With the middle class in Asia and mass tourism growing, international hospitality chain Hilton is aiming to expand its affordable upscale brand to the region, including Thailand, as one of its fastest growing portfolios.
Asia's growing middle class is set to create an opportunity worth over US$10 trillion in terms of consumption growth over the next decade, creating optimism for business growth, said Guy Phillips, Hilton's senior vice-president for development -- Asia-Pacific excluding Greater China.
Mr Phillips said there are also opportunities for hotels to target younger guests, especially millennials who will represent about a half of all tourists by 2025. They tend to travel more frequently and seek an affordable price point.
Therefore, Hilton aims to expand the presence of its four-star brand -- Hilton Garden Inn in Asia. About 75 properties under this brand are operated in the region, and another 130 are in the pipeline.
At present, the company has one Hilton Garden Inn property in Phuket, and it will open four more in Thailand within coming years.
He said this brand has a starting rate of around 2,500 baht per night and this could increase to 4,500 baht per night in prime destinations such as Bangkok.
Phillips: Targeting young generations
For owners, the overall cost of construction is less and these properties take less time to build compared with five-star hotels. Each property would take around 24 months to build, costing around 3 million baht per room.
In the region, one of the company's latest properties is Hilton Garden Inn Da Nang in Vietnam, which opened in May.
The 234-room property is located on My Khe beach. It includes a rooftop bar and pool.
Nick Boyd, general manager of Hilton Garden Inn Da Nang, said the middle class segment is growing exponentially in Vietnam and Southeast Asia in general. Their disposable income could be generated to hotels that meet the demands of this group.
Although more players are growing their presence in Da Nang, the property still posted a healthy occupancy rate due to strong demand.
As the city is well-known as a coastal destination and has gained a strong domestic market, the property found that half of its guests in July were domestic tourists. This portion grew to 70% during the public holiday week.
South Koreans also emerged as one of the leading groups of international guests staying at the property.
Amid inflation in this region and the uncertainty of the global economy, Mr Boyd said the hotel has to monitor the impact on travellers' spending power.
However, Mr Phillips said the company remains upbeat regarding growth in Asia-Pacific. Many markets in the region are expected to see a full tourism recovery in terms of international arrivals by next year.
He said about one quarter of hotel rooms under construction in the region are under Hilton's brands.
In the second quarter, revenue per available room and the booking pace in the region already exceeded 2019's level, while Thailand, Greater China and Japan were among the best performing markets.
