TagsAsia Hotel Investment, Hospitality & Travel, Industry, Jenny Lo
Attendees at the first day of the Asia Hotel Investment Conference (AHIC) in Macau were treated to plenty of insightful commentary and expert analysis from industry leaders.
For those who couldn’t attend, we collated the invaluable advice from the panelists and pundits. Below, the Top 10 tips for would-be hotel owners and investors.
10. Understand your market segment: Despite what a feasibility study may suggest, owners and investors need to be clear about who their market is and what the customers’ expectations are. “Identify the services that are relevant to your customers,” explains Michael Hobson, Chief Marketing Officer for Mandarin Oriental, “and then question how you can deliver these better.”
9. Trust your own judgment: “”Never discount your gut feeling,” advises Elaine Young, EVP & MD of the Onyx Hospitality Group. “I’m a strong believer in listening to your sixth sense.”
8. Don’t expect quick returns: “Investment on this scale is not for the light-hearted,” adds Young. “It’s a long-term proposition. For a five-star property, you can expect to wait at least a decade before you start to see a return on investment.”
7. Question the motivation: Some potential owners are driven more by ego than by business sense. “Private investors have different expectations,” says Young. “This can be an advantage, though, because they’re often prepared to spend any amount of money to impress their friends.”
6. Don’t be seduced by the numbers. While profit and loss statements can serve as a guide, they shouldn’t be taken at face value. “Tax strategies and government policies can impact development,” notes Lyndon Wheeler, Direcor of Real Estate and Lodging Finance for Societe Generale.
5. Be flexible: Market conditions can change dramatically. Political crises, natural disasters and government policies can impact a development—and make feasibility studies obsolete. “Any feasibility study needs to be constantly updated,” says Steve Kleinschmidt, President of Marco Polo Hotels. “You need to be disciplined to ensure this study reflects current trends.”
4. Offer a unique proposition: “Even in a saturated market, if you can offer a point of difference and deliver on that brand promise, you’re more likely to be successful,” says Symon Bridle, SVP of Operations, New World Hospitality.
3. Manage the Brand: “The industry loves terms like ‘Branding Standards,’” says James Stuart, Managing Director of The Brand Company. “Some operators slavishly adhere to these so they can produce carbon copies of their properties. But ‘branding standards’ are really just operational standards. Brands are not about standards – they’re about being unique. A core brand idea needs to be adapted for new situations and this is critical for owners to understand.”
2. Recognize the challenges: “Owners need to recognize new changes and mobile strategies,” notes Brett Henry, Vice President of Marketing for Abacus. “For example, 20% of AirAsia’s bookings now come through their mobile channels. Other operators, though, simply reformatted their website for mobile devices and lost business. People who use mobile apps have different behaviours to those who browse websites.”
1. Be objective. “There’s a danger when investors fall in love with a development and lose objectivity,” says Wheeler. Before they sign on, investors “need to test various scenarios and have internal reviews to ensure the development is on track.”
The Asia Hotel Investment Conference Continues Until Friday, 20 May. For more information, log onto: www.ihif-asiapacific.com
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