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Thai-based hospitality group Montara have made public their plans to develop a hostel brand named Heritage Stays.
The recent announcement which was unveiled in TTG Asia has created widespread interest in the sector.
Montara is already deeply invested in the luxury segment with their Phuket flagship Trisara being a market leader at the top end of the market.
Last year the group cashed up and out of their upscale Boathouse property in Kata Beach Phuket which transacted to an affiliate of Singapore’s HPL Group.
Montara’s positioning in the posh hostel segment will be into older historic buildings that can be retrofitted.
Former Lud d executive Chittipan Srikasikorn has been brought onboard to assist on product development.
The first project coming into the market will be the renovation of the Prince’s Cinema located near the river in Bangkok.
We spoke to Montara who have said their Heritage Stay initial offering will open this coming November.
According to C9 Hotelworks Southeast Asia Hostel Market Trends, the ability of the sector to expand quickly on retrofit projects in urban areas, means groups like Montara can scale up quickly.
These are strong cash flow models but the key difference is not a reliance on traditional hotel average room rates but instead returns use the metric of the average rate per bed, and in many cases these exceed the returns of budget and economy properties.