‘S not the first time Frasers Hospitality has hit the expansion trail in the middle of a recession.
|Global presence: Frasers has a presence in nine key cities in North Asia, South-east Asia, Europe, the Middle East and Australia|
Back in 1998 when the Asian financial crisis was wreaking havoc on business, the high-class service apartment owner and operator opened its first two apartments in Singapore.
Recently, with business stuck in a global slump, Frasers signed a deal to run a 212-room apartment complex in Shanghai.
It also made its debut in the Middle East – in Dubai and Bahrain – early this year and opened its second service apartment project in Scotland.
In May it launched an apartment project in Singapore. Also on track to be rolled out this year is its first Malaysian property, Fraser Place in Kuala Lumpur.
And that’s not all. In July, Singapore-based Frasers unveiled a second brand, Modena, to cater to road warriors – professionals who spend most of their time on the road.
It may seem foolhardy to expand when most others are cutting back, but for Frasers it’s a calculated move that appears to have worked.
After opening its first two properties in Singapore in 1998, the group went on to make an imprint in South Korea, China and the UK.
Today it has a presence in nine key cities in North Asia, South-east Asia, Europe, the Middle East and Australia.
‘We are not treading without caution,’ says CEO Choe Peng Sum. ‘But we do feel that there is an opportunity for the service apartment industry to gain a stronger foothold in the hospitality industry – and we want to be able to capitalise on opportunities that avail themselves.’
Frasers now manages more than 5,000 individual residences. And with another 4,000 already on the drawing board, it is on track to operate close to 10,000 by end-2012.
‘Our asset-light business model gives us scalability and we have been fortunate in establishing strong business partnerships to support our expansion,’ Mr Choe says.
‘We have focused on greater penetration of our key markets, as well as constant innovation of our products so we stay relevant to our residents.’
Frasers’ core strength is managing service residences. And with 11 years experience behind it, Mr Choe says the company has learned to meet and anticipate the needs of the long- stay traveller.
‘Our properties tend to offer not just large, elegantly appointed rooms with kitchens or kitchenettes, but are also equipped with comprehensive gyms, recreational areas,’ he says. ‘They also offer healthy breakfasts, full 24-hour concierge and security services.’
Corporate clients used to account for a big chunk of Frasers’ business, but the leisure segment is growing rapidly to take over as the main customer base – thanks to the central location of the company’s apartments.
‘Our occupancies have held despite the economic crisis,’ Mr Choe says. ‘Rates have slipped a little but our business model of establishing a sizable long stay base has helped us somewhat weather the storm.’
Frasers will continue to look at opportunities in key cities, he says. ‘In the Asia- Pacific, clearly the strong growth markets are India and China.’
With its latest deal to run the 212-apartment project in Shanghai, Frasers has become the city’s biggest service residence operator.
Source : Business Times – 5 Nov 2009