FAST-rising Park Hotel Group has trumped a dozen international chains to clinch its first management contract for a four-star hotel in central-west Singapore. The hitherto owner-operator expects to sign three to four of such deals by year-end, citing strong interest from markets such as Singapore, Hong Kong, China and Indonesia.
The Singapore-based Park Hotel Group today inked an agreement with CEL-Alexandra, a wholly owned subsidiary of CEL Development. An arm of Singapore-listed Chip Eng Seng Corporation, this will be the construction and property company’s first hotel.
Slated to open in the first half of 2015, the proposed 450-room angled hotel tower will sit atop a six-storey podium and feature retail space. Located at the junction of Alexandra Road and Jalan Bukit Merah, room sizes will range from 21m2 to 42m2, while facilities include a club lounge, meeting rooms, a gym and a rooftop pool.
Speaking to TTG Asia e-Daily, Park Hotel Group CEO, Allen Law, explained that despite Park Hotel at Alexandra’s city fringe location, it presented an untapped opportunity to serve clientele in the west as there were currently few competitors nearby.
Currently with eight hotels in Singapore, Hong Kong, China and Japan, he anticipates that the group’s portfolio will swell to 20 by the end of next year.
Said Law: “We will continue to do direct investments but will grow faster in the area of management contracts. We’re always looking for the best locations within cities but these may be hard to come by. (Management contracts) cover locations we may not traditionally invest in due to risks we are not comfortable with.
“We want to grow the revenue coming from fee-based (management contracts) to a good 10 per cent of our total hotel revenue in the next three years.”
He added that the Group was looking for long-term relationships, preferring to “deal with the same partner for more projects than a different party for every project”.
When asked why he thought the Group managed to secure the hotly contested contract, Law attributed it to the chain’s Asian focus and its proven track record.
“We had Park Hotel Clarke Quay that we could showcase to the owner. It started as a greenfield project, won many awards for design and construction, and is now in its third year of operations…A lot of brands may be well known in a different location but not necessarily in Asia or even in Singapore.”
- Read more about the chain’s growth plans and its IPO ambition in View From The Top, TTG Asia September 7, 2012