Commercial property developer UHG will invest 1 billion baht to expand with two new mid-tier hotels on Sukhumvit Soi 8 and Pradipat Road, banking on robust tourism demand in this segment, which has boosted revenue growth post-pandemic.
Managing director Wutthiphon Taworntawat said both hotels will target free independent travellers (FITs) seeking affordable accommodation near major mass transit lines with a local touch.
"The Sukhumvit site is located near the Nana BTS station -- a prime location and one of the most visited areas by foreign tourists," he said. "The other will cater to both FITs looking to explore street food in the Chatuchak and Ari areas, as well as local customers, due to its proximity to several government agencies."
The site on Sukhumvit Soi 8, covering more than two rai formerly occupied by Wannawit School, was rented for a period of 30 years from the school's owners late last year, after the closure of the 75-year-old school in 2022.
UHG will invest 800 million baht in rent and construction to develop The Quarter Nana, an eight-storey hotel with 300 rooms. Room rates will run from 2,500-3,000 baht per night.
Construction is expected to be completed by 2027, with the break-even point projected in seven years.
Earlier this year, it signed a 30-year lease for Karnmanee Hotel on Pradipat Road, which will be renovated into The Quarter Saphankwai, a hotel with 208 rooms.
The renovation and rent will cost 200 million baht and the hotel will open in November this year.
In the first half of 2024, UHG recorded 1.2 billion baht in revenue, a 50% increase from 800 million baht in the same period last year.
Key drivers included improved revenue from existing hotels and new revenue from the recently opened projects.
It aims to have 2.5 billion baht in revenue by the end of the year, which would grow 40% from 1.8 billion baht in 2023.
Today, UHG opens a new hotel, The Quarter Ratchayothin, featuring 190 rooms at a rate of 3,000 baht per night.
Located near Ratchayothin Intersection, the hotel targets corporate clients, especially those with offices at SCB Plaza.
The hotel is part of Ratchayothin Hills, a mixed-use development that also includes 12,000 square metres of office space and 1,500 sq m of retail area.
The office space is currently 20% occupied, with rental rates of 850 baht per sq m per month.
The retail area, which is 80% occupied, offers rental rates ranging from 800 to 1,800 baht per sq m per month.
"Mixed-use developments help minimise risks," he said. "From the bank's perspective, any revenue, whether large or small, is valuable. If the tourism business is impacted and performs poorly, we can still cover utilities with the office rent."
