Amara’s first resort project opens on Sentosa

Amara Holdings soft-launched its first resort development, Amara Sanctuary Resort, in Sentosa this week. Although Amara Sanctuary is located next to Genting International’s Resorts World, Amara’s chief executive officer Albert Teo says that the company does not fear competition from the integrated resort.

‘We are targeting a different market,’ Mr Teo told reporters.

Resorts World, with its Universal Studios theme park, will attract many families, said Mr Teo. But as with Amara’s other hotels, Amara Sanctuary targets business travellers, with 91 deluxe hotel rooms.

‘We don’t intend to compete,’ said Mr Teo. ‘We want to complement.’ The activity generated by the integrated resorts will ‘augur well for the whole industry,’ he added.

The resort also has two ballrooms and seven meeting rooms, for MICE (meetings, incentives, conventions and exhibitions) or business events. Amara is in negotiations to host a Forbes event this November.

Yet Amara Sanctuary is also a leisure development, with 10 villas and 20 suites - the latter housed in converted colonial buildings. Another 26 suites will open by the end of 2008.

Mr Teo expects a full payback on the $60 million Amara Sanctuary investment within five years.

Although Amara Sanctuary will feature a spa and wellness centre, this will be run by an outside operator. The company has no plans to develop a spa brand as has been done by competitors such as Banyan Tree Hotels and Resorts. ‘I think we want to stay very focused,’ Mr Teo said.

And Amara’s focus is in expanding its three hotel brands - Amara, the five-star Amara Signature, and Amara Sanctuary - across the region.

The company is actively looking at sites in Vietnam, Mr Teo said, citing the coastal city of Danang as a good location for a purely leisure development. Amara is also looking at ‘gateway cities’ in China, for business hotels.

For the year ended Dec 31, 2006, Amara’s revenue was $79.8 million, with $23.5 million in net profit. It had net debt of $247 million, with gearing of 1.5 times.

Amara plans to pursue an ‘asset-light strategy to reduce gearing,’ by managing third-party hotels, and develop and manage new assets before subsequently divesting them. ‘We want to be a niche player for quality hospitality assets,’ said Mr Teo.

Amara has signed its first management contract with a third party, for a four-star hotel in east Indonesia.

Source: The Business Times, 02 May 2007