Why this Thai investor is doubling down

BANGKOK – Thailand’s Boutique Corp. will put up for sale three of its hotels this year while developing four new assets, including a JW Marriott, which marks its entry into the luxury market. The company also aims to grow as a third-party operator and has signed a deal with Accor to franchise the Mövenpick, Mercure and Handwritten Collection brands.

President and Group CEO Prab Thakral exemplifies the seasoned Thai hotel investor, developer and operator who does not cower in cautiousness when signs of market challenges appear.

Thailand suffered a 7% decline in arrivals to 33 million last year versus 2024, the first drop in a decade discounting COVID-19’s freefall. The kingdom has been trying get back to pre-COVID-19 level of 40 million arrivals, but a series of incidents tarnished its image as a safe and happy holiday haven while neighboring Vietnam became a stronger competitor.

The capital city, Bangkok, where Boutique is building its JW Marriott and JonoX Handwritten Collection, is widely expected to be a buyer’s and guest’s market. The Real Estate Information Center noted a “significant” future oversupply in Greater Bangkok due to a 230% surge in hotel construction permits in 1H2025 year-on-year. Cushman & Wakefield expects around 7,000 new rooms to enter the city from 2025 to 2028, with 5-star hotels comprising 66% of the total. As it is, Bangkok’s total inventory has exceeded 83,000 keys, according to CBRE Thailand.

But Thakral said, “The best locations will always do well, even in tough markets.”

The company prides itself as a local player that understands the lay of the land, how areas will evolve in the future, and the timing to plant a flag on a location. It is also “opportunistic to some extent,” Thakral said.

Rendering of the JW Marriott Hotel Bangkok Sukhumvit Soi 24 (far right)

The new JW Marriott Hotel Bangkok Sukhumvit Soi 24 may best illustrate this. Boutique was able to secure more land at the location, which is an alley or side street and naturally lacks luxury brands. However, the area has since evolved into a luxury shopping haven.

Boutique’s land grab there is significant as 1.2-acre plot now directly links Sukhumvit Soi 24 and Soi 26, creating a dual access for the hotel. This allows guests to bypass some of the area’s notorious traffic.

“When we started to look at Soi 24 and its prospects such as the opening of EmSphere [luxury shopping complex] and the luxury clientele in the area, all the hotels were 3- and 4-stars. The luxury hotels were all on the main roads,” Thakral said. “Years ago, it would have been very hard to convince Marriott to give us its flagship [JW] there, but I believe they too have researched the area and realized this sub-market location is a high potential luxury destination today.”

Construction starts this year with a full opening scheduled for 2030. The valuation upon completion is between 6-7 billion baht (US$191 million), Thakral said.

But the JW is not built to exit, rather as a stable long-term stream of recurring income for Boutique and a jumpstarter for its aim to be a regional leader in luxury hotel projects, Thakral said.

Model holds true

At the same time, built-to-exit in is still thriving in Thailand, as Thakral sees it. “We have a growing following of family offices, from Thailand, Singapore, Hong Kong and Australia, that are looking for an exit at the outset and want to co-invest with us,” he said.

Under its Build-Operate-Sell model, Boutique invests a minimum of 26% in projects, while family offices contribute up to 74%. Generally, it would exit assets within three years of opening, Thakral said. The company boasts a typical equity IRR of 15% to 25% and an average equity multiplier of 2.1 times.

“With that kind of record, our family investors know they are not putting their house on the line when investing with us. And because construction costs are getting more challenging, and licensing is getting harder, certainly in Bangkok, people who understand this will back the right companies when it comes to direct investment in real estate,” he said.

Currently, Boutique’s portfolio comprises 10 operating hotels and two commercial properties. It has a stake in nine of the 10 hotels.

In Phuket, Boutique is building two hotels just 300 meters from Kamala Beach. The first, a Mövenpick, is scheduled to open in 3Q26, while the other will start construction in February and is scheduled to open in 2027. The company is discussing a franchise with a global brand for the latter.

We discussed with Accor about converting the management agreements for our Novotel and Ibis [in Chiang Mai] to a franchise. When we did that, we saw an improved cost management and a significant uplift in performance due to us as owners directly handling the revenue management. That gave us the conviction that franchising is a pretty good model.

Prab Thakral

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Reports suggest that the outlook in Phuket is brighter than Bangkok, thanks to the island’s shift towards long-stay and lifestyle travelers from Russia, Europe and India, which enables hotels to maintain pricing. C9 Hotelworks, for instance, notes that ADR rose 8% to 10% in 3Q25 over 3Q24, while average occupancy declined 2% to 5%.

The valuation upon completion of the two Phuket hotels, along with the JonoX Handwritten Collection Bangkok, is estimated at 6.5 billion baht. The three hotels are built to exit, and will be managed by Boutique.

“From now on, any mid-market or below luxury hotel [under Boutique] will be operated on a franchise basis, whether we own the asset or other owners own it,” Thakral said. “But we’re not exclusive to Accor brands and vice versa.”

Franchise ready

Boutique now has the infrastructure – and confidence – to grow as a third-party operator, Thakral added. Pre-COVID, it had moved several hotels into a franchise, initially with the Oakwood platform. It also created two white label brands, JourneyHub and Jono Hotels. Over time, the firm centralized operations, revenue management, sales and marketing, HR, accounting and other functions.

“When COVID-19 came, chains began to change their teams,” Thakral continued. “We discussed with Accor about converting the management agreements for our Novotel and Ibis [in Chiang Mai] to a franchise. When we did that, we saw an improved cost management and a significant uplift in performance due to us as owners directly handling the revenue management.

“That gave us the conviction that franchising is a pretty good model. Besides, the general direction of some of the big brands is to move from operations on the ground to the U.S. and Europe model where they do franchising and let owners pick their operators. The large brands saw our data and said, ‘why don’t you do more franchising on your own?’”

Added Thakral, “I treat every hotel that we manage for another owner as my own. We are at a size when that can still happen.”

He won’t reveal the three hotels that Boutique will put on sale this year, or 2025 profitability.

“What I can say is that in 2025, we chose not to exit certain assets because there was a gap between bid and ask,” Thakral said. “So, you’ll see our performance won’t be as good as our very profitable years. But with interest rates going down this year, and the level of interest we’re seeing of people wanting to buy assets, the bid-ask spread is narrowing.”

He closed by adding, “We are hoping for good profitability in the next three years.”