HONG KONG—Officials with Shangri-La International Hotel Management Limited believe their midscale Hotel Jen brand is starting to come into its own, and the next stage for the brand’s growth will be global expansion.
Marisa Aranha, VP of sales and marketing at Hotel Jen, said growth outside of Shangri-La’s typically Asian markets has been in the cards since day one. The company is interested in pursuing the right opportunities in London, other parts of Europe and the U.S.
“We purpose-built the Hotel Jen brand for global expansion,” said Howard Ho, director of development for Hotel Jen. “Given the legacy of the Shangri-La group, our strengths do lie in Asia-Pacific. Thus for the moment the majority of our development efforts target key gateway cities throughout the region. However, we are very keen to access opportunities across (Europe, Middle East and Africa) and the Americas.”
Company officials currently have plans to expand Hotel Jen in Singapore, Hong Kong, Malaysia, China, Maldives and The Philippines.
“We have a strong command of important Asian source markets, which, as outbound travel from the region continues to multiply, would greatly benefit hotel owners,” Ho said.
Aranha said the brand’s geographic markets would not change that much from those used by Shangri-La’s older brands.
“The No. 1 market will be China, but the demographic is slightly younger from a profile perspective even than that first Singapore (Hotel Jen),” Aranha said. “Yes, there was a little attrition possibly at the start of things, but we’ve recruited new guests.”
Australia is another target, with Melbourne, Perth and Sydney topping the company’s wish list.
“Australia is one of Shangri-La’s top three source markets, so we’d be exporting brands, values and service that our existing high-end customers have heard of,” Aranha said.
Officials said discussions are taking place for hotels in Myanmar and Thailand, as well as Indonesia and South Korea, which would represent new markets for both the company and the brand.
All Hotel Jen hotels will be management agreements, Aranha said. But the company isn’t opposed to taking an ownership stake in certain situations.
“Strategically, with the right location and the right partnership, we would be interested in taking a little bit of equity,” Aranha said.
The birth of the brand
Hotel Jen was first born in 2014 as a reimagining of the Shangri-La’s Traders brand. The company still has four Shangri-La’s Traders properties, all owned by Shangri-La.
Since the first Hotel Jen was renovated and converted in Singapore, nine other properties have joined the brand’s portfolio, and a wave of renovations finished in March 2015. Company officials said they’ve already seen a growth in memberships of Shangri-La’s Golden Circle loyalty program since those properties came online.
“We had a very solid customer base with the Traders brand, and revenues were all doing well,” Aranha said. “However, with market research, it became apparent the needs of loyal customers, and others, had evolved. We saw it was important to prepare the brand for the future, for the next-generation traveler, which we knew we needed to target.”
Aranha acknowledged Hotel Jen had some issues out of the gate, but that was not unexpected and the growth the company has seen in loyalty and for the brand makes dealing with those growing pains worthwhile.
“But where we stand today is that Shangri-La is one of the first brands in Asia,” Aranha said. “There is loyalty. There was a lot of noise in the press when Hotel Jen debuted, but from a distribution perspective, we feel we have opportunity with the brand.”
Aranha said the Hotel Jen brand has seen some strong metrics.
“After three months, occupancy was 80% (in Hotel Jen),” Aranha said. “Looking at results for (the first quarter 2016) year on year most of the products are 10% to 12% up on trading, which has come about due to staff and one year of intense marketing activity.”
Changing mindsets
Shangri-La sources said the method of converting or building a Hotel Jen will look at the value-add touch points and infuse them with simple pleasures, efficiency and a sense of adventure.
“We do not want a cookie-cutter approach,” Aranha said. “Hotel Jen is informal, creative and fun. Of course, we have some design standards, but for us it is more a question of adapting to the local environment.”
She said training staff was more difficult than anticipated for the brand, particularly for employees at older hotels with longer-tenured staffs.
“When I look at the results today, we can see staff has absolutely embraced the Hotel Jen brand, but it was not easy task in our hotels, where Asian hospitality is so ingrained,” Aranha said. “There was a lot of un-learning… Jen is more informal, creative and gives the customer a slightly different experience. It is not so much about allowing staff to think outside of the box but to celebrate their individuality.”