One panel discussion at the Hotel Investment Conference Asia Pacific wasn’t so much about its named topic, “Beyond Gateway Markets,” as it was about how players, big and small, are entering emerging secondary destinations – and the stakes in preserving them.
Design firm WATG is “quite comfortable going to new destinations,” said panelist Thomas Williams, vice president of design and architecture firm WATG. “The design process for most out-of-the-way destinations really has to do with the existing culture, the existing property, and a lot of the stuff that people talk about around sustainability. Those basic principles of design, of being gentle with the land and the local culture, are just critical to emerging destinations. The design process has to be one of education with the owner.”
Often those secondary markets, most frequently in southeast Asia, owners working with companies like Hyatt Hotels Corp. and Hilton are more comfortable with a traditional “box” brand than a comparatively edgier lifestyle or boutique hotel.
That’s unless you’re Club Med, which recently announced a project in Borneo, opening in 2022, that checks the boxes for the all-inclusive pioneer – beachfront of at least 350 meters, within a couple of hours of an airport, among other criteria – but where there is “absolutely nothing” in terms of a traditional market. The resort will be the brand’s first large-scale, sustainably built beach resort in Asia Pacific.
“We don’t need to be in a place that is already established,” said Kristin Thorsteins, vice president of development and asset management at Club Med, which she said was an early entrant in markets like Phuket and Bali.
Other big players, like Chris Anklin, regional vice president of development at Hyatt Hotels Corp., are “still very careful about what we do” as a management and branding company versus a developer or owner. “We have to manage expectations and think about those returns. So the whole idea of ‘if you build it they will come’ sometimes works, but … it’s about getting the right brand into the right location.” The company is following rail and road construction into new markets in Thailand, Laos and Vietnam.
Still, customers willing to make the effort to travel to those destinations are looking for unique experiences as well. “I think hotel design is at a point where everyone has seen everything. I look at what can we possibly do that is wild and make people talk,” said hospitality designer Bill Bensley. The zipline that guests take over a waterfall to his Shinta Mani Wild tented camp in the Cardamom National Forest in Cambodia is one example. “The crazier the better,” he said.
Bensley’s priority in developing that project is not primarily profit: He purchased about 1,000 acres in the southern part of the forest, and through a partnership with the Wildlife Alliance finances a team of 115 former Cambodian soldiers that patrols the area with helicopters, drones and AK-47s to protect the area from poachers. Meanwhile, the Cambodian government is harvesting the forest wood “as fast as they possibly can,” Bensley said, because it doesn’t see much value to preserving it.
For Bensley, visitors raise the area’s profile as a destination can help save it. “Even 15 rooms has the ability to bring attention to the government that, hey, maybe tourism in this part of Cambodia is a good thing, and maybe there is value beyond cutting down the forest,” he said. “It’s about taking action in your own hands.” (Shinta Mani Wild received HICAP’s Sustainable Hotel Award later that afternoon.)
Predicting changes to the market
What will be the biggest shift in hospitality in the next 10 years, moderator Cyndy Tan Jarabata, president of Tajara Hospitality, asked the group.
“The fundamental shift is the demographic that’s traveling now,” Williams said. “One of the megatrends I would predict is the use of wealth. We’re living in a time where there’s more wealth in the world than ever before, there’s more employment than ever before… That allows the deployment of a lot of other resources. It allows us to do things that we haven’t able to do in terms of preservation.”
To that end, why the continued proliferation of traditional box hotel brands in the region?
“We may not enjoy them in the same way, but there’s an absolute need for them” in the market, Anklin said.
“It’s hard work to convince owners to look at other brands that are more differentiated in certain markets,” agreed Chris Pucher, senior director of development in Asia for Hilton. While a traditional full-service hotel might be the first mover in a primary market, the advantage for a player like Hilton is the corporate infrastructure it brings with it, which can then support less traditional hotels in nearby secondary markets, he said.
Whatever the development, strategy is necessary. “A lot of these destinations start with proper master planning,” Williams said. “How do we interface with government authorities when we’re planning large-scale projects to prepare for a variety of brands and experiences and protect the things that need to be protected?”
“I know everyone in this room is not going to agree with me, but I think hospitality should be more than just money. I think hospitality should be about how to make people’s lives better,” Bensley said. “And I think every single hotel – and we’ve got 6,000 hotels that are going to be built in the next five years – I think every single hotel should at least attempt come with a purpose.”
When asked by Thorstein if he thought the bigger companies were doing enough in terms of sustainability, Bensley replied: “I think for the most part, what you guys do is a bunch of greenwash,” he said. “A whole lot of greenwash.”
But, he continued, brand, number of stars and budget don’t matter if companies are creative “with the way that we present that particular hotel.” It could be partnering with a local orphanage to hang the children’s drawings in guest rooms and donating a regular amount to support it.
“At least something, at any level. Do something positive … other than stuffing our money in our pockets, to think beyond where we go as traditional hoteliers,” Bensley said. “I don’t care what it is, just to be able to adopt something around the corner from where we live. Just to be able to do that is very possible with all of us rich people in this room. It’s very possible for us to do. So it’s about creativity. It’s not about money.”