Source: ETB News

March 27, 2014

logo-largeDo the test: pick your favourite location, do a search on TripAdvisor and you will find that most of the top rated hotels and resorts are not part of an international Hotel Management Company. For instance, according to TripAdvisor 2014 Travelers’ Choice Awards, 4 out of the top 5 Indonesia hotels and resorts are boutique-styled and independently owned. While in the past hotel and resort owners have largely relied on attaining a brand and available management models to differentiate their properties and build reputation, now owners recognise the change in guests’ preferences and the opportunities it creates.

Hotel and resort owners all over the world are now investing in their own brand to attract well-travelled and digitally savvy consumers who are seeking more individuality and local flavour. This should be no different for Southeast Asia, whose positive growth was seen ranging from economy or budget up to the luxury segments, both for business and leisure purposes (Euromonitor, September 2013). As a destination, Southeast Asia performed strongly with a 12% increase after 9% growth in 2012 (ITB World Travel Trends Report 2013/2014)

Private hoteliers should acknowledge that location, not brand, is what guests are looking for nowadays. They wish to interact with the passionate people who drive hotel and resorts and provide great service, not a company or an international brand, and this has been the trend in recent years (Hospitalitynet, 2011).

However, underestimating the task of running a hotel or resort business or not doing the homework can come at a high risk and cost. Often the fundamentals of a thorough market research and financial feasibility and sensitivity analysisare omitted either due to negligence or cost containment. Not knowing the market, its dynamics, strengths, weaknesses, opportunities and treats can lead to disaster.

Setting an unrealistic budget to cover Development, Furniture, Fixtures & Equipment (FF&E), Operating Supplies and Equipment (OS&E), IT & AV, Pre-opening Budget (incl. branding, PR and Sales & Marketing) and working capital to structure financing is another drawback. It is understandable that many first time owners are not familiar with the unique features and dynamics of the industry, critical to support an effective and efficient hotel and resort operation and find themselves in dire straits when underestimating the related costs. Therefore, it is vital that private hoteliers seek the unbiased advice of a Quantity Surveyor.

Finally, hotel and resorts owners must evaluate the ideal positioning of the property, depending on location, size of rooms, facilities, supply & demand and target audience. This can vary from standard to high-end, from conventional/traditional to unconventional/avant-garde/experimental, influencing Average Room Rates and Revenue Per Available Room.

The positioning needs to be supported by a strong branding and public relations campaign. As most of today’s bookings are generated through the hotel website or online travel agents, a compelling and user-friendly website is paramount. The best branding however is guest experience. Travellers’ expectations are ever raising and service delivery must be timely, smooth and caring within a property which is immaculate at all times.

Given the uniqueness and the many unknown specifics and dynamics of the business, owners, particularly novice, are encouraged to obtain professional assistance from reliable hospitality experts that provide tailor-made services and solutions.

From: ETB News

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