Kenting resorts going upscale

A new era of hotel competition started on the southern tip of Taiwan this summer, as three large companies began pumping funds into new projects in order to gain bigger share of the recreation business in Kenting (墾丁).

The projects started when 20-year-old Caesar Park Hotel Kenting (墾丁凱撒) concluded the first round of its large-scale renovation in late May. The newly remodeled facilities target a more sophisticated clientele.

Leofoo Development Co (六福開發), which runs The Westin Taipei and the Leofoo Village (六福村) amusement park, decided to extend its operations to the south and launched a "soft" opening for its new Leofoo Resort in late June.

Chateau Beach Resort Kenting (墾丁夏都), which runs two hotels along Dawan Beach (大灣), is preparing to open its third hotel in the second half of the year, and has plans for a fourth.

The motivating factor behind the large investment projects is the perception that there is an unsatisfied demand for recreational facilities in Kenting.

"Kenting's tourism has been booming so much that even with our offering of nearly 100 rooms in the new project, we still only occupy a tiny bit of the market," said Tu Cheng-chung (涂振中), vice general manager of Chateau.

Kenting's popularity continues to grow -- 3.2 million tourists visited Kenting National Park in 1999, and the number surged 56.25 percent to 5 million last year, according to government statistics.

Most local operators believe the figure will keep growing.

"The only problem here is that no rooms are available in peak seasons. As long as there's a place to sleep, more people would come," Tu said while waving his hands about to indicate Kenting's hustle and bustle.

Boasting a 2km-long exclusive beach as its main attraction, Chateau has spent NT$480 million (US$14.6 million) to build the Positano, its new Caribbean-themed hotel. The Positano stands next to the company's Mediterranean-themed Provence and the Spanish-themed Marbella hotels. The Positano will boost the number of Chateau's hotel rooms to 293, Tu said.

After completing its NT$500 million remodeling, Caesar Park boasts 280 rooms. The market veteran made the investment in order to maintain market share and generate more profits.

"Setting aside the new rivalry from Leofoo Resort and Chateau, Kenting's guest houses and independent hotels have already offered 4,000 rooms in total. As the popular market has been nibbled up, it's essential to set a new direction, instead of becoming mired in price wars that hurt the company's bottom line," said Gary Pee (皮金營), general manager of Caesar Park.

After the remodeling, the hotel's average room rate was increased by NT$1,200, or 31.58 percent, to more than NT$5,000 a night, he said.

Revenues are expected to jump as well. Last year, Caesar Park's 250 rooms generated NT$360 million in sales. The 280 new rooms are estimated to bring in an additional NT$500 million, or a staggering growth rate of 40 percent, Pee said.

Caesar Park expects to complete its second phase of renovation in February next year. At that time, Pee said, four to 20 -- depending on how much land can be purchased -- premium stand-alone villas, each measuring 100 pings (330m2), will be offered to affluent guests.

The concept of offering higher-priced, upper-tier services and facilities is also shared by Leofoo Resort, which has increased room rates at its 11-story hotel from NT$5,800 to as much as NT$16,800 per night. To justify the increase, the hotel offers jacuzzis, hot springs, steam rooms, outdoor swimming pools filled with sea water or fresh water, a gym and a children's playroom.