[Thailand's] Nakorn plans to invest $30mln in hotel in Phnom Penh

Last Updated on 18 February 2013 
Phnom Penh Post

By Low Wei Xiang

Building of Sofitel hotel, this company will invest more on 3 and 4 star hotel in Phnom Penh. Photograph: Hong Menea/Phnom Penh Post

Pharmaceutical giant Thai Nakorn Patana plans to invest $30 million over the next two years in a three- to four-star hotel in Phnom Penh, as it hopes to cash in on the lack of big names in the capital’s mid-tier hotels market.

For the new 200-room hotel, the company hoped to partner French hotel group Accor’s Novotel brand, Thai Nakorn Patana representative Charles-Henri Chevet said.

Thai Nakorn Patana would remain the main shareholder and investor, Chevet said.

Currently, the company’s two five-star Sofitel hotels in Cambodia are run with Accor, which also owns the Sofitel brand.

Phnom Penh currently had no international brands in the three- to four-star hotel sector, Chevet, who is Phnom Penh Sofitel’s general manager, said.

“Thai Nakorn Patana will have to pay a fee [to Accor] to bring in an international brand,” he said.

“But clients will recognise the brand as a guarantee of comfort and good management, and will use the hotel, [which will also boast] state-of-the-art meeting rooms.”

Chevet believes that “immediate opportunities” in Phnom Penh lie in the mid-tier hotel sector, because the market for five-star hotels is not yet mature.

Thai Nakorn Patana’s deputy managing director, Supachai Verapuchong, said Phnom Penh was an ideal investment location because there would be “sustained business”.

In tourist destinations such as Siem Reap, demand tended to be seasonal, he said.

One reason local hotel owners might be hesitant to tie up with big names could be the costs involved in doing so, an industry leader said.

“For the past five to 10 years, a lot of international hotel brands have been wanting to come into Cambodia,” Cambodia Hotel Association president Luu Meng said.

But hotel owners here aiming for tie-ups had to pay fees for issues relating to management and branding, which might erode their revenues by five to 12 per cent, he said.

Boasting a big name was not everything for a hotel, however, Meng said. “Ultimately, a bigger brand name doesn’t mean anything if the hotel’s service isn’t good.”

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To contact the reporter on this story: Low Wei Xiang at lowweixiang@live.com