When you deal with a conversion, mandatory brand standards can sometimes be a deal breaker as owners don’t want to make massive investments to make the property compliant.”
— Olivier Berrivin, MD, WorldHotels Asia Pacific.
This pandemic highlighted how independent hotels are increasingly exposed to financial loss. A soft brand agreement will allow independent and boutique hotels to implement solid sales and marketing strategies.
Further, they can negotiate flexible terms with the industry players as they will benefit from the association with an international brand. Owning companies don’t need to sell up or enter into more complex agreements (either franchise or management), and they traditionally cover the higher end of the market.
Keeping this in perspective, the BWH Hotel Group recently underwent some changes designed to build its new image as a hotel chain that can offer everything from midscale up to luxury. The WorldHotels properties, for instance, want to retain their identities, independence, and freedom while leveraging sales and marketing support.
This is along with the distribution level only a major international player can offer, and this is where the soft brand option makes sense. Olivier Berrivin, MD of WorldHotels Asia Pacific, explains to Vinita Bhatia why BWH Hotel Group is increasingly focusing on its softer brands and what this means for WorldHotels and independent asset owners.
Were softer brands like WorldHotels more fortunate in weathering the pandemic than their branded counterparts?
The first component that owning companies like in a soft brand is the lack of design and brand requirements, which obviously have a financial impact. As we target the luxury sector as a priority, we are trying to appeal to independent hotel owners who have been running their properties for years un-branded. The soft brand offer provides them with increased autonomy around things like operations and design while still benefiting from distribution and loyalty networks.
Moreover, the absence of conventional ‘brand standards’ and additional requirements you would typically have under a standard franchise or management agreement is helping those properties control their operational costs better. It is, therefore, no surprise to see the current level of interest with soft brands as an alternative option.
In addition to these limited requirements and to support better our partners during the pandemic, we implemented a series of measures. These include fee waivers, reduction of loyalty points charged back to properties, an increase of hotel redemption compensation, and waiving of co-op marketing fees. This move resulted in a very low number of properties leaving the network as we are into this together.
Conversions will probably take a while longer to materialize as owners in APAC want to see the situation stabilizing before making a contractual commitment.
— Olivier Berrivin, MD, WorldHotels Asia Pacific.
How, and why, are softer brands like WorldHotels becoming increasingly appealing in today’s environment, be it with developers or travelers?
The soft brand model gives more flexibility to the developers because of the minimal number of brand requirements. When you deal with a conversion, mandatory brand standards can sometimes be a deal-breaker as owners don’t want to make massive investments to make the property compliant.
From a customer’s perspective, we can see a rise of ‘lifestyle’ expectations as travelers want authentic, local experiences, not just a stay in a hotel room that will look exactly the same, regardless of your destination. These travelers are now considering alternative booking channels as they don’t only focus on money well spent but also on time well spent.
How is WorldHotels expanding its footprint in the Asia Pacific, especially in India?
The past two years have obviously been slower when it comes to pure brand development and the focus was actually on the retention of our portfolio. We have several offices in the APAC region (Bangkok, Beijing, Shanghai, Singapore, New Delhi, Tokyo, Sydney) and increasing our footprint is one of our top priorities. We are witnessing a surge in projects, more specifically ‘green fields’, especially in Vietnam, where we expect some activations
over the next couple of months. Conversions will probably take a while longer to materialize as owners in APAC want to see the situation stabilizing before making a contractual commitment. India is definitely a priority market because of its size and potential. We already have some partner properties there and we expect our portfolio to grow further in 2022, thanks to the support of our New Delhi BWH office.
Currently, WorldHotels has four collections – WorldHotels Luxury, WorldHotels Elite, WorldHotels Distinctive and WorldHotels Crafted. What are the differentiating aspects of each of them for developers and travelers?
Each Collections correspond to a need and target different customers. ‘Luxury’ celebrates iconic establishments that are recognized as a local landmark. The ‘Elite’ Collection targets upper-up scale properties recognized for the elevated level of service. We then go to the ‘Distinctive’ collection for upscale hotels delivering a welcoming lifestyle and unique experience in the most desirable locations. Last but not least, our recently added ‘Crafted’ Collection, an all-inclusive concept that captures the spirit of the destination through design and creativity resulting in an emotional connection.
Most hotel owners and developers were in survival mode throughout the pandemic. How are you working with independent and boutique hoteliers in India and small, regional chains of fering them the safety umbrella of larger hotel brands?
Our current portfolio in India is four properties. International travels have not resumed yet, and those hotels rely primarily on the domestic market for their production. We priorities supporting them with our local representative office and our sales team until the situation returns to normal. Thanks to our global sales network, we’ll be focusing on international
corporate, MICE, and consortia segments once traveling becomes a reality again.
How is WorldHotels highlighting that it can offer asset owners and developers superior revenue based on the property’s location?
Our office in New Delhi supports the Singapore regional office with leads and negotiations as direct communication is a must and nothing can replace efface-to-face negotiations. We target conversions of upper upscale and luxury properties as a priority.
We also have several newly-built projects being discussed as those properties will open over the next couple of years and contribute to our expansion in India and the whole of APAC. The existing partnership with the Lalit Hotel Group is an additional selling tool to support our growth in such a big market and we see plenty of opportunities as we move forward in 2022 and beyond.
What kind of support do you extend to these hotel developers and owners to improve hotel profitability?
We support independent luxury hotels by delivering revenue generation
services, business data, and optimization tools through our global network of performance and revenue organization with flexible soft branding options. Our partnership is not a
management agreement, and we do not involve ourselves with the day-to-day operational requirements as that lies with the hotel team.
Many independent hotels in India constantly battle the perception that they might not have the same high standards as global brands. How are you helping them counter this perception?
In the luxury segment, many independent brands recognized worldwide are actually located in India (The Taj Group of Hotels, The Oberoi Group or The Leela Palaces, Hotels and Resorts). These independent groups have constantly received awards in the luxury
segment for years. The Indian luxury sector has clearly nothing to prove as they deliver outstanding performance when it comes to service, and their properties are stunning. The current perception about standards might actually be something independent hotels experience more in the midscale segment vs. international brands competing in the same category.
Has it become easier to convince owners of standalone hotels to go for branding as they see the gradual shift of customers from non-branded space to branded space?
Globally, we’re seeing an increasing number of independent owners who finally acknowledge the benefits and importance of joining a network for a series of obvious reasons and this applies to India as well to some extent. I’m referring to properties who rely
on their respective domestic markets and try to increase ROI or ADR by tapping into the international inbound, be it corporate or leisure, depending on their locations and markets.
The international MICE sector is also a component that will motivate the properties with adequate facilities to feature themselves as the main providers of such events. India has plenty to offer when it comes to combining work and leisure activities, and all
opportunities will have to be maximized to make the country a relevant choice.
When you get these independent hotels in your portfolio, how are you migrating unorganized hotel room inventory to organized segments so that these conversions add tremendous value to all the stakeholders?
In case of a conversion, the hotel has been running independently for years. They’re often very well established in their respective markets, and most achieve a decent business level. Due to changing trends and increasing competition, both branded and unbranded, they have to reconsider their business model and enter an affiliation agreement under a soft brand to remain competitive.
We’re very flexible with the technical approach to ensure that their existing PMS can be connected to our own Central Reservation System without any significant investment and guarantee an optimized flow of business in a very timely manner.
The owner will see the actual benefits of global distribution and increased exposure in a very concrete way. We obviously provide recommendations regarding room types and market segmentation before the actual system migration. Still, it’s ultimately up to the management team at the property level to acknowledge our PRO’s recommendations and implement accordingly.
Do you think most of these conversions or rebranding will occur in the leisure space?
The locations of the various projects, whether it’s a CBD property in New Delhi or a resort in Bali, will dictate the segmentation. Historically, we have always focused on corporate, MICE, and consortia segments as they’re the ones with the better return and are less subject to seasonality. A resort in Bali, Phuket or Nha Trang will need more support on the Leisure side, and our global sales teams are also using all their resources to deliver on that front.
