Christmas comes early for Accor, which announced its first Orient-Express Hotel in Bangkok, a 154-room property that was originally meant to be an Edition hotel. But there is still much for Accor to do as luxury players find the old new brand "confusing."
At 314 meters, the 77-story Mahanakhon was Thailand’s tallest building when it officially opened in December 2016. A mixed-use skyscraper with the startling appearance of an unfinished glassy jigsaw, it was built at a cost of around $670 million, nearly breaking the bank for the developer, Pace Development Corporation.
Pace consequently sold chunks of the building to King Power International Group for around $385 million earlier this year. This included land, a 154-room hotel that Marriott International had signed on as an Edition, an observation deck, and a smaller Cube retail building.
The sale spelled good news for AccorHotels, since the chain has good relations with the duty-free king and manages its 366-room Pullman Bangkok King Power Hotel. It also has a new brand after acquiring a 50 percent stake of Orient Express last year from SNCF, with the intentions to reinvent its storied past for the future.
So out goes Edition, a brand conceived by Ian Schrager in partnership with Marriott, and in comes the world’s first Orient Express hotel, which will open in fourth quarter 2019.
Marriott was planning to open the Edition by the end of this year, according to sources. Staff was hired, even a general manager, Christiano Rinaldi, but the opening kept getting postponed. Rinaldi is understood to have now been appointed general manager of Edition in Tokyo.
It is unclear if the change of management contract has been settled amicably. At press time, neither Marriott’s president and managing director Asia-Pacific Craig Smith, nor Rajeev Menon, its chief operating officer Asia, responded to Skift’s enquiries on this.
Marriott, however, still maintains the 209-unit Ritz-Carlton Residences Bangkok, a major part of the project, which was not sold to King Power.
Accor might not have intended for the first Orient Express hotel to be in Bangkok. Its arrival is serendipitous. In an interview in Seoul last year, CEO Sebastien Bazin said, “We’re going to start [putting Orient Express hotels] in places of the original Orient Express journey between western and central Europe.”
“It will take time [to grow the brand] because only few hotels deserve Orient Express as a brand. So we’ll be very selective, we have plenty of time, but we have to be very prudent and not go too far with the brand [expansion]. What Orient Express has is so incredible it can also be incorporated into furniture, silverware, luggage but, again, please protect it,” added Bazin.
A VERY MODEST PIPELINE BY ACCOR – YES IT’S TRUE
Accor plans to have only 10 Orient Express hotels by 2030, said a spokesman.
The exclusivity, however, can be a double-edged sword as Asian luxury operators Skift spoke to said by-and-large they still do not know what to make of an Accor-led Orient Express hotel and have in fact now taken to Belmond. LVMH’s acquisition of Belmond only makes the affinity stronger.
Orient Express, though a big name, has nothing to show for yet. A selective expansion may make it harder for operators to grasp its concept quickly.
“I don’t quite know yet what to say of the [Orient Express] branding except that I find it rather confusing,” said Laurent Kuenzle, CEO of Asian Trails Group, which handles inbound luxury travelers to Thailand. “On the other hand, I think the acquisition of Belmond by LVMH is an excellent move, a perfect fit.”
Added Chang Theng Hwee, CEO of Scott Dunn Asia, “I’d certainly be interested to see the new Orient Express hotel [in Bangkok] when it opens. Until then, all I can say is that Scott Dunn has a brilliant relationship with Belmond. Their collection of iconic hotels, trains and river cruises brings together some of the world’s most thrilling journeys and destinations that our guests love.”
The Bangkok property therefore has its job cut out for it in defining the brand values physically. In a statement on Orient Express Mahanakhon Bangkok, Accor said the hotel would bring together “the highest standards of fine craftsmanship, the newest innovations and the most exquisite dining” which the original Orient Express trains were famous for.
French interior architect Tristan Auer, a principal of Wilson Associates, has been tasked to reimagine the Art Deco stylings and plant motifs of the original Orient Express carriages into the modern skyscraper.
The hotel will field two signature restaurants, Mott 32, and Mahanathi by David Thompson, the statement said. Another hallmark of the Orient Express, staff excellence and the prestige of the uniform, will also be present.
“I am not sure what Accor needs to do except to spend more marketing dollars differentiating Orient Express as a hotel brand rather than the train experience,” commented a senior executive of a competing chain.
It’s a dog-eat-dog world
In an increasingly competitive market, it needs all that.
“Orient Express Bangkok will definitely compete with the established five-star luxury brands here including Mandarin Oriental, Waldorf Astoria, Park Hyatt, Kempinski, Peninsula and St Regis, as well as with the new Capella and Four Seasons scheduled to open in the next couple of years,” said Kuenzle.
Luxury hoteliers in Bangkok Skift spoke to said they compete not just with one another but with upscale and upper upscale hotels which an afford to offer lower rates.
Thailand gets a lot of international tourists — over 31 million in the first 10 months of this year — but less than half choose to stay in luxury hotels, according to Colliers International Thailand Research.
Though the average daily rate of luxury hotels in Bangkok has risen in the first half of the year, it is only slightly at around 2 to 5 percent. More luxury hotels are opening, the latest being Waldorf Astoria which opened in August, and Colliers said a total of nine to 10 luxury hotels with 2,478 rooms are under construction and are expected to be completed in 2018-2019.
About 71 per cent of the total of future luxury hotels is located in downtown Bangkok such as the area around Lumpini Park, Silom or Sathorn (where the Orient Express hotel is), and the Sukhumvit area.
Therefore, these three locations will continue to grow in the future, pushing the total number of luxury hotel rooms to 4,066, according to its Bangkok Luxury Hotel report for second half 2017.
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Photo credit: King Power Mahanakhon Building, the second tallest building in Thailand after Magnolias Waterfront Residences at Iconsiam AccorHotels