Mon, Jul 17, 2017 - Page 16 News List

INTERVIEW: Tourism downturn a good time to invest, Lealea says

Lealea Group, which owns 58 companies, in October last year tapped former Farglory Group spokesperson Tsai Chung-i to steer its hospitality arm, Lealea Hotels and Resorts Co. In an interview with ‘Taipei Times’ staff reporter Crystal Hsu in Taipei on Friday, Tsai detailed how he aims to weather the industry’s challenges and expand the hotel chain in the coming years

Lealea Hotels & Resorts Corp chairman Tsai Chung-i is pictured during an interview in his office in Taipei on Friday.

Photo: Crystal Hsu, Taipei Times

Taipei Times: Why did you leave Farglory Group (遠雄集團) to head Lealea Hotels and Resorts Co (力麗觀光)?

Tsai Chung-i (蔡宗易): Lealea Group (力麗集團) was my employer for 16 years before I joined Farglory. Kuo Ching-chuan (郭銓慶), chairman of Lealea Charity Foundation (力麗慈善基金會) and the eldest son of the group’s founder, Kuo Mu-sheng (郭木生), invited me to help integrate resources and boost synergy efficiency. After months of consideration, I decided to come on board, but promised Farglory to help with the Taipei Dome negotiations whenever it needs me.

Lealea Group used to consist of three main businesses, in synthetic textiles, real-estate construction and trading. Today, it owns 58 companies across nine sectors.

Lealea Hotels and Resorts, which owns 11 properties operated under different brands, is a relatively new and small business interest of the group. However, it is in need of transformation in the face of competition, while the market looks to shrink due to a sharp decline in Chinese tourists.

TT: After 10 months at its helm, what is your plan for Lealea Hotels and Resorts?

Tsai: The hotel chain will seek to expand its scale by adding four more properties and raising its total number of guestrooms from the 767 to 1,500 in the next three years. The figure does not take into account the newly opened Westin Yilan Resort (宜蘭力麗威斯汀度假酒店), a build-operate-transfer project with the local government.

Most Lealea properties have been three and four-star facilities that serve customers with midrange travel budgets. We now aim to reach out to high-end and budget travelers as well, building a balanced and diversified portfolio, and more resilience to industry headwinds.

That is why we are partnering with Marriott International Inc and are running the Yilan property under the Westin Resort brand, making it the first international five-star resort in the county. In May, we launched 9ine Hotel (久居棧) in Kaohsiung, a budget property aimed at young backpackers. It is safer not to put all eggs in one basket. Daily room rates at our properties now range from NT$1,000 to NT$16,000.

TT: Why is Lealea pressing ahead with expansion plans when the market is expected to take a downturn this year and beyond?

Tsai: There is always need for business and leisure travel, in good or bad times. Taiwan is blessed with tourist attractions. It is surrounded by ocean and has 200 mountains more than 3,000m above sea level.

We have confidence in the hospitality industry and seek to outcompete peers. It is challenging, but not impossible. Difficult times make acquisitions and expansion cheaper, and we intend to take advantage of that.

We are building two more properties near Yilan’s Wushih Harbor (烏石港), one of which is a five-star facility likely to be run by another international hotel chain. We plan to buy 10 yachts to carry guests between the harbor and Japan’s Ryukyu Islands, an unprecedented service that should make the property very exciting and attractive.

We intend to build a new property near Sun Moon Lake (日月潭) in Nantou County, where we already have three outlets and believe there is still room for more guestrooms. Domestic travelers have generally filled the void left by Chinese tourists in the mountainous counties.

The fourth new property will be in Kaohsiung, where room rates are low compared with elsewhere due to cutthroat competition.

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