Next Story Group adopts ‘hub and spoke’ model for Kafnu’s growth

Kafnu Alexandria, Sydney

Following the debut of Kafnu in Hong Kong, the Next Story Group is accelerating the brand’s Asian expansion, targeting 50 Kafnu premises within the next three years, predominantly in key capital cities.

The Kafnu concept is a blend of a private members club, shared workspace and boutique hotel.

According to group chief development officer, Andreas Flaig, the expansion will adopt a “hub and spoke” strategy, with “hubs” of 5,000-10,000m2 surrounded by “spoke” locations in smaller spaces of 2,000 – 5,000m2.

Kafnu Alexandria, Sydney

To date, there are three operating Kafnu properties, namely Hong Kong, Taipei and Bengaluru. By the end of 2018, Kafnu will add two more locations in Australia and Vietnam.

Projects in the pipeline are in Sydney, Ho Chi Minh City, Colombo, Mumbai and Bali, and the group is eyeing multiple locations within key cities such as Hong Kong, Mumbai and Delhi.

The group is also keen to step up its membership focus to drive loyalty across Kafnu properties in different cities.

Speaking to TTG Asia at the recent HICAP in Hong Kong, Flaig explained: “The beauty of the concept is that the membership is not bounded by geography; they can access the overseas premises and can network with local members there. As you see the intra-Asia traffic is growing, so we’d like to make sure when they travel, they stay with Kafnu. So far, Kafnu properties in Hong Kong and Taiwan have over 400 members altogether.”

Membership is on a selection basis, and is driven by members’ word of mouth and via the members’ own network, he revealed.

In terms of finding suitable locations, the group have looked at the commercial, retail and hotel spaces in three markets, namely India, Greater China and Australia.

Another aspect of the Kafnu strategy is conversion projects. Flaig added: “We can take an old, rundown, unprofitable small-scale hotel and convert it into a Kafnu. Take Greater China as an example. We are planning to have two to four in each cities like Shenzhen, Beijing, Guangzhou, Shanghai and potentially Chengdu. I lived in China for nine years and China has a lot of non-performing or over-built assets, which do not produce enough revenue.”

Beyond the Kafnu brand, the Next Story Group is also mapping expansion of its hotel brands. Among the upcoming openings are The Next Hotel Colombo, a 255-key property in Melbourne and a Sage Hotel in Ho Chi Minh City, the group’s CEO Darren Edmonstone shared.

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