KHI upbeat on Asia hospitality sector

Dorsett Regency Kuala Lumpur: KHI has big aggressive plans in Malaysia.

KOSMOPOLITO Hotels International Ltd (KHI), a subsidiary of Hong Kong-listed Far East Consortium International Ltd, is optimistic about its growth prospects in the region.

KHI executive director Winnie Chiu says the hospitality sector in Asia is benefiting from the advent of budget air travel.


Chiu: ‘The budget airlines have actually revolutionised the hospitality sector.’

“The budget airlines have actually revolutionised the hospitality sector. For those that didn't have a budget to travel, they now can. For customers who previously spent 50% on air travel and 50% on hotel stay, they may only need to spend just 20% on their travel expenses,” she tells StarBizWeek in an interview.

To leverage on this, Chiu says KHI will be boosting its brand of “Asia-inspired hospitality” in countries where it is already present.

KHI was set up in January 2007 and is listed on the Hong Kong Stock Exchange. It owns and manages four key hotel brands in different market segments Boutique Series by Kosmopolito, Grand Dorsett, Dorsett Regency Hotels & Resorts, and Silka Hotels, which can be found in Hong Kong, Shanghai, Chengdu, Wuhan, Singapore, Malaysia and London.

KHI senior vice-president of sales and marketing Philip Schaetz says the company has 17 operating hotels in Asia and seven new ones in the pipeline. He says KHI has different strategies to promote its four core hotel brands.

“We have four core brands under our portfolio but they attract a different clientele. The Grand Dorsett, for instance is a five-star hotel that caters to affluent customers while the Dorsett Regency is our four-star product.”

However, Schaetz says KHI prefers to categorise the Dorsett Regency more as a “four-star-plus” offering to attract customers.

“We don't want to position it as a five-star. A lot of hotel chains claim that they are five-star but when you go there, you actually end up being a bit disappointed and ask yourself is this really five-star?' So we want to go through a different route and exceed the consumers' expectations once they arrive.”

Schaetz says that KHI's Silka Hotels are categorised more as three-star-plus hotels so as to differentiate itself from other three-star hotels.

The Silka Hotels are usually located near shopping enclaves, tourist attractions and business districts so that they provide good base for business and leisure travellers.

To promote the Silka brand, Schaetz says the hotel ties up with a number of retailers in the city to provide special promotions to its customers.

“We have a programme called Stay, Shop & Save,' involving Silka hotels and retailers in the city where customers can get a discount when they produce their room key at the retail outlets where they are shopping.

“We have other plans in the pipeline, such as training our concierge to know what the greatest deals in the cities are.”

Schaetz also points out that as the usage of technology is crucial, KHI, through various partners, is implementing a central reservation system in its line of hotels to stay ahead of the competition.

“This will push out our room inventory much faster in the market and let the customer know what the best deals are,” he says.

Chiu says KHI plans to launch its hotel in London between 2014 and 2015.

“We're building it opposite Westfield (a shopping centre in London). It is a good location as it is not very far from the airport.”

Schaetz says the expansion to London was part of its strategy to boost its brand of “Asia-inspired hospitality.”

“We want to bring the Asian experience to the international traveller rather than the Asian traveller.”

Chiu says KHI currently has no plans to expand its presence in other non-Asian countries.

“We're always looking for more opportunities but we have a disciplined strategy when it comes to buying land. In London, we looked for one-and-a-half years before finally deciding to build a hotel there. We want to have a strong footprint there before looking elsewhere.

“The hotel industry is a cyclical business and with 24 hotels, we have good cashflow to strengthen to build the brand further.

Schaetz says KHI's main focus at the moment is Asia “where the opportunities lie.”

“It's where growth and innovation is happening now. Also, Asians are getting richer by the day. It's a fact!”

On the local front, KHI's properties are the Grand Dorsett Subang, Dorsett Regency Kuala Lumpur, Grand Dorsett Labuan, Silka Hotel Johor Bahru, Maytower Hotel & Serviced Residences Kuala Lumpur and Damas Suites & Residences Kuala Lumpur.

KHI vice-chairman Datin Jasmine Abdullah Heng says the company plans to have at least five ongoing projects in Malaysia that it plans to launch within the next 12 to 24 months.

She adds that KHI is also aggressively looking for land to build new properties, primarily in Kota Kinabalu, Penang, Langkawi, Kuantan and Malacca.

Chiu adds that the advent of low-cost travel will be a boost to the hospitality sector in Malaysia.

“We're very bullish about Malaysia and have big aggressive plans for this country,” she says.

By The Star