Confessions of an Entrepreneur.
By Yeoh Siew Hoon
Tuesday, 26th May 2009
Founder of Orange Hotel Group, Wu Hai, talks to Yeoh Siew Hoon about the "stupid" mistakes he's made and why entrepreneurship is like "high wire action with a safety net."

As an entrepreneur, you've got to believe that any decision you make at the time is the best decision, even though it may not be the right decision.

Wu Hai, CEO of Orange Hotel Group (pictured right), who has started up and sold three companies in China, speaks from personal experience. "I had the opportunity to make Smart Travel the biggest online travel company in China, it could have become a Ctrip, but I sold it and joined Ctrip.

"My mistake was not communicating enough with investors."

But "the decision I made at the time was the best decision and I had to deal with the decision and move on," he said. "The important thing is to learn from the stupid things you've done."

Wu Hai co-founded Smart Travel in 1997 and sold it to BizExpress in December 1999. In 2000, he joined Ctrip.com as senior vice president-sales and marketing and is credited with helping it transition from being a pure online player to having a broader model spanning online and offline channels.

A year later, the entrepreneur bug bit again and he founded Fortuntetrip which he then sold to Sina in March 2004. He continued to run FortuneTrip until its acquisition by eLong, after which he served as vice president-sales till 2006.

This blend of entrepreneurship as well as experience gained with working within a corporate environment prepared Wu Hai for his latest hotel venture, Orange Hotel Group which, with 16 hotels in Beijing, Tianjin, Hangzhou, Ningbo and Nanjing, is the largest design hotel group in China.

Last December, the group received an additional US$20 million investment from existing investors DT Capital Partners and Taiwan's Forte Hotel and new investor CITIC Asset Management. It started with US$10 million in start-up capital from DT Capital Partners, Forte Hotel, Wu Hai himself and several angel investors.

Wu Hai is obviously someone who likes trying new things. The fact that he knew nothing about hospitality did not stop him from starting Orange.

The idea for the Orange concept - its positioning is "high design, high quality, high value" - came from his experience at Ctrip and eLong which he said gave him insights into customer needs.

"In the past few years, budget chains have been very successful - people want value hotels - but competition is tough in the budget segment. I wanted to do something different.

"With the development of the economy, people's needs are changing. They are beginning to appreciate design and want to express that  am unique, I am different? but they also want value.

"Our brand has both a functional and emotional association."

Rooms at its hotels which come with designer touches are priced between RMB248 and RMB280 (Internet access included), 90% of its customers are Chinese and it runs about 90% occupancy group-wide with an ADR of 255RMB, according to its vice president-sales and marketing, Jennie So.

It launched a higher end Orange last year - the first Crystal Orange is situated on Hangzhou West Lake, and is priced at RMB400.

Orange is one of the winners in today's tough times. Budget cutbacks by corporations mean they are trading down from the traditional five star, and you could say Orange's "high design, low cost" model is perfect for the times.

Said Wu Hai, "I like tough times. I thrive on tough times. There are a lot of new things I am learning ?I have never been in hospitality. We face a lot of challenges but I enjoy the processes in any business."

His past experience has also taught him the value of communication with all stakeholders.

"When you start a company, you will get a six-12 month honeymoon period. You have to warn them, s***will happen and prepare them for it. The next step is to make compromises as you go along. Be transparent, manage expectations, manage the rhythm of business."

Right now, he said, Orange is in the best shape ever. "Last December and January, when the US market collapsed, our business did not look good. There was a lot of irrational thinking, and people put their money in the bank, thinking it was safer.

"Now business is good, we are making money. You have to help investors by giving them information, especially if it抯 a new market for them."

What Wu Hai is trying to do with Orange is to break down the old ways of segmentation. "In China, hotels are graded from one to five star. I want to find a new way to segment."

He chose to launch Crystal Orange because he believes it is easier to offer higher value for a higher price point. "You can't find a room if you don't book our hotel in Hangzhou; I think it's the location on West Lake," he laughs.

Wu Hai is also upgrading himself and is currently a student in INSEAD's EMBA programme, traveling to Singapore and Paris for his studies.

"I want to improve myself and learn, and I want to expand my network. Maybe I will meet Steve Jobs from Apple and I can say to him, put your computer in my lobby.

I've also always dreamt of joining a well-known EMBA programme. I remember when I was working at Ctrip, there was a woman from Harvard and I asked myself, what do I have to do to make as much money as her. That's when I said I'd get a degree."

While he agrees that he's probably learnt more in real life than he could ever in his programme, Wu Hai said, "It's good to confirm that what I had been doing all along, without knowing it, was the right business strategy."

He calls entrepreneurship "high wire action with a safety net?"

"You must be willing to take risks and get excited about the challenge. There's something in you that wants to be an entrepreneur."

His role model: Ho Kwon Ping, executive chairman of Banyan Tree Holdings. "Please tell him he has a fan."

Comparing Oranges with Apples: Take Me There

Yeoh Siew Hoon, one of Asia's most respected travel editors and commentators, writes a regular column on news, trends and issues in the hospitality industry for 4Hoteliers.com.

Siew Hoon, who has covered the tourism industry in Asia/Pacific for the past 20 years, runs SHY Ventures Pte Ltd. Her other writings can be found at www.thetransitcafe.com

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