and Southeast Asia.”

Southeast Asia’s hostel market saw a 42% spike last year over 2015 to 51,795 beds in 1,201 properties across the region, according to a study done by Phuket-based consultancy C9 Hotelworks. Thailand has by far the most number of beds – over 21,000.

Indonesia, however, led the supply growth in 2016 with a 73% increase to over 4,000 beds, followed by Thailand (55%) and Vietnam (51% to over 5,000 beds).

The increase in supply impacted average rate, which stood at US$9 per bed. Singapore hostels raked in the highest average rate in the region, US$20 per bed. C9 Hotelworks CEO Bill Barnett believes private equity groups are now actively looking into the sector in Southeast Asia and brands such as LubD are looking at the big picture in the long term and building international scale to partner them. “The key is LubD has the proof of concept, which is what investors will look at,” Barnett says.

Comment