Letter from Hong Kong: From Real Estate to Community, From Brick to Clicks, Can Hospitality Make the Leap?
By Yeoh Siew Hoon
Wednesday, 25th October 2017

The sky is piercingly blue, as blue as it could only get after a huge storm has just whipped through, I am in Hong Kong two days after the last Typhoon 8 visited this city built on a rock.

At the Hotel Investment Conference Asia Pacific (HICAP), I heard a panel of investors saying perhaps it would take a perfect storm to jolt the hotel industry out of complacency and finally face the challenges coming at them from several fronts – from real estate inflation to tech disruption and a new generation of consumers.

Suchard Chiaranussati, founder and managing director of SC Capital Partners Group, said hoteliers, who sat on trillions of dollars of assets, were happy to let others disrupt them.

“When was the last time we spoke to customers and asked them what they want, unlike the OTAs who know how to run focus groups and speak to customers?”

He noted that there had been no innovation in the hotel sector for decades. “It still takes me five minutes to check in and I still sleep on the same pillow.”

And he said it was not unusual today for the three global OTAs to contribute up to 45% of a hotel’s distribution “and we have no clue what to do with them and we have to ask why do we need sales managers anymore? Just to key in data?”

Richard Weissmann, Partner at KSL Capital Partners, who said, “hotels think of better innovation as better showers”, observed there had been no disruption to the hospitality industry for 50 years.

And now the combination of Airbnb and OTAs, he said, was forcing hotel groups to consolidate to get scale and compete against these massive forces and think of how to deliver services to a new generation.

He recalled the early days when he visited China when a leading OTA was fulfilling ticket sales by scooters and now they had moved on to “swipe by phone”.

Read the full article here.

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