Yuthachai Charanchitta, owner and CEO of Onyx Hospitality Group, is eager to grow his company, which will expand from 44 properties now to 54 by 2025. But he has chosen to take a calm and tailored approach to development to ensure only worthy partnerships are forged
You are soon to launch your second property in the Maldives, and I’ve heard it will be a hefty one. What other openings do you have in the near term?
The opening of Amari Raaya Maldives is a big event for us in 2023. It is our second property in the Maldives. With 187 villas, seven F&B outlets and more, it will be one of the biggest openings for us this year.
Over in Malaysia, we will have three Onyx brands in operation by the end of this year, making it the first country outside of home base Thailand to carry all our brands.
Through our partnership with SP Setia in Malaysia, we have soft-opened Amari SPICE Penang and Amari Kuala Lumpur. Three more are coming up – a Shama property in Johor Bahru, another Shama (Shama Medini Iskandar) in 2024, and OZO Medini Iskandar in 3Q2023.
Malaysia presents great opportunities for us, as we have strong investors in UMLand and SP Setia. We want to grow our portfolio with them.
We know how to do resorts very well, but our approach in Malaysia so far has been more urban hotels. As such, we are eyeing Kota Kinabalu and Langkawi, both resort destinations, for our next openings.
We are also opening Amari Colombo Sri Lanka in 2024.
How do you expect the pace of new signings and portfolio expansion to be this year, as confidence in travel and the industry intensifies?
We are under a very strict financial threshold now, after three, four years of Covid-19. We had to restructure our business and take a closer look at the partners we were working with.
So, now, we will take a careful, tailored approach to development. We are looking at four or five contracts a year for the next three years or so. This compares with 10 or more contracts a year pre-pandemic.
We want to grow sustainably. We are not looking to go to a buffet and grab everything that’s on the table; we like to be able to pick and choose what we prefer.
At this moment, I see us growing our foothold in Thailand, Malaysia and Laos. Laos is such a different destination, and so beautiful with great tourism potential. We now have a solid property in Amari Vang Vieng, north of Vientiane. Amari Vientiane is now under construction and will open 2Q2024. It will be a business events hotel with about 250 keys, ballrooms and meeting rooms.
Of these targeted four or five contracts, some of them will be conversions. We are leaning towards conversions, with the Shama brand being our focus. It is very easy to convert white label service apartments to branded ones.
We are very proud of Shama, which originated in Hong Kong. It is proven that the brand can bring in both premium long-stay guests and short-stay guests. Shama used to target long-stays only, so we competed with brands like Ascott and Somerset. Now, we make sure this is an adaptable brand.
Shama has three tiers – Shama Club, all studios, is more geared towards couples and young families with small children; Shama is generic, with units ranging from one- to four-bedrooms and keys ranging from 50 to 400 per property; and Shama Luxe is the next higher level.
Shama is also a practical product, as it does not carry many people on its payroll and can quickly justify return on investments for our owners.
We now have a person each in Hong Kong, China, Malaysia and Thailand taking care of Shama’s development.
In Bangkok alone, we have six Shama properties. We recently converted and upgraded Shama Sukhumvit 39 to Shama Luxe Sukhumvit Bangkok. It is our first Shama Luxe in the city, and it is located in the upscale Thonglor neighbourhood.
Next, we are looking to launch Shama Club in Hong Kong come 4Q2023.
We want to expand the Shama network, not just in Asia but also in Europe.
Why do you think Shama is getting more short-stay guests? Is the rise of multi-gen family travel a reason?
Travelling families used to look for hotels, but as they get bigger they tend to want full-serviced accommodation with two or three bedrooms.
I’m one of these families. I was recently in Japan for a ski trip with my family of five. We went with 10 suitcases. We needed space. Increasingly, when we travel, we look for full-serviced apartments with three bedrooms so everyone gets a proper bed to sleep on, not an extra bed.
Shama is simply a practical brand that resolves the pain points of travelling families today.
What other changing traveller habits or expectations are impacting your operations or the design of your products?
ESG (environmental, social, and corporate governance) is very much talked about and looked at these days by consumers and companies. We are a strong believer of responsible operations, and have systems in place for managing food waste, generating solar energy, and supporting local procurement.
Almost all our in-room amenities are procured locally, from coffee to soap. This not only supports local businesses, but also cuts import expenses and carbon footprint. We are looking to do more with a wider range of local suppliers.
As part of our ESG commitment, we also work with Pimali, a small hotel school in the north-eastern part of Thailand, to take in about 10 students every year as interns. These students then have an opportunity to stay on with us full-time.
The school teaches various aspects of the hotel business, from culinary to restaurant service.
We would love to take in more students from Pimali, perhaps 20 a year if that is possible. The school is a small outfit. We intend to also partner another vocational school in Chiang Mai.
My bigger hope is to set up a scholarship to support more young ones and bring them into our industry.
Onyx is ready to invest in such projects, and can be a leader in building talents. We can do more to demonstrate the abundant career opportunities in the hospitality industry and the attractiveness of the job. Doing this will also help resolve one of the common pain points of our industry, which is the lack of manpower.
Let’s talk a little more about your work with Pimali. How successful have you been in converting the interns to full-time staff?
We’ve converted 100 per cent of the interns we brought in since 2008.
These students are mostly orphans. Without exposure to the hotel business, many of them would have left school to work in factories or farms.
They all begin with work at our properties in Thailand, and some are eventually given opportunities for attachments abroad.
How do you expect travel demand to look for your properties this year?
Europe is still one of our strongest source markets, even though we had to focus on regional and domestic markets the past three years (due to travel disruptions).
In Thailand alone, arrivals from Europe have picked up so well. German bookings are up 33 per cent in 1Q2023 compared to the same period in 2019. Overall, European bookings are up 44 per cent.
So, our return to ITB Berlin 2023 was our chance to rebuild our visibility. We will be a lot more vocal about our brand and products elsewhere too.
German-speaking markets tend to favour Phuket and Samui, and it is interesting to see a growing movement in golf tourism among Europeans for other parts of Thailand, like Hua Hin and Pattaya.
We have seen a lot of Russian and CIS travellers flocking into Thailand over the last four months. I’m talking plane-loads of them, especially to the south. As such, our properties in Phuket and Samui have performed very well.
Besides Europe, we are balancing our mix of source markets. India is big for us too, and we continue to work Singapore, Malaysia and Indonesia markets for corporate bookings.
As air capacity returns and airfares come down, travel demand will go up. Overall, Onyx Hospitality Group’s properties, both owned and managed, are expected to generate US$260 million in revenue this year, signifying a 60 per cent increase from the previous year.
I don’t see airfares coming down by a lot yet, even though global capacity is inching closer to 2019 levels.
It will, just not this year. A lot of discounted airlines are ramping up operations across Asia, and that will result in competition among airlines. Improved air accessibility in the region, even through discounted airlines, is most critical for us as a hotel company with a strong Asian footprint.