Australia central to Far East Hospitality growth plans
Far East Hospitality has underlined the “huge” potential of Australia’s hotel sector as it outlined the rationale behind significant investments in the market over the last year which have swiftly taken its portfolio from 18 to 80.
The Singapore-based hotel firm completed its acquisition of a 50% stake in Australia’s Toga Hotels in August. Last November, it acquired Rendezvous Hospitality Group which includes nine Australian properties, three of which are now owned.
Chief executive Arthur Kiong told media at ITB Asia in Singapore that the deals have grown its range of brands to nine, with Toga’s Vibe, Adina, Medina, and Travelodge now under its umbrella.
“We are no longer a niche player in Singapore – our footprint extends to Oceania, Asia and up into Europe with Germany and Denmark,” he said.
Despite an abundance of opportunity in Singapore-based Far East Hospitality’s “own back yard”, Kiong explained the political and economic risk of such an investment had seen the company look instead to Australia.
“We thought Australia would be good complement because, while growth and return on investment might not be as high, it has a different economic cycle and the transparency and the language give us some confidence,” he said.
“Australia was a market we were looking at last year and we indicated that if we venture into Australia it wouldn’t be half-hearted. It has to be meaningful and done in a decisive manner.”
He highlighted significant potential for growing the number of international visitors heading to Australia with the Chinese and Indian inbound markets a particular focus, to be wooed with food along with “awareness and a product that resonates within those markets”.
Far East’s interest is firmly in the mid-market segment, with Kiong explaining that instead of focusing on price and star rating, it will tackle the “extreme diversity” of the tier by revising the way it categorises its target clientele. Instead of looking at demographics, the company is instead looking to the “psychographic” nature of its customers, grouping them into urban explorers, road warriors, cultured cosmopolitans and the trendsetters.
“Customers today are looking for something that’s elegant and relevant,” Kiong said. It will target different brands at different psychographics with the aim of having several properties in a very concentrated area to deliver economies of scale and centralise services.
Meanwhile, the JV will also see Toga manage the Australian Rendezvous properties, with Far East in talks to take Toga brands into Asia.
Email the Travel Weekly team at traveldesk@travelweekly.com.au
arthur kiong far east far east hospitality hotels toga hotelsLatest News
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