Banyan Tree to expand in China

To publicise his properties, he relied on word of mouth instead of advertising heavily.

His next marketing strategy - winning awards.

Banyan Tree sought recognition in service, innovation and, more importantly, its environmental efforts. To date, it has won more than 570 awards, with two given last week for its excellence in social and environmental responsibility.

In 2000, he launched Angsana Hotels and Resorts, with two properties in Bintan and the Great Barrier Reef in Australia. Banyan Tree's sister brand was meant to take advantage of opportunities 'that would not fit Banyan Tree', he says.

'It was more of a business proposition than a branding proposition. We were very clear... that Banyan Tree would always be the leading brand, but there was room for a mainstream brand. It was meant to be a more accessible brand.'

As for maintaining the top-notch service that Banyan Tree Holdings prides itself on, he has it all figured out.

He distributes the 10 per cent service charge collected from room bookings equally among the staff in each property every month. Payouts can go up to almost double the salary, depending on the room rates and the size of the hotel.

At Banyan Tree, nightly room rates can go up to US$1,990 (S$2,724) at Vabbinfaru in the Maldives. Room rates under the Angsana brand can hit up to US$2,225 in the Maldives. Competitors such as Six Senses Resorts & Spas charge up to US$1,254 a night at its Soneva Gili property in the Maldives and Aman Resorts' prices are up to US$2,650 a night in Bhutan.

The amount of total service charge is kept transparent for the staff to monitor as it shows how well the hotel is doing in terms of revenue, he says. 'When you pay out your service charge, you create an immediate bond between the hotel's performance and your employees' performance.'

For now, the public-listed company has set its sights on China, a key business strategy it has pursued since the opening of its first Lijiang property in 2005, in Yunnan, China.

Seventeen more projects in China, from Beijing to Lhasa, will open in the next three years.

Another 21 other properties are slated to open in other places such as Mexico, India, Abu Dhabi, the Philippines, Greece, Egypt and Morocco.

On his expansion in China, he says: 'The inbound and outbound numbers are staggering. If you think Japanese tourists created a bit of a wave in the 1990s, the Chinese tourists are creating a tsunami and it's already happening.'

He says although room rates at Banyan Tree's resorts are 10 times higher than room rates in China, the rooms are still being filled up by the Chinese. It is also an opportunity to open up China to the world, he adds.

'There is only a handful of places that foreigners go to, like Beijing and Shanghai. But to the Chinese people in greater China, in Taiwan, Hong Kong and even here, the number of iconic places in China is endless. It is a 5,000-year civilisation and there are so many places the Chinese would like to go to.'

This article was first published in The Straits Times.

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