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Suvarnabhumi » Airports of Thailand to cancel Suvarnabhumi Airport hotel contract

Sunday, July 20th, 2008

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The management contract for the airport hotel at Suvarnabhumi will be cancelled because the contractor was unqualified to win it in the first place, an informed source said. The board of the Suvarnabhumi airport hotel, headed by Airports of Thailand chairman General Saprang Kalayanamitr, decided yesterday to void the contract of Universal Hospitality Joint Venture, which runs the Novotel Suvarnabhumi Airport hotel.

Airports of Thailand board found that the bidding terms for the management rights of the hotel prohibited a joint venture from vying for the contract because a joint venture is not a juristic entity under the Civil Code and this could pose legal problems.

The terms also required every contender to have the right to use a hotel chain name before joining the contest in September 2004. However, the joint venture only later received the right to the Novotel name from AAPC (Thailand) Ltd, which is the sole owner of the Novotel brand in Thailand.

Eight companies registered interest in bidding for the contract Intercontinental Hotel Group Asia Pacific, Marriott Hotel Group, Central Plaza Hotel, Dusit Hotels and Resorts, AAPC (Thailand), Amari Hotels and Resorts, Sheraton Overseas Management, and the Carlson Group. Five submitted bids. Universal Hospitality Joint Venture was not among them.

The authorities have yet to find out how Universal Hospitality eventually obtained the new Bangkok airport hotel management contract.

The bidding terms also required contenders to be a single company with a minimum registered capital of 100 million baht. Universal Hospitality, on the other hand, consists of D.K. Lam Properties Co and Kong Thana Co.

D.K. Lam Properties was founded in 2002 and thus was not qualified for the contract because the bidding terms required the contender to have been registered for at least 10 years. Kong Thana Co was set up 14 years ago but has registered capital of only five million baht.

In their registration documents, neither company expressed any intention of managing hotels.

The Suvarnabhumi hotel board under the Airports of Thailand decided yesterday to consult with the Office of the Attorney General on further action in dealing with the contract nullification.

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