Following several years of fast growth, the country's high-end motel sector has reached saturation and operators are mulling changes needed to survive, a market veteran said yesterday.
It takes longer to break even and the life cycle for motels has turned out to be relatively short given consumers' fickle preferences, said Timothy Hsu (
He said most motel customers are generally driven by curiosity and a desire to try new services. Newly opened motels generally can register high occupancy rates during the first one or two years, even attracting customers for two or three hours of luxury.
However, after their curiosity has been satisfied, customers generally return to older, more economical establishments, he said.
"The luxury motel market is quite small. Some competitors have been forced to drop out of the high-end market and seek survival in the lower-end section," he added.
WeGo Motel is also considering developing a second brand to target the mid-range motel market in central and southern Taiwan.
Before that, it plans to further raise the bar by building the nation's biggest boutique motel in Taipei's Dazhi area.
The firm yesterday morning held a groundbreaking ceremony for its fourth motel in northern Taipei. The NT$1 billion (US$30.2 million) project, located opposite the Jiannan (
Built on a lot measuring 1,618 pings (5,340m2), the Dazhi motel will house 105 rooms on seven floors, designed with 42 different themes.
"Given the white-hot competition, the key to success is injecting massive investments to attract a larger segment of the market and to enhance service to make consumers feel at home," Hsu said.
Breaking down the total investment, each room in the Dazhi motel is worth NT$10 million, twice the cost of the company's Linsen N Rd outlet in Taipei's old "Combat Zone" area.
Hsu said to strengthen dining and entertainment, each room in Dazhi will be equipped with a dining area, a bar counter and a home theater.
Guests making reservations can enjoy tailor-made services, choosing an individual combination of breakfast, bed and bath.
As the room rate in the Dazhi motel will probably be no higher than the Linsen motel, Hsu estimated it would take seven years to break even -- longer than the Linsen outlet's three-year record.
As soon as the new project is completed, the firm will close down the Linsen motel for a NT$200 million remodeling to boost its competitiveness, he said.
While its expansion plan in Taiwan will continue, WeGo Motel plans to expand its activities across the Taiwan Strait, with the first hotel starting operations in Suzhou in 2008.
The joint venture, in which Hsu's firm controls 33 percent, has purchased land for the construction of a five-star villa resort to target well-heeled tourists, Hsu said.
TECH TITANS: Amazon’s latest chip joins Google in competing for the 90 percent market share held by Nvidia, which claims it is ‘a generation ahead of the industry’ Amazon Web Services (AWS) on Tuesday launched its in-house-built Trainium3 artificial intelligence (AI) chip, marking a significant push to compete with Nvidia Corp in the lucrative market for AI computing power. The move intensifies competition in the AI chip market, where Nvidia dominates with an estimated 80 to 90 percent market share for products used in training large language models that power the likes of ChatGPT. Google last week caused tremors in the industry when it was reported that Facebook-parent Meta Platforms Inc would employ Google AI chips in data centers, signaling new competition for Nvidia. This followed the release last month of
INSULATED: The company said it is less exposed to global complications, as it has built a strong footprint worldwide, and has multiple sources of rare earths and raw minerals Merck Group yesterday said it would ramp up production next year at its new flagship facility in Kaohsiung’s Lujhu District (路竹) to satisfy growing demand for advanced semiconductor materials and specialty gases, and to address supply resilience issues amid mounting geopolitical risks. Merck made the remarks during a news conference before the inauguration of its 500 million euros (US$582.1 million) facility, which is also to supply other markets in the Asia-Pacific region, it said. Merck executive board deputy chair and electronics CEO Kai Beckmann told reporters the company adopted a “local-for-local” strategy about seven years ago to address the cycle time of
Two companies wholly owned by the daughter of the founder of Hon Hai Precision Industry Co (鴻海精密) on Monday reported to the Taiwan Stock Exchange that they would dispose of all of the Hon Hai shares they hold. In filings with the exchange, Hong Wei Investment Co (鋐維) said it would sell the 2.771 million Hon Hai shares it holds and Frontier Investment Corp (承鋒投資) said it would sell its 2.409 million Hon Hai shares from tomorrow until Jan. 3 next year. The two companies are wholly owned and chaired by Shirley Gou (郭曉玲), the eldest daughter of Hon Hai founder Terry
RIDING THE WAVE: The race to build AI infrastructure has lifted the valuations of top memory makers, such as Micron, amid dwindling inventories and supply challenges Micron Technology Inc is to spend ￥1.5 trillion (US$9.6 billion) to build a plant in western Japan to make memory chips for artificial intelligence (AI) applications, the Nikkei reported on Saturday. The move comes as Micron seeks to diversify advanced chip production outside of Taiwan, the Nikkei article said, citing people familiar with the matter. The new factory will manufacture high-bandwidth memory (HBM) chips, a key component for working with AI processors such as those made by Nvidia Corp, the report said. Micron would build the facility within the compound of its Hiroshima plant, starting in May next year, with plans to launch
RSS