Hotelier India speaks to Philip Ho, Vice President Asia Pacific of Leading Hotels of the World, about the 80-year-old company’s business plans for the future, their growing footprint worldwide and what they have in store for Indian hotels.
Hotels must apply for inclusion to be a part of Leading Hotels of the world and they face a rigorous application process. What are some of the parameters they must adhere to?
Philip: There are about 800 checklist items that we look out for, to be a part of the Leading Hotels, hotels need to meet certain criteria such as it has to be the best hotel in the city, the service standards need to be high, simple little touches like asking guests who request a wake-up call, if they would like a second follow up call.
So it’s in the details, do they meet the expectations of the global luxury traveller. What happens is we send a mystery inspector and based on their report, it needs to be approved by a board of directors, and the approval needs to be unanimous.
There’s an inspection every year and if a hotel fails the inspection three times in a row, they are struck out from the organisation.
What is the advantage for hotels joining LHW?
Philip: We represent iconic individual hotels, hotels which are iconic in nature and because most of them are independent hotels, they join us for two reasons, they join us for two reasons, one is for recognition as a globally recognised luxury hotel and the second is because we provide global sales, marketing and distribution services for them.
So their customers in the US can simply make a local phone call or they could make bookings on our Japanese websites. We have 23 sales offices around the world that provide this support. It’s much more cost effective than being a part of a chain brand.
What are the other organisations who are your competitors?
Philip: There are other organisations that support independent hotels but there’s no one who can compare to our size, in terms of the number or the comprehensiveness of coverage.
I would say we’ve got the largest number of independent luxury hotels; we have the largest global sales organisation for luxury independent hotels.
There’s much talk about how the number of luxury travellers in China and India is steadily on the rise. How do these two markets compare?
Philip: Both markets are important to us, but at this point in time, the business for Leading Hotels out of India is larger than the business out of China.
Indian travellers by nature are sophisticated, particularly in our segment and they want to travel independently and be in control. We’ve got a lot of amazing iconic hotels around the world. And here in India the Taj Mahal Palace Hotel is representative of the quality you find in Leading Hotels around the World.
For example there’s the Sukhothai hotel in Bangkok which is a very iconic hotel, the Imperial in Tokyo, or the Ritz in Paris. Each of them are unique and have special stories behind them, such as the Ritz, Coco Chanel lived in the Ritz for 35 years and today there is a Coco Chanel suite, which still has some of the original furnishings.
We are investing in the India marketplace in terms of people, in terms of advertising and that’s how we’re trying to attract Indian travellers to see our more than 450 unique masterpiece hotels.
Are you looking for more brand visibility with the customer himself?
Philip: For us the travel trade is important, that is one touch point for us. Through them we want to reach out to a lot of consumers, we reach out to consumers through the travel trade is important. Corporate business is important for us, all travel segments effectively.
Please tell us about your business model?
Philip: Hotels are our customers on one hand, they apply to be members of leading hotels and once they’re accepted by our board of directors, we would serve them, our global sales office actively promotes and sell them globally, and they pay us a membership fee, there is also a reservations fee and both components contribute about 50-50 to our income.
That’s our business and revenue model. Our goal is to generate revenue for the hotels. Our other set of customers is of course, the actual guests, our commitment is the quality of the hotels.
Membership terms are 3-5 years and hotels that do not meet our quality standards may not get renewed. In fact last year we’ve had more terminations than we’ve ever had in the last ten years.
“Additional services provided by the organization include extensive sales and promotional activities, advertising and public relations support, and an array of special programs for member hotels and their guests.” Please elaborate on each one of them.
Philip: In terms of marketing we do a lot of advertising and we get a lot of hotels to participate in that so that we can tell the unique stories of these hotels. We would develop editorial features that allow us to talk about these stories.
They tend to be themed, so one of them would be to talk about hotels that used to be palaces or castles, another theme would be having Michelin starred restaurants.
Another theme would be hotels that have amazing art collections. Hotels tend to have high seasons and low seasons, we would help hotels to get more guests in low seasons by organising campaigns through the low season. Most of these cases we do with our travel partners, incentivising them, offering them volume based incentives.
On the sales support side, we have 23 offices. We just opened our Delhi office just about one month ago. The sales offices support our hotels in terms of the corporate segment, the travel trade segment, groups, and our loyalty program.
We just launched it this year, there’s a rewards component to it, so all you have to do is have 5 stays and you get one night free at any of our hotels worldwide.
There’s a simple mechanics to it and we’re been very happy and successful with the growth in numbers, the numbers are good. I just got the numbers this morning for India and we grew 50 percent in over a year.
The luxury traveller was supposedly the last to be affected by the recession. How did it impact your business in the luxury space?
Philip: Our business in Asia Pacific this year has grown about 30 percent, so effectively this year it doesn’t feel like there is a global financial crisis in India. Our Indian business is growing rapidly.
Could you share three key trends of luxury hotels in the world?
Philip: We conducted our annual research both pre and post the global financial crisis; pre crisis the number one emotional need that luxury travellers look forward to was to be pampered.
After the crisis, the number one emotional need was to be entertained. So being pampered is not important anymore, not in the top three, which surprised me, the need now is to be entertained, inspired and excited.
It’s all about the experience. It is expected that they will be pampered. We are providing our customers access to experiences so that these needs are being fulfilled.
Just last month we organised an autumnal wine and truffle experience in a small villa in Tuscany where guests go truffle hunting with the dogs, and chefs cook up a storm with those very truffles. You can access private vineyards and check out the vintage wines. There is one day when you can spend time checking out the Tuscan countryside in a Ferrari. So it’s about being entertained, excited and inspired.
What does LHW do with all the statistical information it gathers?
Philip: We do this research to better cater to the needs of consumers and create greater experiences. We also use the research to fine tune our standards so that we continuously meet the expectations of luxury travels.
In some markets, it is very important to be addressed by name. So we check if there is engagement, an attempt to start a conversation.
With international brands arriving in India on their own, how does it affect the need for organisations such as yours?
Philip: There is always a place for organisations like ours, because there will be hotel owners and developers that want to remain independent, for them it’s a passion for the hospitality business.
For example and we have a lot of them in Europe, where families own hotels for multiple generations. We have more than 20 hotels that have been in the family for more than three generations.
So in many ways, hotel owners and developers in this part of the world may initially start out to use these global chain brands but eventually they want to create their own identity, their own legendary hotels and in doing so they choose to be independent but without losing global sales and marketing support, which is where we as an organisation come in and give them the control as the owner and developer of the hotel but with the same infrastructure and support as a global chain brand. You get the best of both worlds.
Besides Leading Spas, which are the other divisions on the cards?
Philip: We now have a programme called Leading Golf as well where you can stay and play golf at the same time. So we do have iconic places like the old courses at St Andrews, which is one of those places you have to be if you’re a real golfer. You have to play there. So we have courses in Vietnam and Phuket as well. And a fabulous new resort in China called Hangzhou.
