Marriott to double local hotel count
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Marriott to double local hotel count

Faith in resilience is key, writes William Hicks

Marriott International plans to dramatically increase its presence in Thailand, expanding hotels and resorts by about 50% in 3-4 years, unconcerned by political instability or an economic slowdown.

Mr Menon predicts 125 million people will be crossing borders in Asean.

The company operates 44 hotels under 14 brands in Thailand, of which almost half are resorts. The hotel brands under construction are Moxy, Fairfield by Marriott and Delta by Marriott.

Over half of the new properties will be resorts thanks to the growing leisure market in Asia and increase in Chinese tourists, who make up almost a quarter of Marriott's business in Thailand and prioritise leisure travel.

Marriott hopes to have 1,000 hotels in Asia-Pacific by 2020, up from 710 in operation.

"We don't really see it as an acceleration from our perspective," said Rajeev Menon, chief operating officer of Marriott International Asia-Pacific. "Marriott acquired Starwood Hotels in 2016, which had a larger presence than us in Asia at the time, and as we came together we have had a very healthy pipeline of new hotels in Asia."

Mr Menon said this expansion in Thailand and Asia-Pacific more broadly is due to the huge boom in inter-Asia travel, driven by a rising Asian middle class. He predicts "it will not be long" until 125 million people a year are crossing borders in Asean, further accelerated by the proliferation of low-cost regional flights.

This growing middle class prosperity is evident in the hotel business, where many of their major hotels are seeing 20-30% Thai guests, where 10 years ago Thais barely showed up as a market segment.

But this ramp-up in Thailand does not come without risks. From a global economic slowdown that could turn into a recession to political uncertainty turning into instability, the hotels industry is exposed to these global and domestic trends.

"It's not as if we don't see blips when there's a coup or other challenges in the business environment," Mr Menon said. "We've seen business slow down dramatically, but the incredible thing about Thailand is it always bounces back quickly. As long as we have political stability and economic stability, people want to keep coming back."

Another growing concern is home-sharing businesses like Airbnb cutting into the market share of traditional hotels. Despite being illegal in Thailand to offer short-term stays without a hotel licence, Airbnb continues to operate in the country with hundreds of listings available in major tourist areas.

He said Marriott is responding to the digital disruption by piloting their own "curated" home-sharing service in Europe, a service they hope to one day expand globally. Marriott is also experimenting with automating certain services such as checking in and checking out at lower-cost hotels, but prefer to keep the "human touch" at the higher end.

"We are not concerned about our medium to long-term growth perspective," Mr Menon said. "Asia has had the fastest growing tourism sector in the world year after year, and I don't see that changing."

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