10 May 07 The Business Times by Christine Sim
HOTEL, spa and resort developer and manager Banyan Tree Holdings announced yesterday that it will not pass up on what it sees as an opportunity to become a price-maker in the growing global small luxury hotel market.
The company believes that it has to take advantage of its current position as one of the few established global small luxury hotel chains by increasing its reach in key areas such as China, the Middle East and South America - and it has to do it fast, before other players muscle in on the potential gains.
Banyan Tree will embark on aggressive expansion plans over the next few years, adding 39 more hotels to its chain by 2010, to seize an opportunity for worldwide market dominance. This includes sealing its commitment to expanding in the American market by entering a joint venture agreement with Monte Xanic, a Mexican winemaker, to build Banyan Tree's fifth resort in the Americas, which will cost US$60 million.
The vineyard resort, which is the first luxury spa and resort in the area, will be entirely managed by Banyan Tree.
The company expects to be launching its first two resorts in Mexico next year.
Banyan Tree wants to increase its number of keys to 5,614 by 2010 - more than five times the number of keys it had at the end of 2006. It also intends to increase its number of spas and galleries from 126 now, to 200 by 2010. By the end of this year, Banyan Tree will open 10 more spas, manage three more hotels and launch four more resorts - and expansion will continue exponentially.
'We believe we have a shot at being a major world player. This is very rare for a local company. There is a window of opportunity, a space where we can become dominant in a niche market because of the increasing segmentation of demand. We must not miss it,' said Ho Kwon Ping, executive chairman of Banyan Tree.
The company on Tuesday announced a 30 per cent increase in first-quarter revenue to $104.9 million. Net profit attributable to equity-holders rose one per cent to $11.16 million.
From May 31, Banyan Tree Holdings Ltd will be included in the Morgan Stanley Capital Index, which is usually regarded as prestigious for a stock.