News for the Hospitality Executive
New World Hospitality Revitalizing New World Hotels
with New Visual and Service Culture;
Investing $1.1 billion with Plans to Double by 2015
HONG KONG, Oct. 25, 2010 -- Looking at the industry today, hotels have become commoditised and product-oriented -- but the truth about hospitality is that it's all about relationships. It's the connection between the host and the guest that makes a relationship special. So New World Hospitality’s vision is to revive the original meaning of hospitality by re-introducing a fundamental philosophy and simple concept -- Relationship Hospitality. Simply put, Relationship Hospitality focuses on building strong and lasting relationships with guests, employees and its communities. This is the heart and soul of New World Hospitality’s culture.
Recently, Sonia Cheng, executive vice-chairman of New World Hospitality, held an exclusive interview with Elizabeth DeMotte, corporate director of brand management and communications. The interview is as follows:
Q. What are your goals? How will you measure success?
A. Our goalsover the next few years are threefold: First, we would like to establish ourselves as a global hospitality player that has marked a significant space for ourselves in the market. Second, we would like to build a culture that will inspire our associates and be one in which we share the same goals and aspirations so we can become an employer of choice. Third, we want to create the type of new benchmarks and standards that others will want to follow. In doing so, we want to become widely recognised for our unique brand and culture.
Q. How much money are you investing in New World Hotels?
A. We are investing USD1.1 billion into New World Hospitality properties over the next five years. We will do whatever it takes to be competitive within the markets we enter.
Q. What are your expansion plans?
A. Our expansion plans are aggressive. New World Hotels will more than double in size by 2015. We are also expanding our pentahotels brand and expect to have 30 in operation also by 2015. And we'll be introducing a new premium brand. Looking at it from another perspective, we already have more than 20 new projects in development, spread evenly over the three brands. Overall, we are targeting to launch more than 40 hotels in five years!
Q. What's your strategy -- will you primarily own or manage hotels?
A. Both. We will dedicate resources towards our own new-build hotels and also grow by managing properties for developers. And, unlike a lot of hotel companies that are managers only, we bring an owner's perspective and insight to the management function -- that's an invaluable competitive advantage for developers.
Q. Why would you want to enter an already overcrowded China market?
A. It may seem overcrowded, but in fact the China market presents tremendous potential. Consider these facts -- GDP per capita in China is forecast to double over the next five years because of the expanding middle class and younger demographic. Personal and business travel is expected to grow 73 percent in the next five years. There are 1.9 billion domestic travellers per year and inbound arrivals of 52 million. Expenditures on infrastructure development are expected to be USD2.7 trillion over the next decade meaning greater ease of travel. The stats are pretty compelling. In fact, we anticipate that more than 50 percent of our revenues will be generated in China.
Q. Since there are so many players in the China market, are you having a hard time finding locations, partners or projects?
A. Absolutely not - we already have multiple projects under development, the majority of which are in China. We are fortunate through our parent New World Group to be able to leverage existing networks and deep familiarity and longevity in the country. We don't underestimate the China market and we take a long term view. In particular, we believe that the secondary and tertiary cities in China will be the economic powerhouses of tomorrow.
Q. What is the occupancy rate and RevPAR (revenue per available room) for New World Hotels?
A. Our hotels' RevPAR varies from city to city. We always aim to be first or second in terms of RevPAR within our competitor set.
According to STR Global, hotel occupancy in the Asia Pacific region rose around six percent year-on-year and New World Hotels' occupancy showed double digit growth. Our strategy is to build occupancy as we reposition the hotels. Our occupancy has helped drive RevPAR growth to around 14 percent, with Shanghai performing particularly well, helped by the World Expo in Shanghai.
Q. How are the New World Hotels products being revitalised?
A. The revitalisation will start with upgrades to our existing hotels totaling USD50 million, beginning with renovations to the Manila and Shanghai hotels.
Q. What do you mean by "modern Oriental hospitality" in New World Hotels? What is the difference between Oriental and Asian?
A. "Asian" can refer to the geography of the region, but "Oriental" is all about its cultural inspirations. Modern Oriental hospitality means a fusion of the best of what different Asian cultures are known for. We want to embrace the best of the region's hospitality and introduce an enlightened culture that is more about attitude than design. After all, "Oriental" means much more than beautiful orchids, Chinese murals and lanterns.
Q. Why is there a need for a modern interpretation of Oriental hospitality?
A. In bringing this concept to life, we were really guided by the next generation of Asian travellers who are more sophisticated and open-minded and do not see things superficially. They are also looking for something new and refreshing that isn't a clichéd version of an Asian hotel.
Q. How do you actually go about delivering "modern Oriental hospitality?"
A. It starts by the willingness to both build upon and reinterpret tradition. Take food and beverage for example -- rather than your typical, formal Chinese hotel restaurant, we will look to serve authentic Chinese cuisine within a welcoming, casual environment. This is an expression of a beautiful tradition that honours the same values but celebrates them in a more contemporary way.
But more fundamentally, our service style is natural and engaging, which is itself a reinterpretation of traditional Oriental hospitality.
Manifestations of this new culture will be felt by our guests in different ways, such as open-minded and creative means of solving problems for them and an adaptable style of service from empathetic hosts.
You can even see this in our advertising which is unconventional for hotels – for many, this will be the first place they see how New World Hotels is presenting Oriental hospitality with a contemporary appreciation and context.
Q. To change a culture doesn't happen overnight. What, if anything, is different today about how employees are recruited, trained and treated?
A. Our recruitment, orientation, training, assessments and rewards for our associates will all revolve around a more natural and interactive way of engaging associates. Interviews will become activity-based as opposed to being static. To encourage our staff to stretch their aspirations, we will ask them to share their dreams with us to see how we can play a part in making them come true. We will also offer cross-functional exposure and overseas postings for our junior associates to facilitate their training and development. These are just a few examples.
Innovative and interactive training will include workshops and role-playing to encourage intuitive thinking, fluid communication, spontaneity, empowerment, perception and effective communication. We still have a ways to go. But we're passionately committed to the journey ahead. And this for me, I have to admit, is one of the most exciting aspects of this transformation.
Hong Kong-based New World Hospitality manages the New World Hotels brand of deluxe properties in Dalian, Shanghai, Wuhan, Ho Chi Minh City and Manila, with two affiliated hotels in Shenyang and Shunde, as well as the select service pentahotels brand currently represented in Shanghai. The group has more than 20 properties under development. The company is a member of New World Group, a Hong Kong-based leading conglomerate and principal investor in many New World Hospitality properties. For further information, please visit www.newworldhospitality.com.
Calder, Account Director
Angela Wong, Account Manager