Far East Organization (FEO), a household name property player in Singapore, now moves like Jagger in building hotels in the city, which is red-hot for investors. Raini Hamdi talks to Raphael Saw about how FEO is rocking the Singapore hotel sector
Raphael Saw
COO, Hospitality Business Group Director, Hospitality Operations
Far East Organization, Singapore
People ask me if hotels on city fringes are good investments. What’s your experience with Oasia Hotel in the Novena area since it fully opened last October?
It’s a 428-room hotel in an area that is convenient – just two MRT stops from Orchard – and emerging, with residential developments but also more offices.
It is also emerging as a medical hub, with The Parkway Group settling in sometime in the second half of this year.
We see that as the hotel gains better awareness, more corporates are coming. And, being two stops from Orchard, the leisure market is coming too. The mix is 50:50 but we want to grow the corporate business; 60:40 is ideal.
What’s the room rate and geographical mix? Is it going as you thought it should?
Over S$200 (US$159). We’re ambitious, so we can do better.
Time is needed for the product to be known in the marketplace. Once more people know about the good design, nice environment and the convenience especially, we should be able to build the rate up to S$250.
The mix is representative of arrivals to Singapore – the regional markets, Europe and the US.
The hotel also launched your new brand, Oasia. What’s behind the name?
‘Oasis’ and ‘Asia’, so Oasia. It’s an upscale brand and the promise is, when you stay in Oasia, you will find your own oasis after a long day, with Asian hospitality being part of that experience.
A destination like Singapore will keep you busy, whether on business or leisure – you need an oasis to go back to. This is why our Club floor, for example, is one of the few in town that has its own dedicated pool and, if you look out, you will see a lot of greenery outside.
As well, a typical characteristic of Oasia is an interesting design by an internationally-renowned designer. (For the first), Super Potato designed the public areas and Club floor.
Ok, but you also have a brand called Quincy and in three years there’s just the one in Orchard, and the Village brand. How do the three brands stack up?
Quincy has touches of a boutique hotel. Its roomcount is smaller (108 rooms), so its service is more personalised. It has more design emphasis and is a bit more edgy in terms of experience.
The rate is higher than Oasia (S$300), partly because it is an all-inclusive product although guests do have a choice to opt for just room, breakfast and Internet.
The Village brand, on the other hand, is about hotels that are in interesting neighbourhoods. We bring neighbourhood touches into the hotel and also get guests to experience the wealth of the neighbourhood, be it culture, food, shopping, or the heritage of Singapore.
(Editor’s Note: There are four Village hotels and four Village serviced residences currently.)
“If we need to break traditions, we are prepared to do so. It probably means we have to work harder…”
So how are you growing these brands?
We have many new projects. We’ve just launched PS/100 (in the CBD, Tanjong Pagar area), a mixed-use development comprising office space and our second Oasia Hotel, a 300-plus room, opening in 2014.
We will also be converting the shophouses at Far East Square (an FEO development), which are currently offices, into a charming, 37-room boutique hotel. We’ve not finalised the name yet, but it will be along the lines of what Far East Square is.
It should open in the first half of 2013. There is always a shortage of hotels in the town area and the hotel offers a different choice in an interesting location which is right in the CBD.
We’re also building a new tower block, 300-plus rooms, in Far East Square itself. It should open in 2014-2015.
Will that be an Oasia?
We’re having internal discussions about it.
Why do you invest on new brands and not fit your development into these brands ?
We will always consider using the (existing) brands but we won’t insist on it, sometimes because the environment and the product we are creating do not fit into the brands.
Would I be right to say FEO is not traditional in its hotel development approach?
(Laughs) Of course we will still follow some of the traditions – there are certain reasons why certain traditions are there.
But, as I said, if we need to break traditions, we are prepared to do so. It probably means we have to work harder in getting the awareness (of the hotel) out, but if you have an interesting offering or product, it can be done.
What is more important, brand or product?
They are both important. You create a brand because you want to offer a consistent experience and ride on scale of distribution, etc, but operation is equally important.
After all, you’ve made a promise; so you have to deliver.
This is an interesting part of our industry, especially if you are growing, and in an environment like Singapore, where labour costs are rising.
There are challenges in recruitment and in space planning – the need to have efficient space to serve guests has become even more important or you’ll end up hiring more people to do the same job.
This is why we work hand in hand with (FEO) project development (which also does residential and retail projects).
How does having the property development background help in hotel development and vice versa?
We’re not afraid, for example, to venture outside the traditional catchment areas, although we are also in the city centre.
We have been developing properties for over 50 years, so we have a good understanding of where the different locations are, what’s happening there, what are the industries that can support the hotels.
Singapore has a better hotel market now. More visitors are coming and (the government is) growing the population. More businesses are setting up operation in Singapore and they have various accommodation needs.
We have hotels if their need is for short-term, transient accommodation, or corporate leasing where they can rent our serviced apartments for two years.
And if they like Singapore and want to call Singapore home, we hope they look at our (residential) properties for investment. So it is all inter-related.
Why are you not expanding overseas?
We are interested, but we really want to build our capabilities here. We now have close to 2,400 hotel rooms and more than 1,200 serviced residence units, with three more hotels and one serviced residence in the next five years.
We want to take full advantage of Singapore as a growing destination and we want to build on our size, scale and talent.
This article was first published in TTG Asia, March 23 issue, on page 7. To read more, please view our digital edition or click here to subscribe.
