The hospitality management arm of Far East Orchard will dramatically expand its Oasia hotel brand to capitalise on the growing tourism market being sparked by Asia's fast-growing middle class.
The Far East Hospitality unit said yesterday that it will add more than 700 rooms to its portfolio over the next year.
Far East Hospitality is a 70-30 joint venture between Far East Orchard - a unit of property giant Far East Organization - and The Straits Trading Company.
The expansion includes Oasia Suites Kuala Lumpur, the brand's first overseas property, which will open early next year.
Oasia Hotel Downtown at 100 Peck Seah Street in Singapore will open in the second quarter, while the 140-room Oasia Residence in the west will be ready in the last quarter of next year.
Far East Hospitality chief executive Arthur Kiong told The Straits Times in a separate interview: "We've decided to look at how we can expand into key Asian cities using hotel management contracts, and to promote our brand Oasia."
Oasia is a business hotel that Far East Hospitality feels has considerable potential among its portfolio of nine brands.
It is also dubbed a boutique hotel, which usually suggests properties of about 100 rooms, but the term has expanded to include
an exclusive experience at an outlet smaller than famous five- or six-star hotels.
The first Oasia hotel opened in Novena in 2011 and occupancy rates have been steady in the high 80 per cent range.
"In the balance of what is ap-pealing to consumers, versus what is profitable to a developer,
the Oasia brand stacked up best," said Mr Kiong.
"The Oasia brand caters to those who are very inclined to health and wellness," he added, noting that the outlets are characterised by "very little food and beverage, virtually no meeting space, juxtaposed in a highly urbanised business district setting".
"We hope to grow this brand in key Asian cities, and fan out to other parts of the world as we attempt to be a world-class company.
"Our customers primarily come from Asia, and Asia will have a middle class of about three billion people in 20 years," noted Mr Kiong .
Mr Kiong said that when he started in the industry 30 years ago, virtually all the top 10 hotels here were large, international names.
These days, those with the "boutique type of operations" make up about 40 per cent to 60 per cent.
Far East Hospitality, which operates hotels and serviced residences, also owns other boutique offerings, including the Village Hotel Katong in Marine Parade, Amoy at Far East Square and Rendezvous Hotel in Bras Basah.
The firm aims to build a sustainable business with economies of scale as the boutique hotel scene can be cut-throat.
This is why Far East Hospitality is also sprucing up its other hotels.
The 37-room Amoy, for example, will be expanded to at least 90 rooms, and it will have centralised operations with the firm's new 320-room hotel, The Clan, being built in Far East Square.
"In total, the two hotels will have 400 rooms, and you need that kind of critical mass to support the back office operations," said Mr Kiong.
"There are a lot of wonderful boutiques, but you need to have the size and centralised operations."
The move will not only attract more guests for Far East Hospitality, but also allow the firm to maximise resources like manpower.
Mr Kiong added: "We've got a portfolio of nine brands catering purely to the mid-market segment... It's a spectrum of different brands but all in the mid-market."
This differentiates Far East Hospitality from other players, he noted, which usually classify their brands by the number of stars.
He said that the mid-tier market is a wide one, so the company's strategy lets it cater to different types of travellers.