IGB plans 4 more Cititel Express hotels

IGB Corp Bhd has plans to open four Cititel Express hotels between now and 2010, at an estimated cost of RM120 million.

The proposed hotels, costing about RM120,000 per room to build, will be located in Kota Kinabalu, Ipoh, Penang and Kuching.

IGB already operates two Cititel hotels - in Mid Valley City, Kuala Lumpur, and Penang - and a Cititel Express in Jalan Tuanku Abdul Rahman, Kuala Lumpur.

It is not surprising that IGB - which also runs the Boulevard, MiCasa and The Gardens hotel brands - is looking to grow the Cititel name as the hotel chain rakes in gross operating profit (GOP) of 60 per cent.

GOP is gross revenue (from rooms, food and beverage, laundry or business centre) minus cost of operations (wages, electricity and amenities).

"Ideally, we would like to have representation on the Kangaroo route, from London to Australia via Southeast Asia," IGB executive director Tan Boon Lee said in an interview with Business Times.

"We are keen on city centre developments, and our plan is to grow the Cititel brand and St Giles.


STRATEGIC PILLAR: One of the rooms in Cititel Express

"Hotel operations are a strategic pillar for IGB, and will continue to grow," he said, adding that the business will grow at the same pace as its property development and property investment and contribute a third of its profit.

The Cititel/ Cititel Express names are used in Southeast Asia, while the St Giles brand is used in London, the UK. All three brands cater for the mid-range market.

Cititel typically has 400 rooms, while Cititel Express has about 250 rooms.

IGB is also aggressively seeking hotel representation in Sydney and Bangkok, Tan said.

He added that, given the strong GOP, it made better sense to own and manage a hotel rather than just the latter.

Likewise, IGB prefers to build its own hotel than take over an existing one.

The five-star 439-room The Gardens hotel and 170 serviced apartments in Mid Valley City will open this quarter and the third quarter respectively.

Other hotels in the group include the MiCasa All Suite Hotel in Yangon, Myanmar; New World Hotel in Ho Chi Minh City, Vietnam; and Boulevard Mid Valley.

All the hotels, except that in Yangon, registered net profits last year.

Tan expressed hopes that once the economy in Myanmar bounces back, the hotel there will also report net profits.

By New Straits Times (by Vasantha Ganesan)