ROOM FOR GROWTH

Thailand 2017 | CULTURE & TOURISM | INTERVIEW

TBY talks to Sarun Limsawaddiwong, Managing Director of S Group, on the various hotels in the company's group, new trends in the industry, and his predictions for the group.

Sarun Limsawaddiwong
BIOGRAPHY
Sarun Limsawaddiwong has a bachelor’s degree from B.F.A. Centenary College in New Jersey and a master’s degree in design study from St. Martin, London. He has wide experience in the tourism sector.

Can you give an overview of S Group's background and hotel portfolio?

Our hotel business is a family business. I started the business eight years ago with the S15 Sukhumvit Hotel, and S Group now has five hotels. Our philosophy is to try and spread our risk over every market segment. We offer a range of different styles of accommodation and have hotel rooms priced from THB800 up to THB20,000 per night and room sizes ranging from 8sqm up to 400sqm. One philosophy that we have held is that each of our hotels has a different style, yet everyone who stays at an S Hotel can see certain characteristics in what we offer. The overall aesthetic is modern, clean, and affordable. Location is the most important factor and a crucial feature; we always choose locations next to BTS Skytrain and/or MRT stations in central Bangkok. We do look at potential new BTS lines and transportation expansion plans; having said that, we tend to concentrate on the Sukhumvit area because over the last eight years we have found that this is the most successful and popular location for our hotels. These are the main characteristics common to all our hotels. Yet, we offer variety in size, location, and facilities between our various hotels.

What are some of the latest trends in the hotel and tourism industry in Bangkok and Thailand in general?

Around 30 million tourists visited Thailand in 2015. Of that number, 60% came from East Asia and of that percentage 40% came from China. The growth in tourist numbers from East Asia and China continued in 1Q2016. We expect that over the next five years tourists coming here will be mostly from these areas. China has many different kinds of travelers, from budget and agency to elderly tourists and the luxury market. However, now most Chinese tourists come here on what are called “zero dollar" tours. With these tours, tourists are obliged to buy goods while they are here, such as jewelry, and in return their travel and accommodation is free. The tour agency pays for the trip and it takes a percentage of the money paid for goods by the tourists. These agencies manage to make money from this system. We work with the agencies that organize these trips. For example, we booked 200 rooms at our S Ratchada Leisure Hotel for one of these tours from China.

What is the future of S Group in five to 10 years?

There are two parts. The first issue is how we will serve the Chinese tourists coming here while the other side of the equation is waiting to see when tourists from other countries will start returning to Thailand. This includes tourists from Russia, Europe, and the US. We are also looking closely into the budget range; we have now positioned five hotels in this range because demand is increasing in the low-cost segment of the hotel market. This is where we will focus in the next few years. Within the next five years S Group aims to reach 1,000 rooms. At the moment, we have 560 rooms in total.

What are your expectations for 2016 in terms of occupancy rates and revenue?

Our total revenue in 2016 will not be lower than THB500 million. What I am concerned about is cost, and how in 2016-2017 we can increase our prices because this is a difficult thing to do YoY in the Thai market. Right now, I am not worried about the occupancy rates in our hotels; these are around 80-90%; however, I am worried about costs because hotel rates in Thailand are cheap, even cheaper than Myanmar, for example. Many investors want to enter the market in Myanmar now as demand is high there. Looking at the region, the most interesting location for us is Vietnam; however, it is a difficult country in terms of people and political factors.