Frasers Hospitality CEO said they want to go where rates and revenue are higher because, especially in key gateway cities, that’s where money can be made.
SINGAPORE – Despite continued industry expansion into the economy
extended-stay space, the CEO of Frasers Hospitality said the company won’t be
chasing that specific niche and will continue to focus on the premium space of the
rental market.
“Ultimately, it boils down to where can we make money,” Chin
Fen Eu, CEO of Singapore-based Frasers Hospitality, recently said at HICAP in Singapore. “We want to go where
rates and revenue are higher because, especially in key gateway cities, that’s
where money can be made. People can pay for this higher level of affluence. So, only the premium higher price point can justify [doing it.]”
Frasers start
After starting as an investment
banker, Eu has worked for Frasers for the last 12 years and was appointed CEO
in January.
Eu said Frasers Hospitality, a subsidiary
of Frasers Property Limited, first started in the extended-stay accommodation in Singapore
because the company realized expatriates could pay a higher price point and
were looking for better services. So, the company opened Fraser Suites and Fraser Place, which
offers a hotel experience in the residential space.
The company, now in its 25th
year, has expanded to six more brands and more than 100 locations in 20 countries throughout
Asia Pacific, Europe, Africa and the Middle East. Eu said Frasers owns about a
third of its properties and operates the rest of them.
Growth targets
Eu said Asia is an “exciting place” for the company to grow.
“Japan is a very resilient market that definitely has an
established multifamily market,” she said. “There is opportunity for us to
really explore the premium segment there.”
Eu said Frasers targets tier one cities in China where the rental
demand continues to be strong. She said in markets like Sydney, Melbourne
and London, the rental crunch continues to create chances for new business.
“While workers continue to migrate into the cities, they need
housing. There’s always a segment of tenants and renters who are looking
for premium products,” she said.
They're looking for more immersive experiences. They want to connect. They want to do things. They want to be part of a community… We are very focused on making sure that all of our guests feel connected and that our guests take away something.
Chin Fen Eu
Eu added that COVID has shown the
hospitality industry that extended-stay business is very resilient.
“Throughout COVID, across the properties that we operate, we
have not gone below 60% occupancy. And in cities, it has stayed above 70%.”
She said the new work reality of digital nomads and the
blending of business and leisure has created a strong environment for Frasers’
business.
“People are wanting to stay longer to experience life there… So,
when people travel, they tend to want to plan for a longer time,” Eu said. “You
can imagine if the person is going to stay longer than two weeks, they will
want to have some amenities. They will want to have a public space that allows
them to do things and have a more home feel to be able to meet people and forge
friendships.”
She said being primarily in the extended-stay space means the
company is catering to a different kind of customer.
“They're looking for more immersive experiences,” Eu said. “They
want to connect. They want to do things. They want to be part of a community… We
are very focused on making sure that all of our guests feel connected and that
our guests take away something.”
That includes thinking differently about the food and beverage
side of the business and how it operates its restaurants.
“We allow people to use the space throughout the day. So, it's
a bit of a working space that they can use as well. We’re quite flexible,” Eu
said. “You can see it as an extension of the room space. Because ultimately, it’s
really about allowing our guests to do things with people, and the relationships
that they can find when they're staying at our property.”