HONG KONG—There was nothing wrong with Shangri-La International Hotel Management’s Traders Hotels brand, said COO Lothar Nessmann.
“They actually did very well and have had a good life,” he said of the 30-year-old flag.
But that has not stopped executives from initiating a mass conversion to the recently announced Hotel Jen. Of the approximately 15 Traders properties in the Shangri-La portfolio, approximately 10 will convert to Jen by March 2015. The first, the Hotel Jen Orchardgateway Singapore, is scheduled to open 15 September.
The move, Nessmann said, complements a broader shift in the traveling public.
“When we first started looking at how the world was changing, how the traveler was changing, not only is there a younger and newer age group of holidaymakers and business travelers coming into the market, but because of this new traveler coming, the older and existing holidaymaker and traveler is actually becoming younger at heart and younger in style themselves.
“We took a step back and realized we need to try to be ahead of the curve on this and put together something that is going to interest and capture both of these markets.”
Hotel Jen is the answer, Nessmann said.
Whereas Traders offered a serious stay experience for the serious business traveler, Jen is much lighter and casual in tone, he said. The brand is being positioned as a persona—a professional hotelier who loves life, travel and the adventure of discovering new places. Marketing messages are delivered in the first person from “Jen,” who urges hoteliers to enjoy “my” hotels.
“We are not taking ourselves too (seriously),” Nessmann said.
The look of staff also will fit that bill. Gone are traditional uniforms, replaced instead with more casual apparel that allows for some individuality while still signaling to guests who is manning the ship.
The overarching goal is to provide “an ease of process and simplicity,” the COO said.
Some of Jen’s brand hallmarks include free Wi-Fi, technology charging stations in public areas and complimentary coffee drinks and breakfast items to go.
Will Traders disappear? Not quite, Nessmann said.
“We believe there may be two or three Traders hotels left. … We will continue to work with those properties and make sure they will continue to do well,” he said.
Ramping up
After the initial 10 conversions, Shangri-La executives are targeting an additional 20 to 30 Hotel Jens during the next five years, according to Howard Ho, director of development.
“The immediate changes that we will be looking to put in when the hotels are rebranded will be very much around the soft touches that we have around the employee DNA, around the type and style of the service that we offer,” Nessmann added. “The immediate difference will be seen in that area.”
Key gateways throughout Asia top the targets for expansion. “North America is definitely on our radar,” he added.
Management contracts will fuel the majority of growth, Ho said, although “in selective occasions we will be looking at investing.”
Executives declined to share any dollar value associated with the cost of development and conversions. But as owners of hotel real estate themselves, they are keenly attuned to the need for an affordable business solution, executives said.
“We are not looking to incur a lot of incremental spending. There will be renovations and refurbishments in some of the hotels that were already planned,” Ho said.
The operating model maintains that philosophy of affordability. Hotel Jen features a new staffing guide that consolidates several roles into few. Instead of several operations department heads, for instance, one person will oversee the entire department.
Other cost-savings measures include outsourcing back-of-house functions such as laundry and certain cleaning functions.
“We have a business model that is going to be very sensible going forward,” Nessmann said.
Catering to conversions
Approximately half of the Jen portfolio will be conversion, Ho said. As such, executives mindfully developed a flexible real estate solution that fits a variety of existing assets.
For instance, one developer considered razing an office building to make way for a new-build hotel. But Ho and his development team convinced the developer that a Jen could mesh with the existing building’s bones.
Ho said he is concerned less with the total cost per key for each project than with the return on investment for owners.
With a flexible approach to development comes an inconsistent footprint for each hotel—something Nessmann said works in the brand’s favor.
“The fact that our properties as they stand today are so extremely different already, we look at this as a great advantage. We are not in the cookie-cutter area. The properties are different. The characteristics are different. The cities are different. And we really wanted to stay like that,” he said.
Consistency will come through the brand’s hallmarks: excellent customer service and high-quality amenities that have become a staple of all Shangri-La hotels, Nessmann said.