Overseas Union Enterprise Ltd’s hospitality division, Meritus Hotels & Resorts (MHR), is planning to boost its hotel management segment by aggressively expanding its portfolio over the next five years.
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“We’re trying to grow the brand. We’ve just signed a hotel in Frankfurt. We should have about 15 in China in the next five years,” said Mr. Michael Sengol, CEO of MHR. “There are people from India interested in talking to us. We’re not closing any doors.”
By next year, MHR anticipates to see revenue from hotel management fees increase by 35 percent year-on-year, as it strengthens its hotel management business together with its joint venture partner from Beijing.
MHR currently operates six hotels – the flagship Mandarin Orchard and Marina Mandarin in Singapore, as well as three hotels in China and one in Langkawi, Malaysia.
As part of its plan to enhance its portfolio in China, MHR has set its focus on primary cities like Shanghai, Beijing, and Guangzhou, and Hainan Island, although the secondary cities are easy to come by.
“But in China, what’s a secondary city today becomes a main city tomorrow,” quipped Mr. Sengol.
The hotel industry is picking up sharply as tourism demand comes flooding back.
The Mandarin Orchard, which had recently undergone significant upgrading works, is already recording fairly healthy numbers. Revenue per available room (revpar) rose 45 percent year-on-year two months ago, while revpar climbed 55 percent in April, partly due to events like Food&HotelAsia 2010, and the backlog of passengers from the disruption of air traffic to Europe.
Mr. Sengol remains positive that the hotel industry in Singapore will go up, despite the two integrated resorts collectively adding more than 4,000 rooms to the industry when they are fully functional.
“Marina Bay Sands is going to add to the meetings, incentives, conventions & exhibitions (MICE) market (in Singapore). It’s going to take away a lot of the MICE market from Hong Kong,” he said.
At the same time, Mr. Sengol feels that in terms of pricing, hotels in the country are still behind other major markets.
“In Hong Kong, you can’t get a room in a four star hotel for S$400. Singapore is underpriced compared to all the main cities. Hotels can do a lot more,” he added.