HotelsHow CEO Arthur Kiong led the Singapore-based hotel group to step up its ambitions of becoming a world-class operator of lifestyle brands.

Farewell bland stays, Far East Hospitality ups hotel game

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Arthur Kiong, CEO of Far East Hospitality.
Arthur Kiong, CEO of Far East Hospitality.

Far East Hospitality (FEH) may be a mid-sized hospitality operator in Singapore, but the Covid-19 pandemic also brought significant growth opportunities for the company.

In many ways, the pandemic has urged us to reconsider our purpose: from mere commodities or lowest-priced options providing shelter, to unique and quality contributors of a destination’s attractiveness.

In March this year, FEH introduced The Clan Hotel as a destination concept property that brings to the fore the history of clans around Singapore's Amoy Street area. It also made its first foray into the resort and spa category with the launch of Oasia Resort Sentosa and Oasia Spa after taking over the former Movenpick-branded property.

In the region, FEH in March launched the Quincy Hotel Melbourne, the first Quincy brand outside of Singapore, and on 1 June 2021 opened its second Village property in Japan – Far East Village Hotel Yokohama. Earlier this year, FEH also signed a strategic alliance agreement with Indonesia’s Artotel Group to pursue regional expansion.

Travel Weekly Asia speaks to Arthur Kiong, CEO of Far East Hospitality for the latest updates.

The interview has been edited for length and clarity.

Oasia Resort Sentosa, which opened its doors on 1 September, marks FEH's first foray into the resort and spa category.
Oasia Resort Sentosa, which opened its doors on 1 September, marks FEH's first foray into the resort and spa category.

What are some of FEH's most innovative responses in adapting to the pandemic?

The Covid-19 pandemic is quite different from previous crisis in terms of magnitude. However, the saying “In the midst of every crisis, lies great opportunity” has never rung truer.

For the hospitality industry, the key to survival lies in the ability to adapt with agility and resilience, to reinvent business models and leverage technology, thus, emerging stronger post pandemic.

Besides expanding into new business segments and geographic markets, we are also looking at transforming jobs. Hotel jobs in a post-pandemic world are going to look different. There will be an increased reliance on digital tools. Functions such as reservation, registration, housekeeping, and security will be highly automated. However, automation requires investment in technology. This can be expensive – especially the initial capital expenditure. The pandemic has also highlighted the risks pegged to a reliance on foreign workers. Hence, in order to attract locals to the hospitality industry, the job scope has to be redesigned.

There will be greater emphasis on soft skills and performance to deliver unique and enjoyable guest experiences. For example, chefs must not only be able to cook, but communicate their craft and techniques with finesse, and in a coherent manner. Thus, the definition of service will evolve from a “subservient function” to “experience creation”.

Granted, the topic on job redesign, technology adoption, industry transformation has been talked about since 2012. However, the pandemic has palpably accelerated this transformation such as professionalising hotel jobs and hopefully, we can create a distinctive style of Singaporean hospitality.

Which of these adaptations do you think will become long-term changes?

The pivot towards niche concepts will be a key long-term change.

We will continue to look at opportunities abroad where there is strong domestic tourism. The aim is to reinvent ourselves, and come out of this pandemic in a model that will allow us to compete head on with the international players.

Pre-pandemic, hotels were commodities that catered to all types of travellers – couples, families, businessmen, and tour groups. However, post-pandemic, we will see hotels pivot to specialisation rather than generalisation. This will be executed through the creation of new brand experiences.

Hotels will also begin to compete as part of a larger concept, in terms of precinct or proposition, rather than a standalone building comprising rooms. One example is The Clan Hotel Singapore, which is positioned as a modern luxury hotel with a nostalgic story to tell by bringing to the fore the history of clans around the Amoy Street area. The retail offerings of Far East Square, the quirky cafes and restaurants lining Club Street district, its connectivity to Chinatown on one side and Central Business District on the other — The Clan Hotel is a destination itself as it incorporates and leverages the strength of the whole precinct to deliver a differentiated experience.

The Clan Hotel offers a destination concept and amenities geared towards a new generation of experience-driven travellers.
The Clan Hotel offers a destination concept and amenities geared towards a new generation of experience-driven travellers.

In many ways, the pandemic has urged us to reconsider our purpose: from mere commodities or lowest-priced options providing shelter, to unique and quality contributors of a destination’s attractiveness.

I believe that this approach will woo international guests as well. For discretionary international travel to take off, the destination must first promise to be so compelling and enjoyable that it is worth the hassle.

You have been a strong advocate of quality tourism in Singapore. How will these new kind of tourists look like and do they fit into the profile types that FEH want to target too?

Firstly, the new breed of tourists will have heightened hygiene expectations. Hotels must not only be clean, but perceived to be clean and safe. This is where travellers will be watching hoteliers closely to ensure one upkeeps hygiene protocols within the hotel premise. Perception will become a reality.

Next, these travellers will be willing to pay a premium for convenience, flexibility, and safety. Peace of mind will not be compromised and this means paying a local professional guide – one who can navigate local rules and regulations – to provide travellers with a sense of security. This also translates to longer but less frequent trips.

Travellers will also want to travel with family and friends more so than with strangers. And, they will prefer to dine in the privacy of their rooms rather than heading out.

Lastly, there will be greater adoption of contactless technology but greater emphasis of personalisation.

At Far East Hospitality, our properties are segregated by traveller profiles. Oasia for the wellness conscious, The Barracks Hotel for the heritage aficionados, and The Clan Hotel for the young millennials. This approach has allowed and continues to enable us to offer guests services with high levels of personalisation.

Quincy Melbourne makes FEH's first overseas property under the Quincy brand.
Quincy Melbourne makes FEH's first overseas property under the Quincy brand.

Looking ahead, what are your plans for FEH in Singapore and around the region? Which brands and markets will you be prioritising, and are you looking to expand into any new markets?

Even at optimistic projections, domestic demand in Singapore is very far off to hotels achieving pre-Covid occupancy and capacity. The market is simply too small for the number of hotel rooms available. It may fill about 5% to 10% of total available room and inventory on an annual basis while hotels, in general, require about 40% occupancy at pre-pandemic rates to cover operating costs.

As such, at Far East Hospitality, we will continue to look at opportunities abroad where there is strong domestic tourism. We are looking at Australia and Japan, and considering China too. We are also eyeing Europe, where intra-travel in the continent is buoyant and strong.

The aim is to reinvent ourselves, and come out of this pandemic in a model that will allow us to compete head on with the international players.

The goal is to increase our portfolio to 25,000 rooms by 2025. That is a 20 per cent growth rate. While it is aggressive, it enables us to come out of this pandemic in a model that will allow us to compete head on with international players and put us among the top 50 hotel companies in the world.

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