Thai shrimp exporter sets rate benchmark in Pattaya

PATTAYA, Thailand - A Thai shrimp exporter developed his first hotel, the Andaz in Pattaya, Thailand, and lo and behold, the hotel that Narit Chia-Apar built already appears to be a rate leader within just a year of opening.

A Google pricing search is an indicator. As of June 21, the Andaz Pattaya Jomtien Beach charges on average 10,900 baht per night ($297), higher than 8,800 baht at the all-suite wing of Pattaya's oldest 5-star hotel Royal Cliff. Another U.S. brand, Hilton Pattaya, and homegrown Thai brand Centara Grand Mirage Beach, follow at 7,500 baht and 7,400 baht, respectively.

Andaz rate push is striking as Jomtien is not even in Pattaya City, which is four kilometers away. It points to a trend of travelers preferring less crowded Asian beach destinations, as a recent survey of U.K. tour operators by the Pacific Asia Travel Association shows, but also to the need for hotel investors to create unique products, as the Andaz has done, to challenge established spots.

Not that Chia-Apar became a hotel owner to take on entrenched resort destinations. He just wants to build a “beautiful, handmade” hotel with no exit strategy as it’s a “legacy” for his family, he told Hotel Investment Today. He spent $150 million on the 204-room hotel, excluding the cost of land he bought 20 years ago. That’s nearly the revenue his listed company, Seafresh Industry, one of Thailand's largest exporters of frozen shrimps to global markets, made last year ($177 million), according to Reuters data.

View of the Heritage House at Andaz Pattaya Jomtien Beach, a six-bedroom super-suite with a $10,000 room rate,

The result is a hotel that’s fit for royalty. After all, when the place was his family residence comprising three traditional Thai houses on a 15-acre land enveloped by lofty trees, he had the honor of hosting royalty and distinguished guests on various occasions. Why wouldn’t he spend royally on building his first hotel?

Andaz Pattaya turned out to be a heaven for tree huggers. Clusters of single-story to three-story buildings were built around the existing trees – at a cost of a bigger room count had he built a larger or high-story building, which the plot allowed. Five of the trees were planted by royal guests, the source of invaluable memories, said the architect, A49, on its website. Others include a magnificent rain tree spanning 30m, and groves of Banyan trees. All these trees inspired and influenced the design of the resort, A49 stated.

Natural materials such as stone, timber and local woven crafts were used. Lawns, brooks and ponds with koi fish were added, creating a green feast for the eye.

“The biggest construction challenge was preserving the trees,” recounted Chia-Apar. “It took us a lot of time and trouble because half way through the work, you hit roots and if you continue building, a tree may die. So, we had to move here and there [to accommodate trees].”

The hotel took four years to build.

What’s more, he insisted on quality. His son, Chintat Chia-Apar, vice president of Chartered Square, the hotel developer, said with a laugh that his father met the brand’s specifications many times over when choosing fixtures and furnishings, be it the Grohe premium bathtubs or the most luxurious pillows from Siam Feather.

They also went to lengths in keeping to the Andaz promise, “Luxury lifestyle hotels rooted in local art and culture.” For example, the ceilings of the main lobby, restaurants and other areas were covered with exquisite rattan wickerwork, which became the hotel's trademark.

“We went to more than 10 villages to get the work done by the local artisans because it couldn’t be done by one village alone,” the son said.

When Hyatt offered them the Andaz brand instead of the initial plan to build a Grand Hyatt, the Chia-Apar’s were delighted. “It’s quite a difficult brand to get; they are picky about it,” the father said. “I prefer this new brand as it has less limitations [than Grand Hyatt] and we can input our ideas rather than just follow a set of criterion. What we wanted to create might not have been possible as a Grand Hyatt.”

In Asia, Andaz also operates in Bali, Delhi, Seoul, Macau, Nanjing, Shanghai, Shenzhen, Singapore, Tokyo, and Xiamen. Pipeline is robust due to “increasing demand for immersive, authentic experiences among luxury travelers,” said Sarah Leow, vice president of Development & Owner Relations, Hyatt Asia-Pacific. New Andaz hotels will debut in Bangkok, Taipei, Taichung, Hangzhou, Chengdu and Hong Kong, while a second Andaz will open Shanghai.

Chia-Apar picked Hyatt because for him hotels are “all about service and food” and Hyatt is “famous for its F&B concepts,” said the owner who describes himself as a foodie.

I prefer this new brand as it has less limitations [than Grand Hyatt] and we can input our ideas rather than just follow a set of criterion. What we wanted to create might not have been possible as a Grand Hyatt.

Narit Chia-Apar

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He also values the “family-like” culture of Hyatt, which is “similar to the way we run our business.”

“If you meet our GM, Ranjeet [Rajebhosale], you’ll find him a humble, warm and caring family man kind of person. He fits our style of management,” he said.

Humbly sharp

Beneath a self-deprecating demeanor, and the emotional driver to create a legacy, Chia-Apar is a sharp businessman at heart. He saw that the opportunity and timing were right to develop the hotel as the eastern seaboard, which includes the Chonburi province where Pattaya is located, is part of the government’s new economic zone for the manufacture and export of high-value goods such as automobiles.

“It’s a waste if we don’t develop this land into a hotel because the Eastern Economic Corridor [EEC] initiative is attracting a lot of investments from China, Japan and elsewhere,” Chia-Apar said.

Added Rajebhosale, “We are committed to showcase the charm of the Jomtien area as an emerging luxury lifestyle destination within Thailand’s EEC development.”

Besides, land costs have appreciated at least five times and Chia-Apar had, over time, acquired several plots in the area. This includes his 229-acre, 18-hole championship Chee Chan Golf Course located 10km away from the hotel.

But one of his biggest worries about the hotel investment was not knowing what rate the hotel could fetch, as there was no apple-to-apple comparison to reference, given its location as well as high construction and operating costs.

At the same time, he just kept spending. “There are three big swimming pools. The operating cost is high. What if there’s no occupancy?” he said.

These days, Chia-Apar’s less worried. The hotel is targeting slightly over 60% occupancy this year. “So far, we are ahead of budget,” he added.

Chia-Apar is pleased about the rate being twice what he guessed it would be, although he declined to share the ADR. “Our rate is high because of a number of suites and villas, which are twice or triple the rate of standard rooms. The villas usually get booked first,” he said.

Chia-Apar’s former oceanfront home is now a six-bedroom Heritage House charging over $10,000 per night and selling quite well. Another room type that allows for direct pool access also commands a high rate and occupancy. He credited his son for thinking how to utilize the land effectively.

“The hardest rooms to sell are the ones at the back,” Chintat said. “The seafront rooms aren’t hard to sell. So, we wanted the designer to focus more on these rooms.” There are 18 room types altogether at the hotel.

Asked to rank his happiness index for the Andaz Pattaya on a scale of one to 10, 10 being most satisfied, the father said ‘8.5.’ That’s because service isn’t perfect yet due to manpower shortage, while retaining staff is also hard these days, he said.

Based on the hotel’s performance to-date, Narit Chia-Apar expects an ROI timeframe within 10 years. This time, he isn't guessing.