REPORT FROM SINGAPORE—While the world reels from the economic crisis, Alila Hotels & Resorts is making the most of the situation to venture into new territories.
“Now is an excellent time to embark on new developments,” said Mark A. Edleson, president and CEO of Alila Hotels & Resorts. “The long lead times needed for a hotel project mean properties being designed now can expect to open in two to three years, by which time we expect the markets to be on a rebound.”
Also, construction costs have dropped substantially from a year ago because of declining prices of concrete and steel, Edleson said.
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Alila Diwa Goa |
Alila Hotels & Resorts plans to open 12 hotels in India by 2015. The first will be the Alila Diwa Goa on Majorda Beach in South Goa. Although the Alila Diwa Goa was scheduled to open in September this year, it may be delayed and expected to open in the fourth quarter instead. Another hotel, the Alila Bangalore, is on track to open in July 2010.
“Not all of the targeted 12 locations have been secured, but we have four signed contracts in Goa, Bangalore (Bengaluru), Calicut and Cochin (Kochi) and (a memorandum of understanding) for Jaipur,” Edleson said.
Alila is working on the concepts and initial designs with the appointed architects for its projects in Calicut and Cochin. The company is talking with other developers and expects the pace of its growth to pick up after it opens the Alila Diwa Goa later this year and the Alila Bangalore next year.
Being among Asia’s leaders in luxury boutique hotels, Singapore-based Alila Hotels and Resorts is known for its exclusive properties designed by award-winning architects that offer personalized hospitality in great locations. Therefore, it’s natural the company focuses on getaway destinations for all its targeted properties. Alila’s entry into India has focused on already established destinations popular with local and foreign visitors.
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Mark Edleson |
“This allows us to top up the domestic market with our followers from overseas markets,” Edleson said. “Once we’re better established in the local market, we can be more adventurous when selecting destinations.”
Currently, there are three Alila Villas properties—Alila Villas Uluwatu and Alila Villas Soori in Bali, Indonesia, opening in June and November 2009, respectively, and Alila Villas Hadahaa in Maldives that’s targeted to open in July 2009.
Additionally, the company is set to open its beachside resort, Alila Hansar Koh Samui, located along Thailand’s Bophut Beach in the third quarter of 2009 and Alila Hansar Bangkok located in the heart of Thailand in the fourth quarter. However, India is the company’s biggest venture to date.
“India, with its growing domestic market, long and colorful history, and wealth of design and crafts make it a perfect target for a lifestyle boutique brand such as Alila,” Edleson said. “There’s tremendous opportunity to interpret Indian design vocabulary into contemporary hotels and resorts that hasn’t been fully exploited yet. Service levels in predominantly local brands can be improved as well.”
Edleson doesn’t dispute that, although in general, the projects by Alila under construction are proceeding at the normal pace some projects have slowed because of the economy.
“The major delay we’ve experienced with our projects (in India) is being able to getting high-quality finishing in the hotels,” Edleson said. “We’re very demanding of the quality of construction. Details make a big difference.”
It normally would take about three years for any new hotel to reach a stable level of operations, Edleson said.
“Because our business return is dependent on sharing profits with the developer, we don’t expect quick profits but believe India is a market with so much potential it’s worth taking our time to gain market awareness and positioning. We’re confident the fresh approach we bring to the Indian market will benefit our developers and Alila over the long term.”
Despite of the global financial turmoil, 2009 will be an inflection point for Alila.
“We still hope to open a hotel some day in Singapore, but we don’t have any projects yet,” Edleson said.
Alila currently has six properties operating in Asia: Alila Cha-Am Thailand,; Alila Ubud Bali, Indonesia; Alila Manggis Bali, Indonesia; Alila Jakarta, Indonesia; Kemang Icon by Alila Indonesia; and 3 Nagas by Alila in Laos.