CITY Developments Ltd (CDL) has opened the 421-room Millennium Resort Patong Phuket after pumping in 4.3 billion baht (S$175 million) to create its first resort hotel and retail complex in East Asia.
CDL says that the hotel and retail complex is the first to be opened by an international hotel group in Phuket since the tsunami struck in December 2004.
A 95 per cent stake of the site was acquired through the private property fund Real Estate Capital Asia Partners in early 2006 for about 2 billion baht. CDL has close to a 50 per cent stake in the fund.
It is understood that the structure of a new complex already existed on the site before the previous owners decided to sell it.
The Phuket hotel will be the fourth that CDL’s hotel arm, Millennium & Copthorne Hotels (M&C) has opened in Asia this year.
Two more hotels in China - Millennium Wuxi and Millennium Chengdu - will open around the end of the year, following those already opened in Beijing, Xiamen and Qingdao. A hotel in Chennai, India is expected to open in 2009.
M&C CEO Richard Hartman added: ‘We believe that our strategy of expanding our hotel portfolio in Asia in 2008 and beyond is the right one, as demand for hotel accommodation is strong and is expected to rise.’
Mr Hartman is a veteran in the industry and was with the InterContinental Hotels Group and ITT Sheraton North American before joining M&C in April.
Saying that CDL and his objectives closely match, he added: ‘I wanted to get back into a company that was real estate focused. I didn’t want to work for a company that was just managing brands.’
CDL and M&C’s way of doing business is helping it get a foothold in new markets like China and India, where big global hotel chains have already made significant headway.
‘A lot of (hotel property) owners find us more friendly, and more flexible,’ he said, adding that many big hotel chains will not stray from brand templates, even if owners protest.
Another aspect of CDL’s hospitality business that is likely to grow is its real estate investment trust (Reit) arm, CDL Hospitality Trust.
Having just joined, Mr Hartman said he could not say which properties were likely to go into the Reit next, but he did say that it was ‘advantageous to add more properties in the Reit’.
CDL does have an upcoming Singapore hotel at Mohamed Sultan Road that could eventually be added to the Reit but more new Singapore properties are unlikely for now. Mr Hartman said that it is currently not looking at any of the hotel development sites that are being offered under the Government Land Sales Programme.
M&C is Singapore’s largest hotel group with a portfolio of more than 110 hotels in 18 countries with nearly 35,000 rooms.
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