Interview: Staywell Hospitality CEO Simon Wan

After opening its first Middle East hotel at the height of the global financial crisis, Staywell Hospitality is looking to finally get the ball rolling in the region. CEO Simon Wan spoke to Hotelier Middle East on a visit to Dubai and was not shy about setting out his company’s ambitions

Simon Wan, chief executive officer of Staywell Hospitality Group, is in Dubai for his company’s global management gathering, attended by joint venture partners from around the world.

Speaking to Hotelier Middle East in one of the suites at the Park Regis Kris Kin, a Staywell hotel and host venue for the event, he talks through some of his Middle East expansion plans.

“Our growth is based on two planks,” he explains.“One is normal organic growth; one by one. So we are negotiating for two new hotels in Dubai — one in Business Bay, one in the Marina. That will add 600 rooms to our 400-room stock. So we will have 1000 rooms.

“We are also in very advanced stages of having a local hotel management group join us, which has seven hotels right now in the Middle East.

“They have got two in Abu Dhabi, they have hotels in Lebanon, Iraq, Turkey and Saudi Arabia.

“If we are successful in concluding this transaction, immediately we are going to have nine hotels, plus two more and we will have a great platform. Ten hotels is a good start in the Middle East.

“And we are now also negotiating in Doha and Egypt as well. So I’m very confident that in the Middle East we’ll get to 15 hotels in 2015, with the UAE having five or six hotels.”

This would indeed represent a “good start”, were it not for the fact that Staywell actually arrived in the region almost four years ago, with the opening of Park Regis Kris Kin in late 2010.

As the Hotelier Middle East archives document, the Australian company had grand ambitions for the region, with Wan talking about possible locations in Qatar, Bahrain and Abu Dhabi.

Looking back now, he admits living up to the promise of growth in the Middle East proved to be a tough task.

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“In hindsight, 2010/11 was a bit of a tougher year for most hoteliers in Dubai. The room rate dropped, the demand wasn’t quite there; so it was a steep learning curve for us. I call it ‘paying school fees’ to learn about the market. [It’s about things like] finding the right people working for us and understanding the margins, people’s food and beverage habits.”

However, Wan acknowledges the silver lining of what was a tough period, pointing out that lessons have been learned across the industry by his fellow classmates.

“I certainly think the adjustment after the global financial crisis has been very good for Dubai because it has got rid of the speculators and it was a very speculative market,” he explains.

“Those who can afford to stay, meaning they’ve got deeper pockets, are more understanding of the market and are more appreciative of the market.

“So hopefully the next phase of Dubai is a lot more sustainable, with people with a lot more experience, deeper pockets and staying here on a long-term basis.”

At present, Staywell’s global portfolio is built on two brands: Park Regis, predominantly targeting business travellers and typically located in the heart of major cities; and Leisure Inn, positioned as a midscale option.

Wan anticipates that the majority of the new hotels, at least initially, will be under the Park Regis brand, although the midscale option is likely to find a regional home in Saudi Arabia.

“In Saudi Arabia, we’re talking about major cities,” he says. “I think we’re going to have multiple launches there; all three brand new Leisure Inns. It’s got a big domestic market. It will also help us to build our brand awareness because a lot of Saudis come here to Dubai.

“The first one will probably [be open] within 12 months and within two years, we will have three.”

He expands on the importance of making sure the brand makes the right impact immediately.

“We have to be careful how we launch Leisure Inn in this market,” he says. “Each market has got its demand and expectations.

“Some of my colleagues just go blindly and launch a brand into a market. I remember a particular brand [launched] in India and [the hotel] had only a tiny little restaurant. Unbeknownst to them, F&B is huge in India.

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“No matter how small the hotel is, it will have two or three restaurants. So they now need to change. We need to be careful and know exactly what we need to do to meet customer expectations.”

Also on the agenda for the company are two new brands: one lifestyle and one luxury. The former will make its debut in the trendy Shoreditch area of London in early 2016, while the latter remains in its formative stages.
For both, Wan and his team are thinking hard about how they want to position themselves and what that even means.

“We need to define what luxury is. Luxury is a personal thing. Luxury to you might be different to me,” he explains.

“Some people like wall-to-wall marble, chandeliers hanging down and gold-plated things everywhere. That might not be your personal taste. It can be overbearing to some people. We are now really working through defining what luxury is. We’re trying to work that out.”

He adds that the luxury brand is unlikely to come to the Middle East — and almost certainly not the UAE — anytime soon.

“There are already a lot of top-end luxury hotels in this market. I think the UAE should probably go the other way.

“Maybe Dubai is now ready for some mid-scale and some economy brands.”

If Dubai is indeed ready to diversify its offering, the charge will be led by Staywell’s recently-established Middle East office, headed up by Jose Ventura, formerly vice president business development Asia, Pacific, Middle East and Africa at Preferred Hotel Group.

“We are now back here and we have graduated from learning things and hopefully our second push will be a lot more successful,” Wan concludes.