La Midi Hotel Chitou (溪頭米堤飯店) in Nantou County is undertaking major changes in a bid to cut losses this year and turn a profit next year.
The flagship property of Rong Hsin Group (榮鑫集團), which also owns a high school, a rice mill and an asset management company among other businesses, in February tapped veteran hotelier Johnson Chiang (蔣祖雄) to steer the resort facility after his predecessor, Hong Wen-neng (洪文能), failed to turn the business around.
“I do not mind the hotel being unprofitable, but I cannot tolerate its reputation turning increasingly negative,” Rong Hsin president Lee Li-yu (李麗裕) told reporters on Friday.
Lee and his younger brother, Lee Li-sheng (李麗生), made a fortune by trading foreclosed properties, especially those hit by disasters, such as the Lincoln Mansions (林肯大郡) and the office complex of scandal-ridden Tuntex Group (東帝士集團) in New Taipei City’s Sijhih District (汐止).
They acquired Le Midi Chitou and Le Midi Jungli (中壢米堤飯店) from the foreclosure market, but decided to keep them to expand their business reach.
Lee said he had no choice but to shuffle top management positions at Le Midi Chitou to put the 243-guestroom hotel on the right track.
Chiang, who served at the Grand Hotel Taipei (圓山飯店), Sheraton Grand Taipei Hotel (台北喜來登大飯店), San Want Hotel (神旺大飯店) and Sunworld Dynasty Hotel (台北王朝大酒店), is crafting a strategy to make La Midi Chitou profitable, Lee said.
Toward that end, the French-style resort added a tea house and relaunched its Chinese restaurant over the weekend to demonstrate its commitment to transform and upgrade, he said.
Average occupancy rates were less than 50 percent last year and the average daily room rate was NT$3,500, Chiang said.
Chiang is seeking to lift occupancy rates to 75 percent this year with daily room rates of NT$3,800 to NT$4,000 following a series of changes.
“The benefits of the transition might not be evident until next year,” Chiang said, adding that the hotel’s operations have improved, but they still leave much to be desired.
Chiang declined to disclose to extent of the losses, only saying he would propose next year’s budget in October.
He has given priority to enhancing the hotel’s service quality, hygiene and space flows, as the Lee brothers are hesitant about injecting new capital, Chiang said.
Domestic travelers account for 80 percent of the hotel’s clientele, while guests from North and South Asia account for 15 percent, Chiang said, adding that incentive tours make up the remaining 5 percent.
“I believe Le Midi can attract more guests from home and abroad given its geographic closeness to the Chitou Forest Recreational Area (溪頭森林遊樂區), which makes it an ideal destination in the hot summer season,” Chiang said.
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