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Gameplan for Asia Pacific Five Goals for Increasing Revenues |
Hotel Asia Pacific
By Steve Shellum
June 2002 Let's get the numbers out of the way first. Ever since Bass sold off its UK brewing business and re-emerged as Six Continents Hotels, it has been on a non-stop buying spree that has earned it the title of �the world�s most global hotel company�. Depending on how you look at it, the numbers involved look mightily impressive � or mightily scary. The sale of its brewing assets early last year gave the company a massive
war chest of nearly US$4 billion � and it has not been slow in spending
it. It has been on the acquisition trail with a vengeance, buying up other
brands or individual properties with breathtaking speed.
The fast-and-furious buying spree has turned the former Bass from an operator of low- to mid-market Holiday Inns into a multi-branded industry giant to be reckoned with � and, some might argue, feared. But its strategy appears to be paying off: its annual gross revenue
for 2000 increased 30% to $2.5 billion, while its operating profit increased
18.2% to $584 million.
Last month, Six Continents Hotels� chairman and CEO Tom Oliver was in
the region, together with the company�s Asia Pacific boss Richard Hartman,
senior marketing executives from Atlanta and London and GMs from its major
properties for a brand-brainstorming session at the Hotel Inter-Continental
Hong Kong.
�Since acquiring Inter-Continental, we have seen a lot of changes across the brand, not least of which is the acquisition of this property,� says Oliver, in the recently unveiled club floor of the Hotel Inter-Continental Hong Kong. �We are spending money on refurbishing and updating the looks of many properties to provide a more contemporary feel, while keeping classical ideas and looks. �Take this hotel, for example. It is not a heritage building � all the walls are granite, and that was OK 20 years ago. But it was time to give it a more contemporary look, particularly in the lobby and other public areas. �The guestrooms, though, are in good shape, and our basic motto is: if it ain�t broke don�t fix it, but if it needs oiling, then provide plenty of oil.� Commenting on the hotel�s new executive-floor lounge, Oliver says: �It�s about as good as I�ve seen anywhere.� Six Continents has immense faith in the future of the Inter-Continental brand, which was established by Pan Am 56 years ago. �It was clearly the leader in international hotels, and It forged a unique position of leadership,� says Oliver. �It had great buildings in great locations, but not enough investment to bring it to its full potential of guest expectations. �We felt that, if we could get ensure great and consistent service to the brand, it would again become the leader in its sector. It is an extremely powerful brand, and its resilience is amazing.� Since acquiring the brand [it�s the fourth owner in 56 years], Six Continents has removed some properties that were not up to scratch � including the one in Colombo - from the portfolio. �We are still repositioning the hardware of the company, and the next step is a series of service enhancements, and ensuring that all GMs and senior executives are clear about how we see the long-term future. �The upper-upscale brands [eg, Four Seasons and Ritz-Carlton] have very high rates of staffing which demand very high room rates. But what we are concentrating on with Inter-Continental is driving a really excellent hotel product at more sensible rate levels. Inter-Continental is the best of the upper-class hotels and better value than the top luxury segment. �We see it appealing much more to the person who is extremely successful and is looking for a hotel that is alert to the practical aspects of their requirements.� The acquisition of the Hotel Inter-Continental Hong Kong was a highly strategic move, designed to put the brand firmly on the map in the region. �The capital level of commitment we have shown for the brand is unprecedented in Asia. Before that, people didn�t take us very seriously, but we have shown we put our money where our mouth is. �We are not [Hong Kong tycoon] Li Ka Shing or [Singapore tycoon] Kwek Leng Beng, but we know you can�t have zero assets � no one will take your seriously.� There are still some gaps in the brand�s portfolio in the region � most notably Melbourne and Bangkok. �We have to ensure we have absolute control of an asset. We will not buy our way into a market at any cost, but we are willing to invest in the right properties at the right time,� says Oliver. Although it is the most high profile, Inter-Continental is just one brand in Six Continents� growing family � and the company is equally bullish on its other assets, particularly in Asia Pacific. In 1994, it re-established Crowne Plaza - originally introduced in 1983 as a product extension of Holiday Inn - as a separate brand to better reflect its upscale market image and business-traveler appeal. Today, Crowne Plaza Hotels and Resorts offers upscale, good-value accommodation in more than 150 hotels in 40 countries. The properties � �designed to meet the needs of today�s experienced traveller� - offer �superior� meeting facilities, professional conference staff, extensive business services, quality fitness facilities and a variety of recreational activities. �A Crowne Plaza would probably work in every serious business centre in the region,� says Oliver. The group also has big plans in Asia Pacific � particularly in China and India - for its Express by Holiday Inn brand, which currently has more than 1,223 properties in 17 countries. �The brand is rapidly expanding globally, and we are placing particular emphasis on brand development in Asia Pacific,� says Oliver. The brand offers �a fresh, clean and uncomplicated hotel for the value oriented�, with reasonable rates, complimentary Continental breakfast bar and a �meaningful� selection of amenities. Another brand set for rapid expansion is Staybridge Suites by Holiday Inn, which was launched in 1998 and currently numbers 34 properties in two countries. It is described as �a distinctively different hotel concept designed to meet the particular needs of travellers around the world who require accommodation for five nights or more.� Rooms include many residential design features, including a large, well-lit work area, kitchen facilities and interactive TV. ASIA Pacific is key to the group�s overall development � and China is key to its development in Asia Pacific. �The region presents deep investment opportunities for us, and we will continue to propel our growth here through a focused distribution strategy including hub-and-spoke development in key markets, including Beijing, Shanghai, Hong Kong, New Delhi and Mumbai,� says Oliver. �We are in Asia Pacific for the long run, and aim to build a suite of high-growth, high-return hotel brands that are market leaders. �Our acquisitive nature is anchored by our vision to transform individual hotels into powerful international brands and provide a rapid increase in quality, consistency, culture and expertise. �With the increasing amount of itinerary planning taking place over the internet, strong brand awareness and exceptional brand equity will be key to occupancy, revPAR performance and growth throughout the region. �Our corporate strengths in building, differentiating and protecting brands will place us at a distinct advantage in the years ahead.� In December 2000, the group announced it would invest more than $70 million to establish or refurbish 14 new Inter-Continental hotels in five markets in the region by the end of this year, including China, India, Malaysia and New Zealand. It is now turning its focus increasingly on China. �We are continually opening hotels in China, where our existing dominant market position is now being augmented with depth in primary and secondary cities,� says Oliver. �These gateway cities will become important both as a destination and as a market of origin market in the near future. �China represents a strong investment opportunity for Six Continents and will help drive growth for Asia Pacific. With the opening of the country as a trading hub, growing resort-destination travel and the 2008 Beijing Olympics, we expect a substantial increase in business and leisure activity.� The company � in its Bass days - was the first international hotel chain to enter China, with the Holiday Inn Lido Beijing in 1984. Today, the group has 11,000 guest rooms across 39 hotels in major cities in Greater China, making it the largest international chain operator in the market. It has 11 projects under construction, and is looking for more opportunities in Shanghai � both Pudong and Puxi � as well as Chungking, Dalian and Shenyang. It is also interested in Guangzhou �but there is not anything going on there right now�. The company has sales teams deployed across four key cities in the region � Tokyo, Hong Kong, Singapore and Sydney � with contract representation arrangements in Taipei and Seoul. �We are in Asia for the long haul, and our commitment to the region goes beyond simply putting up hotels,� says Oliver. �Having earned the right to call ourselves �the world�s most global hotel company�, our goal is to continue to increase our reach and to not only build guest satisfaction, but also guest preference. �For this reason, we place significant emphasis on achieving superior levels of quality across each of our brands. This, in turn, leads to increased capital investments, renovations and continuous quality improvements, all of which point to our immeasurable commitment to the region.� |
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Priority Club powers ahead
Six Continents� Priority Club Worldwide has a new blueprint � �Experience Engineering� � aimed at �quietly building a power brand�. It aims to:
The company claims its programme is the fastest-growing in the industry, with 3 million members signed up over the past 18 months. It also claims it is the only programme offering personal-preference award redemption, that it offers the �richest redemption choices with the largest portfolio�, has the highest mileage-earning across any hotel programme portfolio and is the largest earning and redemption programme in the luxury tier. Members earn points towards free room nights, as well as any of 260
reward options and �virtually unlimited� personal preference choices, or
earn frequent-flyer miles with its airline partners. Points redemption
is instant through its �E-Wards� programme.
Gold members - who stay 20 qualifying nights per calendar year at any
Six Continents brand hotel - receive a 10% bonus on base points, while
Platinum members � who guarantee 60 qualifying nights � receive a 30% bonus
on base points.
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Hotel Asia Pacific Steve Shellum 15B Casey Building 38 Lok Ku Road Sheung Wan Hong Kong Tel: +852 2882-7352 Fax: +852 2882-2461 http://www.hotelasiapacific.com [email protected] |