Adrian Zecha – Azerai resorts

Image: BusinessTimes

Much of the media buzz surrounding Azerai Luang Prabang – a lush new resort in the UNESCO heritage site in Laos – has largely been to herald the career ‘comeback’ of Adrian Zecha, the much lauded hotelier who set the standards for luxury hospitality when he created the Aman stable of resorts in 1988. When a messy ownership dispute with his Russian partner left him with zero claim to the hotel group he founded, combined with a muted presence in the press, there was every reason to believe that he had taken a back seat in the business and who knows, even retired.

The truth of the matter is that Adrian Zecha is not making a comeback – because he never left.

When we speak with him, he has just returned to his home base of Singapore from Cuba “via Paris, because I do other things as well,” chuckles the amiable 84-year-old over the phone. Cuba is the site of the next Azerai project, one of more than three that are in the pipeline.

Image: BusinessTimes

He is in Singapore on average 10 days a month, travelling around the world for his other businesses including GHM Hotels, which develops and manages luxury properties in Bali, Switzerland and Vietnam. He is currently working with the Beijing Tourism Group (BTG) to grow the Ahn Luh brand of urban resorts in China. And who knows what else is on the plate of this energetic octogenarian who picks his projects based on gut feel and a simple “I decide, ‘this would be a lovely thing to do’.”

Retirement is not an option. “If you analyse the definition it means finding a chair, hopefully one that rocks a bit, and wait to die. That’s a hell of an option!”

But his latest baby is Azerai, where he is creating his niche in the affordable luxury market. Ask him if affordable luxury seems like an oxymoron and he begs to differ.

Image: BusinessTimes

“The interesting thing about luxury is that people think it’s about the dollar and affording it. But that’s not true and it never was. True luxury is a sense, a feeling. It’s the experience in hospitality and how you create or achieve that is up to you and your vision of what luxury means. There’s no formula for it and I can’t say that my interpretation of the luxurious experience is the same as yours. I hope that my vision of it which I was able to deliver in Aman, I can also deliver at a lower price with Azerai.”

Mr Zecha can’t be pinned down to a formula because he doesn’t have one. What he does have is instinct and 45 years of hospitality experience which began even before Aman when he co-founded the Regent hotel chain and sold it to Four Seasons. He and his partners also sold another hotel company they founded to the Mandarin Oriental group. Interestingly, Mr Zecha started out as a journalist who worked with Rupert Murdoch and was even group general manager of The Straits Times in the 1960s.

Image: BusinessTimes

“The hotel business has many market levels – upmarket, mid-market, mass market. At any particular time, there is an opportunity to create a niche market which is different.”

When all is said and done, there are only two things that matter. “You can talk and talk, but it’s all about hardware and software. The design and architecture, and the service product. The question is making these two work.”

While you say he is lauded as a visionary, he says he is “grateful” to be thought of that way. “I certainly don’t do this to prove a point. What I like to do is have a product which I love and think there is a possibility for scaling it.

“I’m an artisan, so I can’t have big hotels. Azerai can go up to 70 to 80 rooms but I think 60 is a nice size, it gives you sustainability and the flexibility to do different things. When you have 200, 300, 1000 rooms your flexibility is limited. It’s like cars. Toyotas are great but you have to, say, sell two million a year to break even. Whereas with Ferraris you can break even with fewer because they charge a lot for them.”

Image: BusinessTimes

Would he do another Aman? “No. I’ve been involved in building so many hotels, what’s the point in doing the same thing twice? The challenge is to do something new. And what I’m doing now is Azerai.”

And he continues to build his niche on his own terms, acting on gut feel with neither email nor mobile phone or social media. “I’m old-fashioned!” But it doesn’t mean he’s out of touch. He feels that Airbnb is one of those that succeeded in creating a niche. “Would it have been a phenomenon 20 years ago? It would have been too early. I would say the same for Aman that if I’d started 10 years earlier than I did, it wouldn’t have succeeded, and if I started later I would just be playing catch up.”

He says he has a favourite response when people ask him which is his favourite hotel project. “I’m like an old farmer’s wife. I just drop many babies! And Azerai Luang Prabang is my latest one.”


Choe Peng Sum – Frasers Hospitality

Image: BusinessTimes

In Berlin’s trendy Museum Island, just a short walk from the city’s famous attractions, sits the Capri by Fraser – a funky, designer-ish hotel-residence by Frasers Hospitality group. It’s the latest of eight Capri hotels opened by the Singapore company in the last two years, with plans to push out another 12 within the next three years.

It has ‘Millennial’ written all over it with its playful colours, casually-attired staff and modern vibe, and it’s the result of a company that’s nimble enough to react to changing tastes and business trends, says its CEO Choe Peng Sum.

Part market research, part bargain-hunting and part sheer good luck have been the elements of a winning strategy that’s made Frasers one of the more successful independent hoteliers with an average growth of 26 per cent a year.

Image: BusinessTimes

The Berlin property is a prime example of risk-taking that paid off. It was not even a building but a piece of flat land above an archaeological site which they could not disturb. It’s now a feature of the lobby with a see-through floor that looks down into the site. Because the building had to be built from scratch, “we took a development risk for 2.5 years,” says Mr Choe. “But because we’re willing to take that risk, we can get it at a good price. If it was all done up, the price would be a lot different.”

Under his watch, Frasers Hospitality – which turns 20 next year – has made a string of smart property buys that have since jumped in value, including Fraser Suites Kensington in London which was bought for £40 million and is now valued at £150 million.

Even the first Capri – which was launched three years ago at Changi Business Park – was a calculated risk that has paid handsome dividends. “It was 2008, at the height of the great financial crisis,” Mr Choe recalls. “It was a new area and we bid for the land site even though nobody knew how well it would do. In Singapore, if land cost is more than 50 percent of the project, it’s tough to make it work. But this land cost was only 25 per cent so we knew it could work.”

Image: BusinessTimes

“We wanted to do something different – a fun concept with technology and a lot of research went into it.” With its slick, arty and hi-tech environment it was an instant hit. And what they didn’t know at the time was that they had created a millennial concept even before the term ‘millennial’ became fashionable.

The concept’s timing couldn’t be better. “The very long-term stay guest (which Fraser Suites caters to) market is shrinking and companies are sending out younger people to travel for a week or two, maybe a month. They don’t need three or four bedrooms, just a kitchenette which makes it different from a hotel room.”

These younger people also happen to be millennials, “so when we see this big catchment we have to change, hence we’re re-calibrating our strategy to meet this demand”. In 2019, there’ll also be a new Capri in Far East Square in Singapore’s Chinatown, which will have a more heritage design compared to Changi.

“If we wanted to make our job easier, we can approach it from a cookie cutter approach. But if everyone looks the same within five or six years they’re all outdated.” That’s why each Capri looks different and takes on elements of its environment to give each its own identity.”

Which pretty much describes Frasers’ DNA, which is to create its own identity whichever market it’s in. “We’re firing on all levels,” he adds, whether it’s Fraser Suites or its four star equivalent Modena; or its Malmaison and Hotel du Vin hotels. Wherever they go, they are fighting with bigger boys for properties, but the trick is to “separate ourselves as a niche player.”


Yoshiharu Hoshino – Hoshino Resorts

Image: BusinessTimes

When Yoshiharu Hoshino was growing up in Karuizawa, Nagano, he visited a cousin in Tokyo and was shocked at the size of the latter’s tiny bathtub compared to the giant hot spring bathtub at the ryokan his family had been running since 1914.

Now the fourth generation ryokan owner is poised to take on his next great challenge: to bring Japanese ryokan hospitality to the rest of the world.

Together with his brother, Mr Hoshino runs Hoshino Resorts, with 37 properties in Japan that they either own or manage. The duo is credited with taking the ancient concept of ryokans and hotspring bathing, and modernising it to make it more accessible to younger Japanese and international visitors.

Image: BusinessTimes

When Mr Hoshino took over the reins of his family’s business in 1991, Japan’s travel patterns were undergoing a major shift. Traditional Japanese ryokans were going out of business as more Japanese preferred to travel to modern, Western-style resorts abroad, especially Hawaii, and cities in Europe or Australia.

Mr Hoshino felt that the only way to compete was to create equally modern surroundings at home, but at the same time staying within the traditional ryokan setting. He spent the next 13 years convincing banks to lend him the money to demolish and rebuild the family ryokan into what is now known as Hoshinoya Karuizawa. The sprawling, modern premises is the brand’s flagship, which also includes Hoshinoya in Kyoto and Okinawa. It also has another brand of ryokans under the Kai label which are more traditional and offer onsen bathing.

Image: BusinessTimes

“We made Hoshinoya very modern and comfortable but we design everything to still look very Japanese,” says Mr Hoshino on a recent visit to Singapore. “It was a big success once we opened in 2005. A lot of our guests told us they couldn’t find this kind of resort in Japan. I felt that if we can meet the standard of overseas resorts, we can compete because we are closer than Hawaii, and we have strong content like the cuisine and hot spring bathing, which is our tradition.”

The company recently opened a Hoshinoya in Tokyo, managing it for the owners Mitsubishi Real Estate. “Japanese ryokans in the city is something I’ve wanted to do for more than 10 years. We wanted to create the kind of traditional ryokan that can work in large cities – where business people and tourists come to experience the Japanese ryokan style. So in future, we want them to choose us not because we are in Japan but because Japanese ryokans are more appealing to them than Western-style hotels.”

Image: BusinessTimes

Currently, the company manages a property in Bali, its first overseas, except that it’s not a ryokan-style resort. It reflects the local culture and cuisine, but the processes and management style is Japanese.

If the ryokan concept works in Tokyo, it will be a template that can be reproduced in any large city, say in the US, and could pave the way for Japanese hotel companies to expand overseas.

“In the 1980s when I was studying hotel management in the US, Japanese hotel companies tried to expand their business in cities like New York and San Francisco but failed. And the main reason is that they went abroad to manage Western-style hotels when there was no reason for the market to accept that idea. It’s like a foreigner coming into Japan to start a sushi chain, the Japanese would feel uncomfortable.

“So instead of going overseas to manage western hotels, we should make adjustments to traditional Japanese ryokans and bring that concept overseas. That’s the only path that I believe Japanese companies can take to expand outside of the country.”

It may be a crazy idea but “that’s something I want to do with my career,” Mr Hoshino stresses. It has partly to do with succession. The ryokan has been a family business for more than 100 years. I’m fourth generation and I need to pass it on to the fifth and sixth generation. So we have to keep improving ourselves and expanding. If someone has to do it, we should be the one.”


Article first published on TheBusinessTimes