Sat, Apr 01, 2017 - Page 12 News List

Chailease slowing down as competition heats up

By Crystal Hsu  /  Staff reporter

Chailease Group (中租集團), which includes Chailease Holding Co (中租控股) and Grand Pacific Investment & Development Holding Co (中實控股), aims to slow down its expansion into the hospitality business after occupancy took a hit from the sharp decline in Chinese visitors last year and is unlikely to recover amid growing competition.

“It is not wise to expand when the field is growing increasingly crowded and inbound traveler numbers are stagnating or declining,” Grand Pacific chairman John Huang (黃炳彰) told a public event in Taipei.

The cautious approach contrasted with previous plans to add one or two outlets each year to its seven lodging and restaurant facilities in Taiwan and two more properties in the US and China.

Occupancy rates last year fell by an average of 10 percent at different locations while room rates weakened modestly, Huang said.

The situation might not improve in the near term due to price-cutting competition to win customers and more players are preparing to join the market, he added.

The decline is particularly evident in Grand Pacific’s Park City Hotel chain (成旅晶贊) in New Taipei City’s Tamsui District (淡水) and in Hualien County, as they depend heavily on group tourists from China.

Huang raised doubts over the government’s claim that the overall number of tourists increased mildly last year, saying the observation ran counter to tens of hotels being put up for sale across the nation.

The trend presents a tough challenge for expansion plans conceived a few years earlier and preparatory works are about to be completed, such as new hotels in Taipei’s Wanhua District (萬華) and New Taipei City’s Banciao District (板橋) by Caesar Park Hotels and Resorts (凱撒飯店), he said.

Instead, Grand Pacific plans to launch a presale residential project in Taipei’s Shipai (石牌) in the third quarter, Huang said.

The urban renewal project will feature small apartments with one or two bedrooms priced at NT$700,000 (US$23,075) per ping (3.3m2), he said.

The project, which took the company four years to remove obstacles to construction, is likely to be the firm’s first and last urban renewal attempt, as it prefers to stay away from time-consuming ventures, Huang said.

Meanwhile, Chailease Holding, the nation’s top leasing service provider, plans to expand and deepen its presence in ASEAN markets, including Thailand, Vietnam, Malaysia, Cambodia, Myanmar and Philippines, Chailease Group chairman Andre Koo (辜仲立) said.

The 40-year-old Chailease Holding plans a comeback in Indonesia later this year, Koo said, adding that the company plans to add 500 staffers to help carry out the expansion overseas.

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