Jan. 26, 2016


Chris Bailey

Thailand

Chris Bailey

COO, Central Hospitality International (CHI)

"The AEC opens its doors at the beginning of 2016; however, it will take a little bit of time to see any meaningful impact."

BIO

With a career spanning more than 30 years within the tourism industry, Chris Bailey’s experience covers several key aspects shaping the Thailand and international tourism industry and future growth prospects. He joined the company in 2004 and has occupied a number of key positions, currently serving as COO of Central Hospitality International (CHI).

What assets does Central Hospitality International (CHI) typically hold, and how successful has the strategy been?

We have 40 hotels in our portfolio; 15 are our own and 25 are managed hotels. In the next couple of years, we will add another 26 hotels, which are currently in the pipeline and will take the total to 66. If you look at the current portfolio, about 75% of our portfolio is in leisure resorts and 25% are set in city locations. When we look at the city product, most of our properties have large meeting and/or convention spaces. We are predominately in that kind of corporate, MICE market in the city hotels, and then our leisure portfolio is typically resorts. We are multi-branded with brands starting from our five-star product all the way through to a newer lifestyle brand. Going forward, we will look to diversify more out of Thailand because we are heavy in terms of our asset here. This will give us more balance in our destinations, which is critical in an industry that is quite cyclical, such as tourism and hospitality. We will continue to invest ourselves and manage additional properties in Thailand as we still see the value of Thailand for growing our business.

Speaking of the region, CHI currently manages properties in Vietnam and Indonesia as well. With the ASEAN Economic Community (AEC) coming into affect this year, what long-term impact do you think this could have on your strategy?

The AEC opens its doors at the beginning of 2016; however, it will take a little bit of time to see any meaningful impact. We have already begun to work on our strategy as it relates to AEC. Aside from the properties we have in Vietnam and Indonesia, we are actively looking for products in the rest of the region. One of the first things we did to cement our position by opening sales offices in each of the AEC markets that we did not previously have. Our sales structure now includes several other locations such as Singapore, Malaysia, Vietnam, Philippines, and Indonesia, which serve all of our current products. It was the most important thing to ensure we started to expand the awareness of the brand immediately, because that becomes a more critical path as we become an easier, more accessible market, or a single market similar to Europe. We are part of a larger group, the Central Group of companies, which has expanded quite significantly in Vietnam, and we feel that the hospitality division should be there, too. We have also been actively searching through Myanmar and Cambodia for the right products, and we look regularly in Singapore and Malaysia, but have not yet found the right opportunities. We will continue to drive our growth in Indonesia, expanding on what we already have, and we would like to see a foothold in the Philippines; having said that, we currently have a property under construction in Laos.

News broke recently of CHI's planned joint venture with Nakheel from Dubai. Could you tell us more about this project?

This move is part of our portfolio expansion, meaning that we have balanced our risk with other destinations outside of Southeast Asia. We identified some time ago key areas that we felt our current customer base would appreciate, and gave us a great opportunity to apply what we do extremely well, leisure holidays. This is an opportunity to open in new destinations and not have to reinvent ourselves as a business, particularly when it comes to finding a customer. The UAE, in general, has a similar customer profile and source market to properties in Thailand, as did the Indian Ocean when we went there, in the Maldives and Sri Lanka. In terms of the project in Dubai, it is on the beachfront on the new Deira Island; one of the new man-made islands, competing with the Palm closer to the city center. The logistics are great, and it is designed to be a more value driven island; therefore, it is going after more of the four-star customers—that is where the growth potential is forged. Holidaymakers want beaches. If you look at the logistics of getting into Dubai, about 1 billion people live within a six-hour flight. Within that segment, there is a huge middle class and trends suggest that the family market is going to be one of the most significant drivers of our industry in the years to come. For us, it was a no brainer; we are going after a four/four-and-a-half-star and family resort, which is well-known in this part of the world. It is a strategic move for CHI to run a joint venture in order to stay in the Middle East market.

What are your expectations for the year ahead?

We will see similar source market business volumes. The number of Chinese visitors will continue to grow and other source markets will stagnate, or maybe even decline. I see that the booking trends continue to change, even for long-distance travel where people have become more comfortable to book at the last minute. We see our booking profile change significantly, and we need to adapt to that and continue to adapt to ensure that our inventory is available and our distribution is there. This particular market in Thailand is fast moving. The inventory continues to grow YoY, and you think that no more hotels can be built; yet, new ones come along and you have to react to that.

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