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Thailand’s Centara aims toward Top 100

Centara Hotels & Resorts, Bangkok, is ramping up expansion, but increasingly looking overseas. This spring, it plans to open Centara Mirage Resort, bringing 984 rooms and apartments to Mui Ne, a booming beach destination on Vietnam’s coast, 135 miles from Ho Chi Minh City. Centara is also bullish across Southeast Asia, with openings from Laos to Myanmar.

Contributed by Ron Gluckman

But Centara has bigger eyes, with plans to plant the Centara flag in eight hotels in seven countries in 2021. Another Mirage will add 607 rooms with waterpark to the new Deira Islands development in Dubai, building on Centara’s growth in the Gulf, where it already has properties in Qatar and Oman. Next comes a 449-key resort for Antalya in Turkey.

“We want to become a global 100 player,” said deputy CEO Markland Blaiklock, a Canadian with decades of Asian experience, who rejoined Centara in late 2017 with a mandate to pursue an aggressive growth strategy. Centara launched a five-year expansion plan the next year. “Our target was to double in size by 2022,” he said.

Rendering of Centara Mirage Beach Resort in Dubai
Rendering of Centara Mirage Beach Resort in Dubai

The pandemic has naturally slowed the pace. Thailand saw arrivals plummet from nearly 40 million overseas visitors annually to a few million. It became the second country to report a COVID case after China in January 2020, and soon after shut its borders, remaining largely closed to tourists. The government has extended some aid to the tourism sector, but companies like Centara depend on international visitors for up to 80% of its business. “That’s hard to replace domestically,” Blaiklock noted.

The company recently reopened its popular beachside property in Pattaya, but hotels in Phuket, popular with long-stay winter visitors from Europe and Russia, remain closed. “We’re probably around 50% open now in Thailand,” Blaiklock said. Phuket has been particularly impacted with properties shut for nearly a year.

“We will reopen all of our hotels,” he said, projecting that Thailand business could rebound in the third or fourth quarter this year. That assumes Thailand will reopen to at least some tourism from the region. Many parts of Asia have maintained low rates of COVID 19 and offer potential for a low-risk first step towards normalcy.

In late February, Thailand inaugurated a unique golf tour, allowing high-end quarantine along the greens. Thailand hoteliers have been stepping up lobbying, and a Phuket group is working on an innovative plan to independently vaccinate much of the island’s population. With its own international airport and isolated from the rest of Thailand, Phuket could operate within a trial tourism bubble.

“We’re still looking to double in size, just maybe not quite as fast as we would have otherwise.” – Markland Blaiklock
“We’re still looking to double in size, just maybe not quite as fast as we would have otherwise.” – Markland Blaiklock

Even amidst a pandemic, Blaiklock has piloted Centara on its planned growth path. “We’re still looking to double in size, just maybe not quite as fast as we would have otherwise,” he said. “When we started, we were doing about 9 billion baht (about US$300 million) in revenue per year. I figure we need to get to around 20,000 rooms.”

Presently, Centara has 17,161 rooms open or in development. “We’ll hit our target,” he said confidentially. “But not in 2022. Maybe 2025.”

Nikhom Jensiriratanakorn, director of the Thailand office of consultancy Horwath HTL, thinks such growth is achievable and Centara has a solid strategy. “They seem to have the right balance of growth. They have a strong base in Thailand, expanded in the region, and now are growing in the Middle East,” he said. “Looking overseas is logical. There is only so much growth possible in Thailand.”

Blaiklock said the focus is opening new properties, rather than mergers or acquisitions. “But we’re staying opportunistic, and looking at all possibilities.”

Centara launched in 1983, as Central Hotels & Resorts the hotel division of Central, the dominant retailer and one of Thailand’s biggest companies. Thailand was long the focus, and remained profitable, as tourism became one of the nation’s key industries, generating an estimated US$60 billion in annual revenues, pre-COVID.

Thai companies have been slower to expand overseas than many Asian rivals, but parent Central has paved the way with an aggressive overseas strategy, as its home market became more saturated. Central has expanded across the region, particularly in Vietnam and Indonesia, but also to several major European cities.

Blaiklock is pragmatic. “We’d like to be in Europe, if it made more sense,” he said. “But you really need mass to succeed, and that’s hard.” Growth is more focused on nearby Asian countries, the Gulf and Middle East.

Centara’s portfolio includes 83 hotels, 48 in Thailand and 39 overseas. Projects ran the gamut from city hotels and small resorts, to mega-projects, but increasingly development is trending toward bigger projects, and higher-yield, upscale resorts. And partnerships are becoming more important.

Centara’s Mirage Beach concept, a huge themed property packed with rooms, restaurants and amusements, was pioneered in Pattaya. Now, it’s being rolled out in mega-projects for Mui Ne and Dubai. For the latter, Centara linked up with UAE-based Nakheel, master developer of Dubai’s Palm Jumeirah, The World and Jumeirah Islands. Investment in the 600-room Mirage Beach is pegged at US$170 million; Centara will put in US$68 million, or 40%.

Centara also plans its Japanese debut in 2023 with Centara Grand Osaka, at a cost estimated at about US$333 million. It has partnered with Taisei Corp. and Kanden Realty & Development, but will keep a 51% stake in the 515-key 5-star property. Currently, Centara owns 30% of its properties, and 70% are managed.

Centara is also trending upscale with its new Reserve collection, beginning with the revamp of its Grand Beach Resort on Koh Samui island. The property has been transformed into a collection of 184 suites and villas, many with private pools. AvroKO, famed for its work at the Waldorf Astoria in Bangkok, 1 Hotel Central Park in New York and Temple House in Chengdu, oversaw the redesign.

“This is our first venture into this level of luxury,” Blaiklock said. Closed for two years, the property is set to reopen in May, and two more top-of-the line Reserves are in the works, he said. “Luxury will increasingly be our focus in the future.”

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