|Onyx Hospitality Group is developing properties in two key Sri Lankan cities, including Colombo and Kandy.
BANGKOK— Three years ago, Onyx Hospitality Group was one brand in one country—Amari hotels in Thailand. Now, the company has in its portfolio four brands and 32 properties, with locations in China, Hong Kong and India, and is continuing its expansion with a focus on becoming a large regional player throughout Southeast Asia.
The Thailand-based company had set a goal to have 51 hotels in its portfolio by 2018, expanding beyond Asia and ingratiating itself in the Arabian Gulf and Australia hotel markets. Because of its success, Onyx is upping its target to 75 properties to be at least opened or signed by 2018.
“After 2018, we may review the strategy. We may well explore somewhere new,” said Simon Allison, executive VP and chief development officer for the company. “We want to make sure we know what we’re doing in our home region first.”
The company is primarily a manager of hotel properties, but does have a controlling interest in five Amari properties in Thailand, a 20% ownership interest in the Oriental Residences in Bangkok and a 50% interest in the construction of the Ozo Chaweng Samui. Onyx shareholders own the other 50% share of the Ozo Samui.
Onyx Hospitality Group
Allison said that, for Onyx, a company that is showing rapid growth, it’s more important to stake its claim in Asia with its new brands and hotels before going global.
“We want to be a sizeable regional player but smaller in the world stage right now,” he said.
A prominent player in Asia
Asia is mostly a new-build market, Allison said.
Outside of Thailand, Onyx is strictly an operator, although the company will contribute capital for refurbishments.
“We’re not looking to be a real-estate company,” Allison said.
He said Onyx doesn’t yet have the capital to be a major owner throughout the world and prefers to do things via management contracts.
Onyx manages four diverse hotel brands: Saffron, a 5-star luxury brand; Shama, a luxury boutique service apartment; Amari, the mid- to upscale centerpiece brand; and the 3-star select-service Ozo brand.
Recently, the management company marked a milestone, breaking ground on its first Ozo property, Ozo Chaweng Samui in Thailand, which is scheduled to open in early 2014.
“There are different customer bases with different needs,” Allison said. “If we only had one brand, you’d be boxing yourself into one type of client.”
He added these different types work for guests and developers throughout the Asia/Pacific region. Amari has more facilities and offers large meeting spaces for corporate business whereas the Ozo brand attracts guests who want to explore the area but won’t need to use the hotel facilities.
The wide-ranging portfolio is paying off. “In occupancy, we run pretty full,” Allison said. “In the first half of the year, Thailand is well over 80% (occupancy). Our biggest brand properties run 80% per year. Shama in China and Hong Kong runs around 90% occupancy.”
The ideal traveler
Onyx has 32 properties—17 hotels and 15 luxury apartments—comprising 5,500 rooms. There are 10 more properties in its pipeline. Part of its success is because, as a management company, it looks out for its hotel owners, Allison said.
“We try to be transparent and owner friendly as management companies are,” Allison said. “I have a management background. I was CFO of a large ownership company. We think more like owners. We don’t like hidden charges. What you see is what you get with this company.
“We try to differentiate ourselves with that.”
With large distribution systems in China, Moscow and Dubai, as well as a quarter of business coming from the Internet, Onyx is not only diversifying its properties but also is attracting a variety of guests, including business and leisure travelers.
Allison said 70% of Onyx’s corporate business comes from Fortune 500 companies. But the hotels welcome tourists from the United Kingdom and Germany, who frequent Thailand during their winter months, while Japanese and Korean visitors come to Thailand during the low season. However, he said, the biggest markets are China and India.
“There’s a lot of wealth being created in China and India; a lot of business and leisure groups,” he said. “Now the middle class has disposable income and are happy to spend it. Europe’s struggling. The (United States is) struggling. It’s good to have the Asian client bases emerging.”
Challenges in the Asia/Pac market
Allison admits there are difficulties developing in Asia, including regulations, bureaucracy and corruption within the market, but he said those hurdles are overcome by guest services.
“Somewhere like Thailand, (staff) is naturally friendly and naturally helpful. There’s a developed industry base and a larger talent pool to choose our service team from” he said.
However, in Sri Lanka, where Onyx is developing more properties, “international service standards are still in their infancy, and we have a much smaller pool of hospitality professionals to choose from," he said. The market is now booming, and there are thousands of rooms but finding the talent to deliver these international standards can be challenging.
Still, he said, those are only minor issues for Onyx.
“We’ve come a long way,” Allison said. “We know the pace we need to take and don't want to do too much to fall over.”