Asia-Pacific, the world’s largest regional travel market, is arguably also its most exciting. An influx of visitors, especially from China, means there are opportunities aplenty for ambitious hoteliers. But competition is tough, with new businesses emerging all the time seeking to capitalize on this wave of demand.
So what’s it like to run a hotel in this intense environment? We've previously spoken with Preeyanuj Chawla, Executive Assistant Manager at Adelphi Forty-Nine in Bangkok about her parity challenges and the rise of Airbnb. Here, we talk to Markus Schneider, General Manager at U Sathorn Bangkok about staffing challenges, ownership complexities and standing up to Ctrip.
How does the APAC (Asia-Pacific) market differ from others?
Most European and North American hotels have a completely different payroll structure from those in Asian countries, probably with the exception of Japan and Singapore. This means Asia has a very different way of operating and providing service in the hospitality industry.
The average working age is much lower here than in, say, the UK or Germany. Much more training and supervision is required in the APAC region.
In Asia, many hotels are owned by private families that see the hotel as a trophy and are looking for a well-known brand to manage it successfully. Sometimes these owners also get directly involved in day-to-day operations. These scenarios need to be well-managed in order to ensure brand standards and USPs are protected. Fortunately, this is not the case in my current hotel!
How can you ensure you find good staff?
This is probably the most difficult part (of running the hotel). Finding the right staff and keeping them means that you need to invest in training, coaching and development. You need to give your staff opportunities. If not, you lose good people to competitors - often for just a small increase in their salary.
What about customers - where do they typically come from?
At my hotel, peak season brings mainly European and Australian guests, as well as Asian guests during Chinese New Year. Over the year in general, our strongest markets are Korea, Taiwan, Hong Kong, China and Japan. What we are seeing from the Chinese market in particular is that the clientele is changing and getting more sophisticated.
Is price important to your customers?
Yes, definitely. Normally the majority of guests book the lowest price possible at the hotel. It is then the responsibility of our front office team to communicate the value of the hotel and upsell the guest upon arrival to a higher room category. We've implemented this strategy very successfully at our hotel, and have improved guest satisfaction and revenue significantly.
What's the secret to upselling like that?
In-depth product knowledge on the part of the staff, good training, and good incentives.
Which channels do your bookings come from?
OTA bookings account for 54% of our total. A further 7.5% are leisure, 10% are 'other discount', and the rest is made up of wholesale, corporate FIT and corporate groups.
What is your view on OTAs?
OTAs play an important role for us, but they come with a high commission fee. We are trying to shift some of these bookings to our own website and other discount channels, which would automatically increase the hotel's profits.
Do you monitor how OTAs are selling your rooms?
Yes, we do this on a daily basis. We also have a designated team at the corporate level doing the same. We have no problems banning OTAs if we feel that they are not selling as per their contract. Just recently, we stopped accepting bookings from Ctrip until they fix their internal problems.
Do you think not working with Ctrip will have an effect?
Not at this stage. Long-term, the effects remain to be seen.
Why do you want to increase direct bookings?
To reduce commission payments, increase profits and build a bigger direct and repeat customer base.
What benefits do direct bookers get at your hotel?
We guarantee the best available rate, and we reimburse guests if they find a better rate for the same room elsewhere.
What other areas of your business are you trying to grow, apart from direct?
We would like to attract more corporate groups and MICE business. We have a stunning hotel resort in the middle of Bangkok with beautiful meetings and events facilities.
How do you think 2018 will play out?
So far, very good. I believe it will be a good year.
Interested in finding out more about the Asia-Pacific hotel market? You might like these other posts from the Triptease blog:
Moving to direct and fighting for parity: The life of a hotelier in Asia-Pacific
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