Simon Wan is the Chief Executive Officer and Managing Director as well as key shareholder of Sydney-based StayWell Hospitality Group (SWHG), the largest independently owned hotel chain in the Asia Pacific, with ambitious plans to build a network of 100 hotels by 2016.
So how is he going to reach this number and what’s fueling this growth? Curiosity Middle East finds out…
Sitting in a plush suite on the 18th floor at the Park Regis Kris Kin Hotel Dubai, Simon Wan, Chief Executive Officer and Managing Director as well as key shareholder of Sydney-based StayWell Hospitality Group, is a man who knows his business. The view from the room is that of Burj Khalifa. A fitting scenario for someone who portrays extraordinary business confidence as he talks about his expansion strategy!
Simon explains, “When we enter a new market, the first thing we do is try to understand the culture, the people, the business practices… If we are not respectful of the cultures and societies where we operate, people will cease to trust us and our brands. Every consumer is local. They are driven by who they are, what they believe in and what the traditions of that society are. And that’s what we offer as a brand first ‘Local knowledge, international expertise’.”
Simon splits his time between Sydney and the rest of world virtually living on plane for half the month. Yet the 57-year-old shows no sign of fatigue. He was born into privilege but chose to work hard for his living. And now with 30 years of experience working for leading international hospitality groups including Holiday Inn, Hyatt and Accor around the world, he has to his credit a long list of achievements. Over the years Simon has developed a reputation of turning small businesses into major operations and that’s exactly what he is looking to do with SWHG.
During his illustrious career, he held many top positions including CEO of Accor for North Asia based in Beijing, overseeing a hotel portfolio of 68 hotels in the region followed by managing director of the Park Plaza Hotel Group for Asia Pacific. Before forming SWHG, Simon was the CEO and Managing Director of THL, an Australian ASX-listed hotel company with 530 hotels worldwide. In just four years (2002 – 2006) Simon succeeded in boosting the portfolio of the private company with gross assets of AUD $3 million to a publicly listed tourism company with gross assets in excess of AUD $390 million which employed 1,800 staff globally.
How did you enter hospitality?
I was born in Hong Kong and was the only son in the family. When I finished school I began studying accountancy. I was doing Bachelor of Commerce and was struck by my cousin who always had the best looking girls. He dined in fancy restaurants, took them around, always paid the bill. And I realized he was able to do so because he worked for hotels and restaurants where he made a lot of money in tips. So I decided to take up a part time job with him working for room service where I too started to get a lot of tips. And I felt that’s what I wanted to do and therefore decided not to become an accountant or lawyer that my father wanted me to. When I told my dad that was going to join the hotel industry he was furious and said that in short I wanted to be a glorified waiter. You see, 30 years ago hotel jobs were not seen as a career. So I spoke to mum who managed to convince dad on the condition that I would first complete my university education and that’s how I went to the Cornell University. On completing my education, I began working with large hotel groups as a junior executive. Those days, dad wouldn’t speak to me as it was too below his expectations. He only started speaking to me when I progressed to senior management positions.
Over the years, what is the biggest change you have seen in your industry?
Like every industry, technology has changed the way we do business today. Not so long ago we received bookings via telex, fax and travel agents. However, over the years, we have seen massive growth of internet that has led to the birth of free independent travelers who are savvy enough to go online to book hotels, airlines, cars – pretty much anything and everything. In more advanced countries such as the US, 50 per cent of hotel bookings come from online channels and the number is growing drastically. Today, you don’t need a room key to open your room door. Your mobile gives you access to the room, you can order room service through smart TV also operated through your mobile and many such wonderful developments that one could not have imagined few years back.
How did you form StayWell Hospitality Group?
I wanted to retire eight years ago. So I wrapped up my business and booked a 9-week golf holiday in Hawaii with my wife and children. After the 5th week my wife got totally bored and I had to play alone or with strangers. Soon I began having dinner with strangers. During the 6th week my wife asked me to go and find a job as I was invading her privacy. When I was working she had to only cook dinner but now she had to cook breakfast, lunch and dinner. That’s how I approached one of my friends who had three Leisure Inn hotels in Tasmania and he invited me to join him. And so we formed the company where I bought 50% of the business as well as a high rise residential building in Sydney called Park Regis with a hotel component at the bottom 10 floors. The first day I went to work by myself, my briefcase and my laptop as I was the only one there and that’s how I started StayWell.
How do you distinguish yourself from other brands in the market?
There are over 400 hotel brands in the world. Fashion designers, restaurant owners, furniture houses, have all floated their hotel brands leading to big range and diversity of hotels. So much so, that last night I heard on TV about Discovery Channel launching its own hospitality brand. Competition in our industry is therefore very stiff. However, we are quite unique. We are the largest independently owned hotel management group in Asia pacific with a global footprint operating up-scale Park Regis and mid-scale Leisure Inn brands. When we enter a new market we always join hands with a strong local partner and together we build the brand and business. One of our key USPs is ‘Local knowledge, international expertise’. In addition, we are very close to our customers, that really sets us apart. One of our company policies is that general managers must take personal responsibility to get back to customer reviews and feedback on any networks / channels be it TripAdvisor or any other within 48 hours. With the advancements in internet and technology, consumer habits have changed. They are the kings with instant access to information and demand instant attention.
Why did you choose Dubai for your first annual conference in the Middle East?
We selected Dubai as the destination of our global conference for a lot of strategic reasons. Geographically speaking, if you open the map you realize Dubai enjoys the most central location. In terms of infrastructure it has got the very best airline, the very best airport, the biggest mall, the tallest building, the finest products and services.
We are an international company with a global footprint having hotels in Australia, New Zealand, China, India, Indonesia, Middle East, UK and Singapore and therefore for us Dubai was the most convenient location. We believe it is a truly international city to host our first global conference in the Middle East. The Dubai gathering is an important part of the StayWell Hospitality Groups’ strategic growth, in having a platform to bring together all the key stakeholders who are working alongside us to bring the business vision to reality. It is an opportune time for us to gather with all our partners and senior management teams and plan for developments already underway, whilst looking to the future. It gives us the ideal opportunity to discuss our strategic plan for the next 12 months and understand how we can do business better. It also offers the perfect platform for our executives to meet and know each other better while understanding the challenges and sharing ideas, innovations and opportunities. Innovation and evolution were top of the agenda. Some other words we came up with during the conference were unity, tolerance and collaboration.
What challenges do you face in this part of the world i.e. Middle East and Dubai?
Everybody knows the political challenges in the Middle East that cause disruption and have an adverse impact on the economy. However, challenges mean opportunities too. Dubai spent a lot of time on becoming an international city and on building the confidence people have in it. Dubai has done a lot of hard work. Compared to other top international cities it is younger but has some unique features. Let’s put it this way Dubai is different. Everybody has seen Dubai change over the years. Its multicultural society makes it very international and I see it moving towards a leading city in the same league as some other great cities of the world such as London, New York or Singapore. It is a city with a vision that is paying off. Dubai International Airport has surpassed Heathrow as the world’s busiest global hub. It has the vision of increasing hotel rooms, building a second airport, expanding its airline network with the number of new aircraft Emirates is buying, creating more entertainment and tourism attractions such as the new theme parks as well as building brand awareness. All this is targeted at stimulating demand. It needs to ensure that it remains the number one destination in the Middle East. Increase in supply will force hoteliers and airlines to create demand. We will together market Dubai as the destination. It is one way of expanding Dubai.
The fact that Dubai won Expo 2020 is recognition by world economy that this country deserves the opportunity. It is a vote of confidence by the international business community in the future of Dubai
What made Qantas partner with Emirates?
Qantas is Australia’s largest airline and the partnership between Emirates Airline and Qantas is a reflection of Dubai’s prominence as a leading destination and transit point. This alliance resulted in a switch of the stopover for Qantas longhaul flights to Dubai from Singapore helping to significantly boost passenger traffic at Dubai International Airport. The agreement also gave Emirates passengers access to 27 new routes and six new destinations in Australia, New Zealand and Asia leveraging Emirates market Share in Asia-Pacific. What are your plans for Dubai Expo 2020?
Dubai Expo 2020 has got everybody excited about the future. The fact that Dubai won Expo 2020 is recognition by world economy that this country deserves the opportunity. It is a vote of confidence by the international business community in the future of Dubai. It is a sign of the maturity of the city that it can host major events. We are targeting 12 hotels by 2015 in the Middle East region and looking to double that portfolio by 2020.
Is Dubai not saturated in terms of hotels and hospitality brands?
Dubai is now ready for mid-market. It is ready to expand the budget segment that presents a great opportunity for StayWell Hospitality Group. Until now it had been focusing on upmarket tourists and luxury segment. However, not everyone can afford to pay 300 or 400 dollars a night. With low cost carriers bringing in budget travelers, we need to have a lot more midscale and economy hotels and that is what developers are now focusing on. We are facing some stiff competition as there are a lot of good hotel groups here but we are confident of getting a fair market share with our strong brands, excellent resources and level of service. We will grow with Dubai.
What is your current portfolio of brands?
StayWell Hospitality Group operates two brands the up-scale Park Regis and mid-scale Leisure Inn. In addition, we are working on a trendy lifestyle brand as well as a luxury brand.
What according to you is luxury?
Luxury is a highly over-used word. Luxury does not have a standard definition. It is a very subjective word. Luxury means different things to different people. What can be overbearing for some can be comfortable for others. Therefore, we need to do a lot more research before we launch our luxury brand.
How many hotels do you have at the moment and what are your expansion plans for the region?
At the moment we have got 34 hotels operational in Australia, Singapore, New Zealand, China, Indonesia, India, UK and the UAE. Talking about, development and growth in the Middle East, we are really focused on the region over the next 12 to 18 months owing to the scale of opportunity we see here and have therefore set up a special development department. We are in advanced negotiations for two new hotels in Dubai as well as one in Doha. In addition, we are in the process of formalizing a Joint Venture with UAE-based hotel company that will give us seven properties in the region including the Emirates, Iraq, Turkey, Lebanon and Jordan. We are also in talks for a JV in Saudi Arabia. If all goes well, by 2015 we are looking to add 12 hotels in the region – out of these five will be in the UAE. It will give us approximately 3500 keys in the region and out of these 1500 would be in the UAE.
Your target is to have 100 hotels by 2016? How do you plan to achieve it?
We are looking at a number of strategic overseas portfolio acquisitions to reach the 100 hotel target. Our strategy is to build our portfolio through organic growth as well as partnerships. We believe it is achievable and if we work out all these partnerships it will keep me very busy. We recently entered into a joint venture with South Africa based Mantis Collection that will front the growth of our hotel brands throughout sub-Saharan Africa. Under the agreement, the Park Regis and Leisure Inn brands will be established in key cities at properties to be procured by Mantis. We are looking at similar partnerships in the Middle East, China and India that are the growth engines of the world. We expect to have 15 hotels in India, 20 in China, 10 in Indonesia, 10 in Europe, 15 in the Middle East as well as double our hotels in Australia.
Globally speaking what kind of investment are you looking at to sustain this development?
As little as possible. Well, jokes apart… We would be investing about 20 to 30 million dollars from now until 2016. So far with our group of investors and shareholders, StayWell Hospitality Group has equity and / or ownership interests in 16 of our 34 hotels, committing a large amount of investment resources throughout our hotel network.
What kind of return on investment do you expect?
Depending on the various factors such as the city, location, product and supply the return on investment these days generally varies from 5 to 15 per cent. In order to have a good return we need to stimulate good demand.
Speaking about your properties do you have any favourites?
My favourite is anybody who gives me the best profit. No I am joking. I cannot have favourites. I am like the father of the family and, all hotels and people working there are equally dear to me. Therefore, I try to be as impartial as I can be to all – providing them the right support, the right tools and right encouragement so they can grow. I feel extremely proud and inspired when a young manager gets promoted or finds a better job with another hotel.
How has Park Regis Kris Kin Hotel Dubai been performing since its opening?
Park Regis Kris Kin Hotel Dubai began operations in December 2010. To start with 2011 was not as good as we wanted. We had to pay the school fees to establish our business here and build our network. And for that we had to understand the culture, the people and their expectations, the business practices in this part of the world. As a result today we are very confident. We did pretty good last year. In fact, 2013 exceeded our expectations. This year has been even better with record H1 results. We foresee some challenges in 2015 and 2016 with more hotels coming and therefore supply going up. But I am sure Dubai will rise up to the challenge by creating more demand.
We have enjoyed great ranking for three years in a row on TripAdvisor and have had tremendous guest feedback. We host two airline crews Thai Airways and British Airways. It is a reflection of the quality of our product and services as well as the level of safety and security we offer.
Over the last three years you have been pretty quiet in terms of development. Why is that?
Soon after the opening of Park Regis Kris Kin Hotel, Dubai and the rest of the region, was hit by global financial crisis (GFC). Money retreated, bank funding dried up and many left the market. All new hotel projects almost froze. However, the market is now back on track with several new hotels under development that’s opened many new opportunities that we are eager to capitalize on.
What’s your approach towards your owners / investors?
As an owner and investor in the company myself I understand how important it is to have strong relationships with all stakeholders. We place a lot of emphasis in this area through open and regular communication and sharing of our successes and challenges. In each region our Heads of Regional Operation Managers meet with owners on a regular basis and I take a personal commitment to build individual relationships with all owners and investors.
How involved are owners / investors in management of hotels?
At the end of the day the results that we deliver to investors and owners is how they measure our capabilities. My senior executive team is also very involved with investors and owners on a regular basis.
Are owners / investors of the Middle East different?
I don’t believe that the Middle East owners are any different from our other owners. Every owner wants to see a good return on his investment and our relationships with our owners and results are what makes the difference.
As a seasoned hotelier with a flawless record of accomplishment, what advice would you give to up and coming hoteliers who wish to follow your example? What is your secret to success?
My advice – be humble. Try to understand every aspect of hotel operation. Don’t try to be a manager immediately. In order to be a manager, you need to learn all aspects of operation – front office, house-keeping, F & B, finance, sales and marketing, human resources, etc. Best manager is someone who understands every aspect of the business. So grow in your position and you will gain respect from all your colleagues. Remember respect is earned, it is not something you can demand.
Talking about secret to success I believe passion, commitment and hard-work are the three keys to success. You need to have passion for your job as well as everything you do in your personal / private life. Without passion you cannot have commitment. In order to succeed you really need to work hard. There are no short-cuts to success. Learn from your failures and never repeat the
Apart from work, what else interests you?
I try to spend time with my family having a nice lunch or dinner with my two daughters who are 17 and 18. Whenever I get a weekend off, I try to play golf. I like to watch movies such as action thrillers, drama and spy. I also follow business and current affairs documentaries.