Le Meridien on growth trend in AsiaPac


  • Business
  • Monday, 24 May 2004

BY ELAINE ANG

LONDON-BASED Le Meridien Hotels & Resorts is targeting to open between 20 and 25 hotels in the Asia-Pacific over the next five years, of which 10 were expected to be located in China, said vice-president for development (Asia-Pacific) Kieron Ritchard. 

“We have 28 hotels in the region now. In five years, we will almost double the portfolio size,” he told Starbiz in a telephone interview. 

Ritchard, who is based in Hong Kong, said the group had been on an expansion drive with particular focus on the Asia-Pacific in the last couple of years. 

“Due to some disruptions last year, we had to delay some of our plans. This year, some of the things that were delayed are starting to come to fruition together with the emergence of new opportunities,” he said. 

He said the group now had 25 properties under development worldwide, of which 12 were in the Asia-Pacific.  

Kieron Ritchard

“This underscores that Asia-Pacific is an important market for us. In addition, the region is now experiencing strong growth on the back of the disruption caused by the Severe Acute Respiratory Syndrome outbreak last year,” he said, adding that the next five years would be quite positive for Asia-Pacific. 

Ritchard said Le Meridien's strategy was to grow through partnerships with reputable hotel developers and owners looking for an established 5-star luxury brand. 

He said although the group owned some hotels, Le Meridien was predominantly a management company. 

“The strategy is to pick out a location where our marketing, distribution and services would add the most value to the owners,” he said, adding that some of the group's priority markets were Beijing, Seoul and Sydney. 

The group will manage the soon-to-be-opened 5-star Le Meridien Kuala Lumpur located at KL Sentral. The 35-storey hotel will have 422 rooms to cater to the upper-end market consisting of corporate and leisure customers as well as the international business community. 

The hotel, about 80% to completion, is expected to be opened in September.  

“Although the local market had been through a challenging period and had a few new hotels over the last few years, the opening of our hotel will coincide with the upswing in the tourism industry. 

“The timing is good and we expect strong response,” he said, adding that the group hoped to achieve occupancy rate in the high of 70% to 80%. 

Ritchard said the group was also pursuing opportunities in places like Fiji and the Maldives, particularly in the resorts sector. 

“We are especially keen to have a 'hub and spoke' scenario in Malaysia and later securing opportunities to set up resorts in Kota Kinabalu and Langkawi. 

“Therefore, it is important to get the city hotel established and completed,” he said, adding that Le Meridien was quite prominent in the resorts sector with properties in Phuket, Bora-Bora and Bali. 

Ritchard said the group's involvement in resort business in Malaysia would consist of newly built projects. “We expect it to be on management agreement basis where we will manage the resorts for the owners,” he said, adding that the lead-time for newly built projects was two years. 

He said the group was also placing a new emphasis on branding. 

Being the only global luxury hotel brand from Europe, Ritchard said Le Meridien differentiated itself by emphasising on its European heritage. 

“Another key aspect is that each of our hotels are unique with its own sense of individuality. We like to embrace local culture and theme to create different properties and yet have the consistent and recognisable service and style that Le Meridien is known for,” he said. 

According to Ritchard, the Asia-Pacific contributes 16% to 17% of group revenue but with the expected upswing in tourism industry regionally, this is expected to exceed 20% in the next three to five years. He said the outlook for the hotel sector, especially in the Asia-Pacific, was positive. 

“The economic growth in Asia-Pacific has been rapid with an increase in regional travel. Asia-Pacific also holds a mystique and appeal that is hard to rival,” he said. 

Ritchard said there would always be shocks hitting the tourism industry, which would impact the group's operations. However, the global hotel and tourism sector had become more resilient and was bouncing back much quicker than it used to be. 

Le Meridien hotel group posted global revenue of 900 million pounds. It has a current portfolio of more than 130 hotels in 56 countries and territories, with a choice of over 33,000 luxurious rooms in major cities and resorts throughout Europe, the Americas, Asia-Pacific, the Middle-East and Africa. 

In 2003 alone, Le Meridien opened 17 hotels. 

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