Ambassador Hotel Ltd (國賓大飯店集團), one of Taiwan’s listed hotels, launched its first budget hotel in Taipei yesterday, aiming to reach its break-even point within seven years by eyeing independent travelers from Hong Kong, Macau, Singapore and Malaysia.
The hotel — Amba Taipei Ximending (台北西門町意舍) — will begin its one-month trial operations on Saturday, with formal operations scheduled to begin on Feb. 23.
“Located in Ximending, a place full of rich cultural and tourism resources, we hope the hotel can attract tourists between the ages of 30 and 45,” Amba president Teresa Huang (黃絢霞) told a media briefing.
The increasing number of independent travelers to Taiwan and the success of Just Sleep (捷絲旅), a budget hotel launched by Formosa International Hotels Corp (FIHC, 晶華國際酒店集團) in 2009, gave Ambassador Hotel the inspiration to launch a new budget-conscious brand.
In 2010, Ambassador Hotel signed a contract with Eslite Corp (誠品) to rent one of Eslite’s properties in Ximending in downtown Taipei to build its first budget hotel.
Ambassador Hotel and China Prosperity Development Corp (中欣開發), a subsidiary of China Steel Corp (中鋼), invested a total of NT$350 million (US$11.67 million) for Amba Taipei Ximending, with Ambassador Hotel holding a 60 percent stake and China Prosperity holding the remaining 40 percent share.
Huang said the occupancy rate for the hotel’s rooms would reach 70 to 80 percent in the first year based on a conservative estimate, while most of the hotels located in Ximending have an 80 to 90 percent occupancy rate.
“With an average occupancy rate of 75 percent and an average room price of NT$3,200, the hotel aims at reaching break-even point, which means to earn back the total investment amount, in seven years,” Huang said.
Even though the tourism sector is poised to benefit from closer relations with China after President Ma Ying-jeou (馬英九) won a second term in office on Saturday, Huang said Chinese tourists would not be Amba’s primary target, as most travelers from China still travel in tour groups.
Huang said she expected tourists from Hong Kong and Macau would make up about 40 percent of the hotel’s customers in the initial stage, followed by 20 to 30 percent from Singapore and Malaysia.
Ambassador Hotel said it would keep looking for appropriate locations to build more hotels under the Amba brand.
The second Amba Taipei hotel is expected to open in 2014. The location would be near Songshan Railway Station, involving potential investors such as Ambassador Hotel and Ruentex Group (潤泰集團), the Amba president said.
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