Home' Hotel Management : HM FEB 2017 Contents CHOE PENG SUM
Chief Executive Officer
Frasers Hospitality Group Pte Ltd
There is a thing about predictions. They can go awfully wrong. The outcomes of the Brexit
referendum and the US election are two big examples from the year gone by. That ’s why I
have never been a fan of trying to predict things.
Having said that, being one of the leading hospitality brands with global operations, we
have to be able to plan for the future. However, my team and I prefer to focus on trends
that I think will have an impact on the industry, and by extension on our business, rather
than on bold predictions. As we kick-off 2017, here are my thoughts on some key ones.
Despite all the uncertainty surrounding the global economy, people will continue to
travel, especially for business. The MICE industry has been a key driver of growth in
business travel in recent years and there is no indication of a slowdown on that front, at
least not yet. In 2015, Singapore welcomed about 3 million MICE travellers, which saw
over USD$4.5 billion in MICE tourism receipts. The country was also awarded the top
international meeting city of 2015 by the Union of International Associations (UIA) for the
ninth consecutive year.
Business travel, especially to, and within the Asia-Pacific region will also get a
boost from two key factors. Firstly, the region is home to some of the world’s fastest
growing and most populous economies like China, India and Indonesia. India’s economy
expanded 7.3 per cent in the July-to-September quarter of 2016, China’s by 6.7 per cent
and Indonesia’s by 5.02 per cent.
As growth in the developed markets in the West slows down, global companies are
turning their attention to these markets resulting in a jump in business travel with executives
flying in from all over the world. In many cases, people from head offices are being deployed
to in-country offices for extended periods, triggering a demand for services residences.
These three countries are also key growth markets for us. We have a portfolio of 25
properties with over 6,000 keys in China, including those in the pipeline. For Indonesia,
the opening of Fraser Place Setiabudi in March last year brings Frasers Hospitality’s
Jakarta portfolio to a total of nine properties with more than 1,500 units by 2019.
Secondly, the rapid growth of the aviation industry, fuelled largely by budget carriers
like Scoot, Ryanair and AirAsia has made travel more affordable. That has helped boost
both business as well as leisure travel and will continue to do so, especially as airlines open
up new routes.
Beyond Asia, Europe and Middle East present an exciting opportunity as well.
Europe continues to emerge from its debt crisis, and we are seeing very healthy
occupancy rates across the board in all major cities. This is particularly true in the UK,
where the exchange rates remain attractive and tourists abroad are increasingly travelling
to regional cities to explore different parts of the country. Our Malmaison Hotel du Vin
(MHDV ) group of boutique hotels across the UK, which we acquired in 2015, have since
received a considerable uptick of travellers. We will be expanding our portfolio with six
more hotels in order to cater to the growing appetite.
In the Middle East, the push for the next wave of growth, away from one driven
purely by the oil industry, will open up new opportunities for business and leisure travel.
There are various hurdles that we need to overcome to realise these opportunities.
Firstly, the profile of the business traveller is changing, with millennials becoming a large
part of this group. Their needs and wants are completely different from business travellers
of the past and hospitality firms need to adapt to cater to them.
While historically business travellers put a lot of emphasis on brand promise, the new
generation is attracted more by engagement and relevance. Millennials are thrill seekers
who are obsessed with variety, and they like to explore and experience new things. Our
SNAPSHOT: FRASERS HOSPITALITY
Number of hotels & rooms (Globally):
92 hotels / 11,931 rooms
Number of hotels & rooms (Asia-Pacific):
24 hotels / 4,646 rooms
Number of hotels & rooms (ANZSP):
4 hotels / 788 rooms
Number of employees (Globally / APAC / ANZSP):
4,161 (global) / 982 (APAC) / 313 (ANZSP)
Year the company was founded: 1998
Brands in the organisation: 7 (Fraser Suites, Fraser
Place, Fraser Residence, Modena by Fraser, Capri by
Fraser, Malmaison, Hotel du Vin)
Head office location (global): Singapore
market research on 9,500 millennial travellers in Asia-
Pacific found that entertainment, seamless connectivity and
ability to connect with like-minded travellers are primary
factors that shape the decisions of most millennials.
To cater to millennials’ lifestyle needs, we have launched
the Capri by Fraser brand in 2012 and we continue to
innovate and fine-tune the features and offerings in our
properties. An example would be the ‘Spin and Play’
concept, which is changing the usual hotel laundry model
by keeping travellers engaged with the latest games
consoles, kickboxing and other facilities in laundrettes.
The hospitality industry is also facing stiff competition
from the growth of disruptors like Airbnb. Made possible
by technological advancement, these companies are
here to stay. They are very aggressive and have made big
inroads, especially in the leisure travel segment. However,
traditional hotels and serviced apartments will continue to
have a big role to play.
There are key aspects such as safety, location,
accountability, assurance of service standards and quality,
where a traditional hotel or serviced apartment has a
At the same time, hospitality is a people business and
well-trained staff who are ready to always help make the stay
comfortable for travellers will always be a big differentiator.
Many companies also require serviced residence opeIf
I had to make one prediction, it will be that companies
who fail to embrace technology and ignore what today ’s
travellers really need, will find it extremely tough to stay
relevant in 2017.
40 HM The Business of Accommodation
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