Rosewood Hotel Group boasts some of the finest hotels in the world and is constantly sizing up potential deals and development. Helping lead the charge is Group COO Symon Bridle. In this exclusive one-on-one, Bridle discusses the group's Southeast Asia growth, luxury hotel operations, developer demand for the Rosewood brand and destinations the brand is after.
1. What is the overall outlook on Rosewood's business as we stand right now and moving into 2017?
Bridle: If you look at the business overall in terms of where we are for the year, what we're seeing is year-on-year occupancies have been quite similar to the previous year. We're tracking very much in line with that. What we've seen collectively across the collection is good growth in ADR. We're seeing the propensity for rates to move up, but occupancy is staying quite consistent. We're comfortable with that kind of focus, where we're able to leverage rates.
On the development front, 2017 will be the big focus in terms of projects opening. In Asia, we're pushing to get Phnom Penh in Cambodia open at the end of this year, but that will likely slip into 2017. Then we'll have Rosewood Phuket opening, which is very exciting because that will be our first resort in Southeast Asia.
Then there is Rosewood Sanya, another resort, in the Hawaii of China. It's a good positioning point for us because of the exponential growth coming out of the country. And if you flip back to Phuket, over the last three years, you've seen the China market now become the largest inbound market into Phuket. You can see the importance of that China market.
The other openings that we have is the re-opening of Hôtel de Crillon in Paris. That's obviously going to be a really fantastic opening, putting a landmark hotel back into such a fabulous city.
We have another hotel in Mexico coming up, in Puebla, which hopefully will be the end of this year, but more likely 2017.
Looking forward into 2018, we still have a focus in China. Guangzhou is going to be one of the key projects that we open there. It's the third main city in China if you think, Beijing, Shanghai, Guangzhou.
The markets are quite encouraging in all the regions. When we look at Europe, we've got good activity. We're very close to announcing some additional deals there. Even in the U.S., and the Americas, we're seeing some interesting movement there. We recently announced Papagayo in Costa Rica, but that's not until 2019. Santa Barbara in California, 2018, potentially. We also have São Paulo in Brazil. We missed the Olympics.
2. What is it about Southeast Asia you find so attractive?
Bridle: You're seeing a lot of economic activity there. Plus, from ourselves as a brand, it's where we have the least current presence. When we look at the macro economics and the traveling capacity that's going to come out of Asia, to have properties in this part of the world is really essential to establishing the brand.
In a way, we have a little bit of the last-mover advantage. A lot of the big luxury brands have already been here. We're seeing very good opportunities where developers are looking for new partners in the luxury segment.
3. That's a good point. You're competing with the Amans of the world, Four Seasons, Ritz-Carlton...and some of those luxury brands have gotten to a critical mass. Is Rosewood, then, filling in the gap there for developers?
Bridle: There is that stage in a brand's life where it's become very well recognized, very well exposed. Not all developers are building 10, 15 properties. Some of them are building very singular projects. I think they're looking for very singular relationships. For example, our project in Bangkok: That owner is only developing one hotel. We're able to synergize on a very personal level being a smaller company. There is direct access to myself or our CEO Sonia Cheng. This appeals to some of these developers because they're not being seen as one of many. They're very focused as one of the few.
RELATED: To learn more about hotel investment and development in Asia-Pacific, and to meet the key decision-makers and brands in the region, the Asia Pacific Hotel Investment Conference (APHIC) is next May in Bangkok.
4. Who is the Rosewood developer?
Bridle: We've seen some developers who are really private families; they're funding it through their own resources. They may be multi-nationals and involved in other business, but there comes a point in life where they feel they want a hotel. That developer is still particularly pertinent in Asia.
When you're moving into different markets like Europe, it's a different thought process. It may be through a fund that is running it and they're looking for a commercially driven relationship. They want that uniqueness in the property, but they also really want to make sure that the company they go with can deliver the numbers.
On the one hand, we have to whet the luxury, but we also have to sell it in a way that makes economic sense to a developer. At the end of the day, we're in business to make money, but we're trying to do it in a fun, creative way that allows us to be distinctive as a brand.
5. How would you characterize the overall luxury operating environment? Where is it the strongest and where are some of the challenges?
Bridle: If I take a very simplistic view with the Beijing market, for example, in the last couple of years, we've definitely seen that market strengthening. We're seeing good strength in Shanghai. We're not represented in Shanghai and it's a market we'd love to be in. The challenge is then going into secondary markets. You're not necessarily going to find the price points.
If we move outside of China, Hong Kong has suffered particularly on rates, but it's coming from a very high platform. It's linked to the China market, which did slow down. Everyone is very confident in where Hong Kong will go in the next couple of years. You've still got this backbone of confidence in the market.
Bangkok has got a lot of supply going into it. There's a certain volatility in Thailand, but there's also this great resilience in the market. What we see is that no one's really gone for that absolute ultra-luxury price point. We see there are opportunities there because clearly there is this demographic, this influential traveler in Asia, who's looking for these experiences that are above the traditional five-star.
6. During the recession, luxury was the first to drop off, but is typically the first one to come back. Supply globally has been kind of muted over the past few years, but it came back up. When you see new supply, are you worried only by new luxury supply or does new supply in general have any kind of impact on your business?
Bridle: We still look more in who's coming into the ultra-luxury market. For example, in Abu Dhabi, one of our key competitors is the Four Seasons, which is just 200 meters away from us. We definitely have to manage and watch it. But we think it can be good for the market because it also attracts more like-minded clients. What you do have to watch is the meeting business, the event business—there may be pressure on the price points there.
7. You recently took over management of the Capella Georgetown, which is interesting. Any further news you can share? What is the focus or strategy for that property going forward?
Bridle: It was named the No. 1 hotel in Washington D.C. by Travel + Leisure, so it's already got great recognition. Inevitably we will look at a couple of areas where we maybe want to try and bring a little more of that Rosewood ambiance in. Overall, it was a great fit for what we're doing and the style of the hotel that we wanted to have. It's a great location. In many respects, tit's the a perfect type of hotel to take over if you have the opportunity.
8. What is the sweet spot for you in terms of key count for a Rosewood property? Is there one, or is it based on what the type of product it is?
Bridle: We do try to manage around where we think it works effectively. For us, if you're looking at that ultra-luxury space, you're looking at around the 250-key mark. We do a very good job there. Beijing is slightly larger than that at 283.
If you're really looking for the sweet spot in luxury, when we look at our Phnom Penh or Bangkok project, they're around 150 keys. That's a good box to be working in. If you go a little bit bigger, obviously to an owner or developer, maybe the economies of scale look a bit nicer.
9. At the ultra-luxury level, does Airbnb worry you?
Bridle: Airbnb is evolving very quickly. I don't think we yet see it at the ultra-luxury level, although Airbnb does have offers that clearly can fit into that price point. Today we see that as more the exception rather than the rule. We see Airbnb more attacking from the bottom up. It's something you monitor because it is in the market and you have to be cognizant of that. We don't really see it positioning against ultra-luxury.
10. Where do the bulk of your bookings come from? At your level, are you using online travel agencies at all, or is it still mostly direct bookings and via travel agents?
Bridle: We would still be more weighted to travel agents. We also have a corporate base. Our OTA base generally is lower. A lot of the people looking at ultra-luxury are not really booking through OTAs. If you take properties like the Las Ventanas, if someone's going down there, they want to speak to someone. They really want firsthand information. If they're regulars, they want to make sure they're going to get their same villa, their same spot on the beach. We obviously see OTAs as being part of the environment, but it's not a segment that dominates us. Other segments for us are providing more of the business.
11. Does any of your inventory rely on the OTAs at all, or maybe if there's need?
Bridle: Interestingly, we see, for example, Abu Dhabi has quite a strong OTA market coming out of Saudi Arabia. That's maybe a trend in the market. They're quite happy working through one of those OTAs. We do see slightly higher in that market where we see lower in the typical U.S. market or the European market.
12. You mentioned Shanghai as a destination market you'd love to be in. Are there any other markets you're looking at right now and hopeful to find a partner with that you can do a project in?
Bridle: Tokyo we'd love to be in, but you've seen a lot of the new developments now in place, going up to the Olympics. The next wave of development there will probably come a little bit later. For Hong Kong, it's kind of 'Watch this space.' We hope to have something to announce formally later in the year on Hong Kong.
In Europe, we'd like to put a foothold into Germany, and a further foothold into Italy.
13. The Carlyle, A Rosewood Hotel in New York: Anything there in terms of news or a renovation that's on the cusp?
Bridle: A renovation is coming. That hotel is a key hotel to us. There are renovation plans currently in discussion, but the dates are not yet 100-percent formalized. It's a landmark for us and we need to ensure that consistency of brand. That one is very much on our agenda for bringing it into the next generation.
14. Is there anything out there that worries you or keeps you up at night?
Bridle: Human capital. At the end of the day, luxury is about people. Yes, you've got to have great Wi-Fi, you've got to have a great project, etc., but the real essence of luxury is people. One of our key challenges is finding the right attitude, the right service desire to get the right teams together. They really do make the difference. That, I think, is probably one of our biggest challenges: managing the human resources to ensure getting the right people in the right place. Without that, you cannot deliver the experience.