Aug. 6--Marketing chiefs of the newly-formed Asian Hotels Alliance (AHA) are to meet in Pattaya today to work out finer details of how the new group will be financed, structured and operated as it strives to confront growing competition from multinational chains. 

The group, comprised of Dusit Hotels and Resorts (Thailand), Landis Hotels and Resorts (Taiwan) , Marco Polo Hotel Group (Hong Kong), Meritus Hotels and Resorts (Singapore) and New Otani (Japan) was officially formed on July 27 and hopes to become a powerful marketing association that will help retain and raise its individual and combined market share. 

The founding members are more or less family-owned companies "committed to maintaining their independence", said Dusit Hotels' executive director Chanin Donavanik. 

By pooling their resources, the AHA members hope to confront the rapid advances of the multinational hotel companies whose financial and marketing power could, over the long term, threaten the survival of the smaller local and regional chains. 

All AHA members are strong in their respective home markets but relatively inconsequential players globally. The New Otani is the biggest with 21 properties, followed by the Dusit (20), Meritus (13) and Lanis and Marco Polo (seven each). That is a total of about 24,000 hotel rooms, mainly in the gateway cities of 10 countries but also including a small number of resort properties. 

The geographical distribution shows clear gaps in places like the Malaysia, the Philippines, Korea, Indonesia, China, India and Australia. 

However, there are plenty of small and medium-sized hotel groups in these countries that are facing competitive heat from big-league hotel chains and, as a result, could join the AHA as an additional source of international business, marketing and networking. 

Multinational American and European hotel groups are hungrily eyeing the prospects of expanding their brands across the Asia-Pacific region through a variety of options: franchise, management, marketing, reservations or even equity. 

Many Asia-Pacific hotels owned by property companies hit by the economic crisis are being offloaded gradually to international investors who will invariably turn them over to the global groups to run, which will put further competitive pressure on the local and regional groups. 

Similar to the airline alliances, the AHA is hoping to leverage the brand names of each of the five members to boost their joint marketing profile and build profitability. This will involve setting up a joint reservation system, pooling loyalty programmes, joint advertising and joint participation at international trade shows. However, like the airline alliances, none of this is going to be either easy or inexpensive. 

One critical issue will be the division of the budgets for the various activities and projects. At the moment, it has been agreed to do this on a pro-rata basis pegged to the number of rooms in each group. However, costs of other marketing activities such as training are usually shared. Others will be paid for by the hotels themselves -- such as the 80,000 copies of the first joint brochure that was funded entirely by Dusit. 

Just setting up a reservations system could be hugely problematic. A check of the group's web site, asiahotelsalliance.com, indicated widely divergent booking methods. Some of the hotels have reservation engines powered by groups like Calypso and Pegasus while others are less sophisticated and cannot provide instant confirmations. While web pages of some hotels came up in a flash, others yielded error messages or took an excessively long time to appear. 

Things could get tougher as the group looks at other issues such as pooling of loyalty programmes and sharing of benefits, all of which involve considerable administrative and technological costs. By comparison, opening overseas sales offices and joint advertising could be relatively simpler exercises. 

Brand building is the current priority. Brochures have been placed in all the rooms of member hotels. Official letterheads, name cards and other publicity material are being rebranded to include the AHA name. 

Mr Chanin said that becoming an AHA member would not impede growth of plans. If Dusit wants to expand in Japan under its own brand name, or the Marco Polo in Thailand, there will be no objection. 

Mr Chanin said new members were welcome but each new member would need to have at least a few hotels under its wing. Individual hotels would not be allowed. The founding members have agreed to keep the group small but effective, at least initially. It will also remain an essentially Asian group. 

He said he had worked on the project for about a year, based on an earlier group called the Prestigious Hotels of Asia, which had a similar philosophy but was somewhat ahead of its time and did not last long. 

"I like doing things that people say cannot be done," Mr Chanin said. He set the Dusit on an expansion course in the early 1980s. In 1994, he became the first Asian hotelier to buy out a major European group, the Kempinski. 

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(c) 2001, Bangkok Post, Thailand. Distributed by Knight Ridder/Tribune Business News.