The journey is just starting for this Singapore-based hotel company, which has undergone a consolidation in the last nine months and is now ready to expand in Asia-Pacific with its own business-focused brand, Next. Jumabhoy talks Gracia Chiang through the birth process
Iqbal Jumabhoy
MD and CEO
SilverNeedle Hospitality
How did SilverNeedle Hospitality come about?
SilverNeedle didn’t start as a hospitality company, but as a concept looking at certain gaps in the marketplace. The Nadathur family led by Anand (son of Nadathur S Raghavan, co-founder of Infosys) acquired a boutique hotel company in Thailand known as Ativa Hospitality, built a platform here in Singapore by hiring truly top people from major brands, and made an acquisition in Australia of Constellation Hotels, which is a fairly stable, much larger group with a number of brands spread throughout the Australia and New Zealand (ANZ) region. It’s important to know where the name comes from. We’re an Asian company and it’s the best tea in the world; it’s carefully selected. Tea is also hospitality.
How did you get involved?
I got to know Anand when I was leaving Rendezvous (Hospitality Group, as CEO). I was looking at an acquisition deal and needed an equity partner; he liked the deal and we liked each other, but the deal didn’t happen in the end. We continued to look at other things together; the second deal we went all the way to the finish line, but it was a bid to buy a company.
Then he said you know what, I’ve already made commitments to invest in a platform based on my concept for hospitality, is there something that we should do together? After a lot of discussion, I agreed to come onboard early this year.
What have you been busy with?
Harmonising the platforms. The task was to create a single company out of all of these. I had to merge them and make sure that we ran on a common management system and had a common philosophy. We completely co-mingled people so it would not be organised as three companies but a single business with different divisions.
I joined in January, and by March I called a bunch of shakers and movers within the company into our hotel in Chiang Mai and said let’s sit in a room and talk about corporate culture and DNA. From there we created a single vision, mission and set of values, as well as strategic pillars. That was quite a landmark event.
Then I realised they were running on different business plans, so we created a unified one by April/May to get through 2012. We kicked off our strategic planning process in early September and we’re hoping to have a five-year plan by the end of October.
How will SilverNeedle grow?
First, we’re looking very critically at the brands in Australia (Chifley, Australis, Country Comfort and Sundowner). We’re also taking the Next brand into Australia (the purchase of Brisbane’s Chifley was recently completed and the hotel is scheduled to reopen as the first Next property in 2014). Second, we’ll also grow at least a couple of the brands in Asia; we believe there’s room for our Chifley and Next brands. Third, we’ll continue to grow our boutique hotel business, generally in Asia. We’ve already got four hotels operating (two in Bangkok, one in Chiang Mai and one in Luang Prabang).
Tell us about your flagship brand.
The Nadathur family and I felt there was an opportunity for a business-focused hospitality brand, i.e. hotels for you to do business and hotels for business people to have leisure time. This is a niche.
The product will be substantially different and fairly technologically advanced for the industry. We’re still finalising the concept but what I can say is that Next is entirely business-focused in terms of its features, concepts and services. It’s geared towards the 20something-to-50-or-so age group. It will have some meeting facilities but a lot of facilities for travelling professionals to live and work comfortably. It will also have F&B concepts that service this market. Hotels will have approximately 200 rooms and the brand is positioned as four- to four-and-a-half-star.
Why not a five-star?
According to studies of business travellers, the highest repeat stays and the highest spend are not in the five-star category. It may sound really odd but it’s because you have a fair spectrum of business travellers in the same company, so a product like (Next) actually brings them all together in the same location. I stay where my colleagues stay. It’s rare that I would stay in a different hotel.
Is your target still 10,000 keys in five years?
I think that’s feasible. We’re already close to 5,000 keys, with almost all in ANZ except about 200 keys in Asia. It’s heavily skewed but I foresee a more balanced portfolio. Within Australia, we continue to be growing fairly quickly. I think this year alone, we’ve added seven properties and we’re hoping we’ll add another two by year-end. The second part is bringing (the brands) into Asia, as we’ll need to see how best to proliferate them. Outside of ANZ, we’re looking at South-east Asia, South Asia and Greater China. At the moment we have business development resources in the first three, and we’re hoping to have some in Greater China too.
What are your lines of business?
Our business streams are in three areas: development, management and investment. The Nadathurs took a very refreshing attitude and built a very high-quality development team. So today we can parachute somebody in and develop a property ourselves. There will also be management of hotels with clear concepts. And if the opportunity comes about, we’re not only prepared but like to invest.
What about distribution?
We’re launching our own GDS code in early October and will be promoting this to the industry at ITB Asia. We aim to get more people to book directly with us. We already generate 20-25 per cent of business through GDS and booking engine platforms, about half through travel (consultants) and OTAs, and the remainder from direct and meeting planners.
What have you found most challenging during your time here?
Getting people to operate as a single entity. Regional cultures are only a veneer. The most difficult to change is the corporate culture where people have been doing things in a particular manner, but I think we’re moving along that path quite nicely. The good news is that they were similar businesses and we have good people. Constellation existed for 30 years, my team here in Singapore was built up in under two years and the people in Ativa had worked together for five to six years.
What kind of boss would you say you are?
I would like to think that I’m reasonably structured. Once people gain my trust, I give them a fair amount of autonomy. I keep certain matters so that I can stay in touch with business. I travel, so I do a lot of MBWA (management by walking around). I think some of them think I’m a little too tough but I think I’m actually fairly benign. I give a lot, but I demand a lot as well because I want things done yesterday.
This article was first published in TTG Asia, October 5, 2012 on page 8. To read more, please view our digital edition or click here to subscribe.
