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Thousands of hotel rooms are being built in Asia-Pacific. Thousands more are unbranded. The region continues to be the fastest growing for asset-light global hotel chains hungry for management and franchise revenues.
A well-oiled setup to cover the region is essential as, while opportunities are big, competition is bigger. Owners have more brands to choose from, not just from various chains but within a chain itself. They also have more choices on how their properties can operate, as technology has opened up new distribution, sales and marketing, and operating solutions.
How chains are set up in the region depends on their size and scale. But big or small, the need to be close to the market is gaining importance, as this enables chains to understand owners, partners, and employees better as the region expands.
Moreover, Asia is seeing a younger generation of owners taking over the family business; they have different expectations, and relationship building between them and chains starts all over again.
The problem is that resources are limited to cover a huge region where even neighboring countries, say Singapore and Thailand, are so different in culture and ways to do business.
Given the current mixed results in Asia-Pacific due to Hong Kong protests and the trade war, chains are expected to sharpen their strategy in how they cover Asia-Pacific, as InterContinental Group has done.
Meanwhile, here’s a quick look at how five global chains cover the region.
AccorHotels has an Asia-Pacific corporate office in Singapore and seven other major regional offices. They include in Sydney, which oversees the Pacific with more than 337 hotels in Australia; Bangkok, which covers Thailand, Cambodia, Japan, Laos, Myanmar, the Philippines, South Korea and Vietnam; Shanghai and Beijing, which oversees China where it has more than 360 hotels; Auckland, for New Zealand, Fiji and French Polynesia; Jakarta, covering Indonesia, Malaysia and Singapore; and New Delhi, which covers India, where it has more than 50 hotels.
In total, Accor operates 1,160 hotels in the region and has a strong pipeline of more than 350 hotels opening in the next five years.
The chain has at least 118,000 staff across Asia-Pacific. Its regional head office is in Singapore has around 120 staff under chairman and CEO Michael Issenberg.
“AccorHotels has always believed strongly in having local teams on the ground in each area in Asia-Pacific because the region is so vast and so culturally diverse. We moved our corporate Asia-Pacific offices from Sydney to Singapore in 2008 when we realized that the majority of our growth was going to be in Asia,” said Issenberg.
“We are fully committed to retaining our corporate offices in Asia-Pacific where a growing percentage of our global growth is being driven. Asia-Pacific now represents 50 percent of our global pipeline and this region is especially driving growth in our luxury and upscale sector.”
Hilton’s Asia-Pacific business is headquartered in Singapore, servicing 900 trading and under construction hotels across the region.
This is further structured into five operating regions, each with its own regional office, leadership team and support structure: Singapore, covering Southeast Asia; Shanghai (Greater China & Mongolia); Tokyo (Japan, Korea & Micronesia); Sydney (Australasia); and New Delhi, covering India.
In Singapore and India, Hilton moved to new and bigger offices recently due to growth in the region, it said. The chain is also expanding the existing Tokyo and Shanghai offices, and will be located in a new and bigger Sydney office in 2020.
“In recent years, we have seen the rise of the Asia-Pacific traveller impacting travel flows both across the region and globally, with the vast and vibrant populations that make up Asia-Pacific creating even greater future potential,” said Alan Watts, Hilton’s president Asia-Pacific. “We are also mindful that the Asia-Pacific landscape has changed and to remain competitive we must be relevant to the emerging domestic customer, [aside from] international travelers.
“We believe that early investment and a close-to-market deployment is the right strategy to ensure market relevance and deliver a great customer experience and the strong premiums that achieve owner returns.
“This strategy has seen us acknowledged as the highest ranked hospitality workplace in Asia by Great Place to Work for the last three years, while being able to deliver great in-market innovations such as our recent in-language Chinese app.”
In addition to the usual structure of an operating company that covers the key disciplines of operations, commercial, marketing, development, technical services, human resources, corporate affairs, legal, technology, procurement and finance, Hilton in Asia-Pacific also has inbound and outbound sales teams, and a dedicated Revenue Management Consolidated Centre servicing Asia-Pacific from Shanghai.
Watts said it has 1,000 corporate team members in Asia-Pacific.
“We are creating thousands of new jobs and careers as we continue to grow our business and deploy new brands to new markets,” he said.
InterContinental Hotels Group
InterContinental Hotels Group carves the world into three, The Americas, Greater China, and Europe/Middle East/Asia/Africa (EMEAA), led by a respective regional CEO.
Asia-Pacific is part of the EMEAA region, overseen by regional CEO Kenneth Macpherson, based in London.
Further, under this enormous EMEAA area are four business units or sub-regions: Southeast Asia and Korea; Australasia and Japan; India, Middle East and Africa; and Europe, each led by a managing director.
Southeast Asia and Korea is currently led by Clarence Tan, who will be leaving the chain January 31 and will be replaced by Rajit Sukumaran, currently chief development officer for Europe/Middle East/Asia/Africa.
Two main offices cover Southeast Asia and Korea, in Singapore and Bangkok, with more than 200 team members.
Australasia and Japan is lead by managing director Leanne Harwood, with two main offices in each country and 140 staff.
India is headed by managing director India, Middle East and Africa, Pascal Gauvin, based in Dubai.
The fourth business unit of the EMEAA region, Europe, is led by managing director Karin Sheppard.
Marriott’s overall Asian headquarters is in Hong Kong, overseeing the operations of the continent. It is headed by group president Craig Smith.
However, Singapore and Shanghai are also main offices that manage its operations. Singapore covers all operations from Southeast Asia to the Pacific and is where its president Asia-Pacific Rajeev Menon is based. The Shanghai office oversees China operations, including Guangzhou and Beijing, and is led by chief operations officer and managing director, Henry Lee.
It then has sub-regional or hub offices in Delhi, Bangalore, Mumbai, Bangkok, Sydney, Tokyo and Seoul and Jakarta. These offices are headed by area vice presidents.
“We are primarily driven by growth and proximity. Shanghai, Singapore and Hong Kong continue to be leading Asian economies that inspire development, which makes them suitable backdrops [for growth],” said Menon. “Given that China is our largest and fastest growing outbound travel source, our Shanghai office is an important one as we not only focus on inbound travelers, but also outbound.”
Menon said Marriott’s regional structure enables the chain to be “much closer to our business on the ground, i.e., to the hotels we run, to our owners, and to our teams that execute locally.”
“It is important for localization,” he said. “The local teams have local expertise and knowledge to build and manage relationships with owners, partners, media, and clients in the region. Ultimately, Asia-Pacific is one of the most diverse places in the world. There’s a plethora of different cultures and peoples that it is far too great for a single office based in Hong Kong [to handle], so we feel this setup works best for us.”
Wyndham Hotels & Resorts
Wyndham Hotels & Resorts Southeast Asia and Pacific Rim is headquartered in Singapore. It also has regional and satellite offices in the Gold Coast, Sydney and Melbourne (Australia), Seoul (South Korea), Kuala Lumpur (Malaysia), Bangkok (Thailand), Bali and Jakarta (Indonesia), and Manila (Philippines).
Altogether, it has more than 40 team members. “We have experts in revenue management, global sales, marketing, finance, human resource, legal and technical services supporting our franchisee and managed hotels,” said JoonAun Ooi, president and managing director Southeast Asia and Pacific Rim.
Singapore is the most effective location due to its proximity to surrounding emerging markets, he added.
“By means of Singapore, you can reach out to the other countries in Asia including the South Pacific effectively. Air travel is also frequent with daily inbound and outbound flights thus making business operations easier and more convenient. Singapore preserves good international connection with other countries when it comes to trade and industry,” he said.
The chain operates 150 properties in 18 locations, Thailand, Indonesia, Malaysia, Singapore, Philippines, Myanmar, Vietnam, South Korea, Laos, Cambodia, Tinian, Palau, Japan, Australia, New Zealand, New Caledonia, Vanuatu and Fiji.
This article has been updated to include AccorHotels’ corporate coverage in the region