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Hilton Takes it to the Hilt with Brand-busting
Kuala Lumpur Hotel

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By Steve Shellum, Publisher/Editor, HOTEL Asia Pacific, June 2005

“You sure this is the Hilton?" asks a frequent traveller as he enters the riotous lobby of the brand-busting Hilton Kuala Lumpur. "It sure don't look or feel like a Hilton ..." 

You can say that again. The group that introduced international hotel management to Asia more than 30 years ago is shedding its conservative [some might say staid] old image and re-casting itself as a cutting-edge, innovative - even fun - brand for the 21st-century guest. 

With 42-inch flat-screen TVs in every guest-room, mini LCD TVs embedded in shaving mirrors, glass bathroom walls that slide fully open, innovative restaurants and the funkiest bar in town, the Hilton Kuala Lumpur is endowing this dowdy old broad of a brand with a new adjective: sexy.

It's a stunning property that has sent a buzz through the industry - and could set the scene for future Hiltons in the region. 

The 510-room hotel, located at KL's Sentral Station, was a long time in the making. Conceived before the Asian financial crisis, it was put on ice for nearly seven years before its grand opening at the end of last year. 

But the long delay meant that Hilton and the Japanese owners had plenty of time to get it right. 

"We had a great opportunity to develop a special product - and what you see today is not what was first planned seven years ago," says GM Kees Hartzuiker. "We pretty much had a blank piece of paper. 

"With the guestrooms, for example, we didn't have to have the cupboards on the right, the bathrooms on the left and the TV cabinets right in front of you.

"So we really are quite different. Instead of putting a solid wall between the bedroom and the bathroom, we put in a glass wall - some resorts might have already done that but, for a city hotel, I think we might be the only ones who have gone that way. 
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"Then there are the materials used - such as wooden and granite flooring, with no carpets in the bedroom - and that gives the guestrooms a very residential feel."

Hartzuiker is aware that having wall-mounted flat-screen TVs in every guestroom [which measure from 388 sq ft to 624 sq ft] is a big talking point, but he also knows that it's a fleeting advantage. 

"There's no doubt that some of what we have right now is cutting edge - who else has a 42-inch plasma TV in every guestroom and an LCD screen in every bathroom? 

"It's a lovely initial attention grabber and certainly has the wow factor, but I don't want us to be known as the hotel with the 42-inch TVs.

"Technology is very fast-evolving, and I think that some of our high-tech highlights will be almost standard in a couple of years.

"From a design point of view, think of the space the TVs save - guests don't walk into the room to be confronted by a huge TV cabinet. 

"Plasma and LCD TVs are becoming more affordable, and if you take the cost of a normal TV, the cost of that cabinet and the cost of another square metre of space then, all of a sudden, it starts to make sense to spend on plasma. It's still expensive, but it's coming down every month. 

"It's something that couldn't even have been considered a couple of years ago, but today hoteliers are starting to consider the practical considerations of what will work."
Hartzuiker says the hotel's design innovations will stand the test of time. 

"But we might have to think about redoing it all 10 years from now," he says.

Despite such high-tech goodies, Hartzuiker made it very clear to his team that they needed to get "much more substantial messages" out to the market.

The hotel has also taken a different approach to its F&B operations. "Typically in a hotel, there are three, four or five restaurants dotted around - maybe a coffee shop, a fine-dining lounge and perhaps an outsourced outlet. That's a fairly typical scenario, and we didn't want that. 

"We thought, 'Let's make sure it's not boring'. We needed to create an extreme experience and a special ambience.

"So we decided to stick them all together in one space, give them all open kitchens, make the best use of the space and create a bit of activity. 

"There's nothing particularly new about that, of course, but the crucial thing is its location. No one can miss it - it's in your face."

In food-mad KL, Hartzuiker realised that cracking it with the locals would be a case of make or break. 

"I have been paranoid about satisfying the local community," he says. "From a business point of view, I depend on them, but I also believe that most business travellers don't want to sit next to other business travellers - they want to be part of the local scene. 

"They don't want to be in a boring environment - they want to feel they are in Malaysia."

The result is Studio - a vibrant collection of restaurants that dominate the lobby and are ablaze with colour and activity. 

"We've given Studio its own identity, with extensive marketing and branding," says Hartzuiker. "We were also very keen to get a different type of team member working for us, particularly in those areas - what's the point of creating a hip environment if you have a man with a white cloth standing there?"

"We make a lot of profit on F&B - our restaurants are full every lunch and every dinner, and many of them do two or three sittings every night. Our biggest challenge is that people can't always get tables. 

"Now, of course, we need to continue to deliver, and I think we will because, if you look at our F&B concepts, we didn't do anything new or strange that people had to be educated about. 

"We're giving them noodles, Japanese, Chinese and fine dining, which are very safe routes, because everyone knows that, say, a Chinese restaurant will do very well. 

"I like to think the way we've done it - the setting, the details - is very different, and that's what makes us so special. I can look you in the face and say, 'We're doing more than any-one else in town'. Other hoteliers are calling every day to find out what our revenue is - and they can't believe it. 

"But I've been in the business too long to claim that we've done it - we've still got months and months of hard work ahead of us to prove to ourselves and the community that we can sustain it. 

"I was always fairly confident on the room side, but on the F&B side it's not so easy, especially in a place with so much going for it in that area." 

It's just as well that the hotel's F&B profits are soaring. Its opening room rate was just 265 ringitt (US$70) - a ridiculously low figure for such a superb property. In its first week of opening, it was doing 73% occupancy.

"After opening, we were averaging 40% on rooms and 60% on restaurants and banqueting," says Hartzuiker. 

"We are now starting to track that to 45-55 and I think that in the next six months we'll be running at 50-50.

"Under normal circumstances, a hotel like ours should be able to do close to 70% year round. Our pricing will very much depend on demand and the volume that we are able to generate.

"Everyone continually faces the problem of generating cashflow, particularly in Kuala Lumpur where the oversupply of hotels has given customers lots of choices. Many hoteliers were not able to put their foot down and say, 'Hey, hang on'. 

"Now it's biting us back because, if we don't generate enough return, how are we going to persuade our owners to reinvest in keeping our products up to date to stay competitive within the market? 

"There has to be a growth in rate, because there has to be a growth in profitability of the property, otherwise the owner will say, 'You may think that your carpets are too old but, I'm sorry, you're not making us enough cash ...

"It's a mindset. I see what people are willing to pay for an airport limo and they seem to sort of accept it. 

"Then you should see how they quibble about the room rate. Well, excuse me, they are spending more money on the limo transfer than on an overnight stay at one of the top hotels in the world ...

"I'm very happy that I was able to go in straight at the upper end of the scale, and I like to think that we at the Hilton are doing our bit. 

"Actually, it was good for the market, because the last thing the city needs is a new hotel dumping the rates."

Hartzuiker, who worked for Hilton in Dubai for a number of years before transferring to Kuala Lumpur, adds: "What I charged for breakfast there is more than I get for my rooms here."

Is the Hilton Kuala Lumpur the shape of things to come for the brand in the region?

"Not necessarily," says Hartzuiker. "We will use the property to see what we can do and what can work in other places. 

"In some of the things we do there are no rules, but we are not here to say, 'Look at this - now go out and copy it'. 

"A lot of things I've done here are learning points, things I have learned from my other openings. 

"This is truly a combined effort, but it doesn't mean we're saying it's the way to go - just that this is what works for us. But, of course, we will go on evolving."

Massaging the staff

Hartzuiker has introduced a number of innovative staff initiatives, and is proud of the fact that only 40% of his team had ever worked in a hotel before.

At the front desk, for example, a dozen key staff were recruited from Malaysian and Singapore airlines. "And that's not just that they saw our ads - we went after them because I wanted that level of maturity, presentation, sophistication and front desk experience," says Hartzuiker. 

For the restaurants, some staff were hired from Starbucks, while others had no F&B experience at all. 

"We wanted to make sure we were connecting with the next generation, so we did a variety of things very differently. 

"One was the way we put together our recruitment ads, which were not your typical hotel-staff-wanted type, then we put a lot of attention into the uniforms - I wanted people to feel good in them, almost as if they were going out somewhere special. I didn't want them to feel uncomfortable walking around in a recognisable uniform. 

"We had an image consultant come in to advise staff on hair styles and make-up - they still come in every week to do haircuts for free. 

"We also have a room called The Surgery, where we give staff free pedicures and manicures. 

"When it came to the staff canteen, I said to the owners, 'How much money are you planning to spend in here? Could you just give me the money and let me sort it out?' 
"Although no customer will ever go up there, it's decidedly different from what you would find in other hotels.

"Then we opened a staff relaxation centre, with massage chairs. The initial response was, 'Wow - isn't that expensive?' But no, you wouldn't believe the amount of free advertising we have had from that - people were saying, 'You should go to the Hilton, they even give their staff massage chairs!' 

"It's about how we as a team interact and how we show a bit of respect to each other. It doesn't matter where you are in the hierarchy - just that you walk around smiling.

"I've been with Hilton all my life - I feel very much part of the Hilton culture and all the things that it stands for. But a fish always swims from the head so, although there are lots of opportunities in a new build and I've been given a lot of tools, I don't believe in a complicated managerial position. 

"I believe in happy team members and happy customers, so let's keep it simple. 

"I recognise a responsibility to spot the extra step that will make the team that little bit better, that will make the customer that little bit happier. "

Marketing blitz pays off handsomely

In the week before opening and the two weeks following, the Hilton Kuala Lumpur launched an intensive direct-mail blitz - with an astounding six million pieces going out. 

"We did lots of campaigns with HSBC, all the airlines," says Hartzuiker. "If you were a traveller from, say, Singapore, you would have read the Straits Times with our Amex promotion in there, you would then have picked up the International Herald Tribune on the plane with a four-page wrap-around supplement on the hotel, and you would have landed at Kuala Lumpur International Airport, where you would have been exposed to our mock-up room. 

"We developed a highly targeted direct-mail campaign with a real hook and tangible assets, such as complimentary rooms for Amex cardholders. 

"I knew I had such a wonderful product so I said to the local community, 'If you spend 500 ringgits, you get a room ...' 

"And guess what they were doing when they were staying with us? Spending money on F&B. So we were driving them into the hotel, exposing them to our key product and making money out of them. It also gave us tremendous word of mouth. 

"Much of the success we have had was not just down to luck - it involved a lot of preparation, time and energy."



Copyright: HOTEL Asia Pacific. The lastest edition of the multi-award winning HOTEL Asia Pacific can be downloaded in full, in PDF format, from www.hotelasiapacific.com. It is free to hospitality professionals, and requires a simple, one-time registration. 
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Contact:

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Hotel Asia Pacific
Steve Shellum
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steve@hotelasiapacific.com

 
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