Hotel Revolution Gathers Pace as Accor and Thailand's Erawan Group Announce 10 New Ibis Hotels


Accor and Thailand's Erawan Group PLC have signed a memorandum of understanding to develop a network of up to 10 Ibis economy hotels in six major destinations including Bangkok, Pattaya, Phuket, Koh Samui, Chiang Mai and Krabi.

The move is intended to tap a forecasted surge in budget and business travel to Thailand, particularly from China and India. The agreement calls for 6 Ibis hotels to be opened by 2008 and up to a further 4 hotels by 2010. Each property will have around 200-250 rooms and will cost between US$7.8 to US$10.4 million.

Accor is one of the world's leading mid-range and economy segment hotel operators. It is the fastest growing hotel group in the Asia Pacific region and already has 23 hotels in Thailand, with 13 more scheduled for opening in the next two years (not including the new Erawan alliance hotels). The Ibis brand, owned by Accor, is the world's most popular economy hotel brand, with over 720 hotels globally.

Mr Kasama Punyagupta, Chief Executive Officer of Erawan, said: "The economy segment in Thailand represents a large and untapped market for international brands. Accor is the ideal partner to develop this market with us - and Ibis the appropriate brand. We aim to position The Erawan Group to profit from the momentous growth in budget travelers to Thailand in the years and decades to come. Standard quality, simplicity and value-for-money will be the main characteristics of the new properties. The starting rate will be less than US$30 per night."

According to Accor Asia Pacific Managing Director Michael Issenberg, the time was right to expand the Ibis brand around Thailand.

"We are very bullish on the future of Thailand's tourism industry, particularly in key destinations where we are going to open Ibis hotels with The Erawan Group.

"Most new hotels under construction in Thailand will cater to the top-end of the market but very few cater for the fastest growing market - the economy sector. The Ibis brand will fill a clear market need as Thailand's domestic and regional market grows, especially with the rapid increase in low-cost air carriers in the region.

"The announcement comes at a time when Ibis is experiencing its fastest-ever expansion in the Asia Pacific region. We launched Ibis in Bangkok earlier this year, the brand is rapidly expanding in Korea and Indonesia. In China we will open our third hotel, Ibis Qingdao, next month with plans for 10 a year by 2007, and in India there are plans for a network of over 20 Ibis hotels around the country," Mr Issenberg, said.

Mr Kasama explained that The Erawan Group's strategy was designed to create sustainable growth in shareholder value in the coming years.

"While remaining focused on Thailand, the objective will be to diversify both geographically and in terms of market segment. By 2008 we aim to be a true 'proxy' of the Thai hospitality sector with a portfolio of around 12 hotels across the spectrum from economy to 5-star deluxe - and in all key travel destinations in Thailand.

"Apart from the forecast growth in budget travel, two additional ingredients will be vital for the success of our strategy. The first is that we will be partnered with 3 of the world's top 10 hotel operators, plus one up-and-coming regional brand. The second - and probably the most important of all - is the magnetic appeal of Thailand itself - its culture, sites and the world renowned hospitality of Thai people.

Tourism Authority of Thailand is a CAPA Member. For more information on the Centre for Asia Pacific Aviation's membership service, please click the icon below.


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