Serviced residence chiefs tell Paige Lee Pei Qi and Xinyi Liang-Pholsena how hospitality consolidation and competition from home rentals are shaping their expansion and distribution plans
Lee Chee Koon
CEO, The Ascott
Ascott has been studying industry trends to stay ahead of the curve. With the rise of the sharing economy and the consolidation of hospitality companies, we have established strategic alliances to leverage our capabilities and create a seamless O2O (offline-to-online and online-to-offline) experience.
We are embracing technology, tailoring the customer experience and transforming our business model to include the sharing economy. Last year, Ascott took a stake in Tujia.com International, China’s largest and fastest-growing online apartment sharing platform. On top of listing our properties, we also operate serviced residences in China under the new Tujia Somerset brand to cater to the booming middle-class travel segment. The joint venture will integrate Ascott’s strengths in managing properties as well as Tujia’s online capabilities.
Ascott’s partnership with Tujia is on the right track as Tujia’s annual transactions are growing at a phenomenal 300 per cent year-on-year and a record was set with single-day orders exceeding 56,000 roomnights. The growth of the sharing economy is set to continue and Ascott is ready to harness this opportunity.
Early this year, we partnered Chinese e-commerce giant Alibaba Group’s online travel service platform, Alitrip, to reach out to over 100 million Chinese travellers. Ascott is also accepting contactless payment modes to enhance customer experience. For instance, stays booked through Alitrip can be paid via Alibaba’s Post Post Pay service at our properties in China, allowing qualified guests to reserve apartments without paying a deposit and enjoy express check-out.
We are also expanding our global network with the support of strong capital partners like Qatar Investment Authority (QIA). Through Ascott’s fund with QIA, we have acquired four prime properties in less than a year in London, Paris, Melbourne and Tokyo for US$270 million. We are on track to achieve our global target of 80,000 units by 2020 through management contracts, investments, strategic alliances and franchises.
Choe Peng Sum
CEO, Frasers Hospitality
We can certainly expect more mergers and acquisitions (in the hospitality sector) to take place. The merger between Marriott and Starwood is a real game changer as they force other chains to re-evaluate their offerings and assess the need to join arms with other players, be it large or small chains, to better equip themselves for this increasingly competitive landscape.
This is exactly what Frasers Hospitality has done with the purchase of Malmaison Hotel du Vin group, two best-in-class hotel brands, doubling our offerings in Europe and further strengthening our global expansion plans to achieve our goal of 30,000 units by 2019.
Global expansion is very much on the agenda of Frasers Hospitality, and we are always on the lookout for growth opportunities, be it organically or through acquisition. The goal is to strengthen our position in cities where we already have an established presence and explore new opportunities in emerging markets with steady FDI inflows. Frasers Hospitality is open to acquiring established brands that may be small or even small brands that need to be rebranded and not limiting to just Europe.
Airbnb is here to stay and it would be foolish to ignore the impacts they have made on the hospitality industry. It has caused companies to rethink their entire distribution strategy and hotels are now looking to merge with distribution channels to improve their online distribution.
The entire consumer landscape of instant gratification and technology advancements, as reflected in the emergence of brands like Uber and Airbnb, has kept us on our toes. It has pushed us to enhance guests’ experience, be more efficient in responding to guests’ feedback and is a good reminder that our customers are at the centre of everything we do. This is vital as customers will vote with their feet as choices abound.
Richard Tan,
Vice-president, serviced suites, Pan Pacific Hotels Group
While the entry of alternative accommodation providers may mean more competition for the long-stay pie, it has also inspired us to rethink our value proposition and how we can continue to create and deliver value to our customers.
For us, this means focusing on the basics of good old hospitality and providing consistent, top-notch service to our guests. As a hotel company that owns, develops and manages 40 properties around the world, we are relatively smaller than other hotel chains, but that’s also an advantage because we can be closer to our customers and property owners.
Being in the digital age means we don’t need to have scale to connect directly with our customers; our online presence gives us global access to market to the rest of the world. This will become increasingly important as more people travel and the availability of alternatives like Airbnb will make travelling even more compelling.
In developing cities, long-staying guests are starting to appreciate the facilities of a hotel and recognising this, we converted a number of hotel rooms (e.g. Pan Pacific Tianjin, Pan Pacific Xiamen and Parkroyal Yangon) to cater to this rising demand. As one of the first few adopters of this “hybrid” model, we are in a good niche to also convert hotel guests to long-term residents at our serviced suites, which supports our growth in an organic manner.
We believe in pursuing partnerships strategically and seizing the right opportunity to venture into a new market. Our growth strategy focuses on building a network of hotels in key gateway cities and destinations, so location is one of the most important considerations.
For example, Pan Pacific Serviced Suites Puteri Harbour (opening 2018), which is located at a premium waterfront lifestyle development in Iskandar, Johor, sits in close proximity to medical and healthcare services, educational institutions and entertainment facilities. Pan Pacific London (opening 2019) will feature both hotel and serviced residences, and is located next to Liverpool Street station in the CBD.
Arthur Kiong
CEO, Far East Hospitality
To capture the interest of a new generation of travellers, corporate bookers and “bleisure” travellers, our service residences are providing more customised value-added offerings and differentiate our guest experience across our locations and serviced residence brands. This diversity not only enables us to address the different market segments but also provides our guests with an experience beyond the expected.
Our strategy is to provide all this at attractive price points with the prime locations of our serviced residences. In Singapore, for example, we have Far East Hospitality serviced residences in the Orchard district, Clarke Quay, Robertson Quay as well as Hougang, so our guests can choose the ones closest to their offices or the hot spots they would like to explore.
We just launched the Oasia Residence, the first Oasia brand in the serviced residence category, in Singapore’s West Coast near business parks and education institutions to meet the rising demand in an area where the current serviced residence supply is relatively low. Integrated into the Seahill residential development, the 140-unit Oasia Residence will offer full service apartments and facilities such as a swimming pool, gymnasium and a tennis court.
The Oasia Residence will add another 140 rooms to our service residences portfolio by the end of this year, coming at an opportune time as the region continues to mature and there is more demand for serviced residences from travellers.
We have several offerings under the Oasia brand that includes hotels (Oasia Hotel Downtown, Oasia Hotel Novena), hybrid models (Oasia Suites Kuala Lumpur, our first overseas venture for the Oasia brand), as well as serviced residences (the upcoming Oasia Residence).
Peter Henley
President & CEO, Onyx Hospitality Group
With the rising popularity (of Airbnb), travellers are increasingly introduced to home-style accommodation. This benefits operators like Onyx Hospitality Group, as we have a significant number of residence-style hotels and serviced apartments in our portfolio and pipeline. Our properties combine the convenience and draw of home-style facilities like fully-equipped kitchens, with the assurance and consistency offered by dedicated and professional teams.
As a fast-growing regional hotel company, Onyx offers a portfolio of brands. This includes Shama, a collection of serviced apartments in key city locations, as well as residential-style properties at selected Amari locations and Oriental Residence Bangkok.
Onyx has a rapidly expanding portfolio of 41 operational hotels, and another 20 in the development pipeline. We have a robust pace of new hotels signing, averaging 10 new deals being signed each year for Amari, Ozo and Shama.
Today, the group has an equal number of hotels within Thailand and internationally. We anticipate this ratio to transition towards 30 per cent within Thailand and 70 per cent internationally by 2018 as we continue to expand regionally.
We also recently entered into a strategic alliance with Singapore Hospitality Holdings to accelerate the growth of Ozo and Shama brands across the Asia-Pacific, with the aim of having 46 new hotels open by 2024.
Singapore Hospitality Holdings is helmed by hospitality entrepreneur Laith Pharaon, and the group’s hospitality investments include Amari Havodda Maldives (managed by Onyx), several projects with Soho House, and past experience with Six Senses, Hyatt and Four Seasons branded projects.
Marc Hediger
CEO, Lanson Place Hospitality Management
Lanson Place has specifically introduced a third business model called Lanson Place Serviced Suites to address the changing trends and needs of professionals, millennials as well as the younger families who are relocating within Asia-Pacific.
This lean, efficient and contemporary serviced apartment style not only provides a higher return in investment for developers but most importantly offers residents a niche lifestyle, no matter the location or purpose of their tenancy.
Smaller units are creatively designed with unique combined open living and working spaces, co-sharing public areas are the extension of their homes offering seamless connectivity throughout the entire development, ‘grab n go’ F&B concepts and resident activities will promote well-being but also offer more energising activities.
A majority of Lanson Place’s pipeline deals are for the Serviced Suites model, and the group will continue to keep abreast of introducing new technical design requirements to adapt to both the millennials and existing customer base.
Lanson Place Hospitality Management will continue to expand its portfolio predominately though strategic management contracts in key gateway cities across Asia-Pacific for all three core business models (boutique hotels, serviced suites and serviced residences).
The group is very much open to form a joint venture or an alliance with reputable partners in specific markets. A proportion of our properties already form varying owning structures and this has proved well for the brand with addition to developing future long term relationships in different countries.
Businesses such as Airbnb allows us to constantly review our distribution channels (where potentially, units may be offered through this source). And as legislation in various jurisdictions become more relaxed as a result of Airbnb, Lanson Place may look to target shorter-term business in some countries within relevant market conditions, ensuring it would not affect our strength of achieving longer length of stay and engagement with our residents homes.
This article was first published in TTG Asia October 2016 issue. To read more, please view our digital edition or click here to subscribe.
Additional reporting by Xinyi Liang-Pholsena
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