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Iconic Bangkok hotel calls time after slide in luxury room rates

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The Dusit Thani Bangkok hotel will close next month for a US$1.1 billion redevelopment, and when it re-emerges, it will have office, retail and residential space - and about half the number of rooms it has now.

Bangkok

A landmark Bangkok luxury hotel is being reshaped by intense competition in a city where posh rooms can sell for as little as 3,200 baht (S$137) per night.

The Dusit Thani Bangkok hotel will close next month for a US$1.1 billion redevelopment, and when it re-emerges, it will have office, retail and residential space - and about half the number of rooms it has now.

"We have got a lot of complaints about tearing down our iconic hotel, but it's necessary," Dusit Thani's chief financial officer Narongchai Wongthanavimok, said in an interview.

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"We really can't compete with other luxury hotels given the intense competition in this industry."

Bangkok, the world's most-visited city, is replete with plush hotels dueling for customers, which can push the cost of five-star luxury down to as little as 3,200 baht per night.

Developers in the capital are increasingly turning to mixed-use projects to hedge such risks and maximise real-estate returns.

In the long term, Dusit Thani plans to expand overseas revenue and is looking for opportunities to purchase hotels in Europe, Mr Narongchai said.

The redevelopment project is a joint venture with Central Pattana, which took a near 23 per cent stake in Dusit Thani in May. The Bangkok hotel dates back to the 1970s, when it was in the vanguard for luxury before the city became a tourist mecca.

A rally in Dusit Thani's shares triggered by the Central Pattana investment fizzled this year, as fewer Chinese arrivals led to slower tourism growth. BLOOMBERG