It will open 16 new properties this year; buy buildings in UK, Europe, China
GROWTH will continue to be on the agenda for Frasers Hospitality even after it hits its target of managing more than 10,600 service apartments by end-2012.
The rate of expansion is likely to be as fast as that seen in the last few years – Frasers will open 16 new properties this year alone. ‘We think that we can continue this pace,’ said chief executive officer Choe Peng Sum.
Management contracts will contribute to a large part of the growth. But Frasers is also looking at purchasing its own properties in the UK, Europe and second tier cities in China where prices are still reasonable.
Mr Choe was speaking to BT before the official launch of Fraser Suites Seef Bahrain yesterday. The property has 91 service apartments and marks Frasers’ first foray into the Middle East.
Fraser Suites Seef Bahrain sits on the reclaimed area of Seef and offers residents a glimpse of Bahrain’s growth ambitions. The 19-storey building is linked to Seef Mall, one of the largest malls in the country with more than 300 retail outlets. Outside, a business district is in the making as office towers are being constructed.
Bahrain’s ‘forecast of an estimated 6.7 per cent growth in international arrivals this year, together with a sharp demand-supply imbalance in the hospitality sector, set the scene for a successful start to our expansion through the region’, Mr Choe said in a press release.
Frasers is looking for further growth worldwide – both in places where it already has a presence and in new markets.
Within the Middle East, it will launch another four properties in the next two years. Fraser Suites Dubai and Fraser Suites Doha will soft open in April and around August respectively. Another two in Oman and Saudi Arabia are under development and will take longer to be ready.
Frasers is also exploring more projects in Abu Dhabi, Kuwait and other parts of Saudi Arabia, Mr Choe said.
The second tier cities of China such as Ningbo and Hangzhou also present opportunities. ‘China will start to connect a lot of these cities with fast speed trains’ and there will no longer be a ‘distance issue’, he said.
Frasers has so far focused on growing its presence through the Fraser brand of service apartments, but the Modena line is set to get more attention. Frasers came up with the latter last year for a highly mobile and budget-conscious group of business travellers.
There is a big market for this group of travellers and the initial pace of growth for Modena properties could even be faster than that for the Fraser ones, Mr Choe said. Four Modena properties are set to open this year, of which one is in Tianjin next month and the other in Shanghai in May.
Source : Business Times – 25 Mar 2010