BTN's annual answer book for business travel managers.
Lebua Hotels and Resorts, a luxury five-property
Asian chain that began as a single Bangkok restaurant, has set its sights on
global expansion, a drive boosted earlier this year by a management contract it
secured with three boutique hotels in India. The hotels in India upped Lebua's prominence
in the corporate travel space, with which it already had been working to grow
in Bangkok. Lebua CEO Deepak Ohri this month spoke with Business Travel News
lodging editor Michael B. Baker about his company's expansion plans and its
strategy in attracting corporate business.
What is your growth plan?
We had our flagship property in Bangkok. Then we opened a private lodge in New Zealand, which we have taken off the global distribution system because it's become private and quite famous. Recently, we started our expansion drive in India. We took over one of the old palaces [in Udaipur], called Devi Garh by Lebua, and we have taken two resorts in Jaipur. Right now, we are in the expansion phase and are looking at adding a few hotels in China and at a joint-venture alliance with a European company for hotel management in Europe.
What's the outlook for luxury hotels in your target regions?
Hotels, when you look at the numbers and the investment, they're still making money. The trick is that you need to choose in which countries you want to go. In Asia, the highest RevPAR right now is in Singapore and has been for the last two years. But if you notice the growth in our corporate business, the average room rate has declined in Singapore, so we are looking at the Southeast Asia region—Myanmar, Cambodia and Vietnam—because these are the places with huge potential to grow if you understand the market. With Myanmar, after President Obama visited, it opened up.
How has Lebua performed specifically?
This year, we have a seen a 19 percent increase in revenue per available room. In India, we are doing well despite India showing a 16 percent decline, as we are showing 22 percent upward growth, so that speaks well of our consumer base. Since they're middle affluent class, they work hard and want to play hard.
How does corporate travel fit into your strategy?
We are trying to be a for certain select clientele, which is mainly the middle affluent class. We work with the travel management companies, but when we work with them, we let them go to the corporates. We find that to be easier instead of working with 1,000 corporates. Plus, we are on the GDS. Our location in Bangkok started at 85 percent leisure and 15 percent corporate. Now it's 40 percent corporate and 60 percent leisure. So, we have grown 25 percentage points in our corporate business in six years. In India, all our properties for eight months are a corporate business. The other four months are holidays for the corporates, so they come as business. We don't do too much with groups in Bangkok, but in India, one of our properties is a lodge that's usually booked out by the top corporates. We do a lot of [meetings] and groups at our properties in India: very high-level corporate business.
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