Oasia expansion part of Far East Hospitality's plan

Far East Hospitality chief executive Arthur Kiong says the company has leveraged technology and centralised key functions - such as finance - to improve its productivity and keep its workforce lean.
Far East Hospitality chief executive Arthur Kiong says the company has leveraged technology and centralised key functions - such as finance - to improve its productivity and keep its workforce lean.ST PHOTO: SEAH KWANG PENG

Firm seeks to take brand to Sydney and Melbourne next, and is exploring growth opportunities in Asean as well

Far East Hospitality is looking to expand its Oasia brand as part of its diversification strategy.

The brand, which is centred on the theme of wellness and health, has grown rapidly this year, with the opening of Oasia Suites in Kuala Lumpur and Oasia Hotel Downtown in Tanjong Pagar in April.

That added about 588 rooms to its growing portfolio, with Oasia Residence - a 140-room serviced apartment block - opening next month in West Coast Crescent, off West Coast Road.

Far East Hospitality plans to take the brand to Sydney and Melbourne next, possibly within five years. It is also sizing up growth opportunities in other Asean countries, such as Indonesia.

"The international inbound into Australia is about seven million visitors... in comparison with Singapore, we have over 15 million inbound visitors. So there's potential upside for Australia, they have a long runway," chief executive Arthur Kiong said yesterday.

Far East Hospitality can also tap its 50:50 joint venture with Australia's Toga Group, which runs various brands, including Vibe Hotels, under the TFE Hotels umbrella.

Mr Kiong said talks are underway to refurbish one of Far East Hospitality's hotels in Singapore and re-open it under the Vibe brand in 2019. It will likely have 200 to 300 rooms, with a "hip boutique feel".

"Vibe has resonated very well with the new millennials type of travellers... we believe this segment is on the rise," Mr Kiong added.

Far East Hospitality - a joint venture between Far East Orchard and The Straits Trading Company - has a portfolio of about 13,000 rooms under management across 90 hotels and serviced residences in seven countries.

In Singapore alone, it has more than 4,500 rooms - including the new property at West Coast - under five brands, with an average portfolio occupancy of 85 per cent last year. The operator hires about 1,000 staff here.

Mr Kiong said the company has leveraged technology and centralised key functions - such as human resources and finance - to improve productivity and keep its headcount lean.

Recent initiatives include an e-butler service introduced at its Village Hotel Katong last year. The virtual concierge application allows guests to book or communicate directly with hotel departments and curated local merchants.

Far East Hospitality said it will consider rolling it out to its other hotel properties in the near future.

Efforts to streamline work processes at its housekeeping and front office departments at Village Hotel Katong have also resulted in an increase in capacity, with each attendant cleaning 13 per cent more rooms per day, it added.

The operating environment has been challenging for the hotel industry in the past few years amid the uncertainties in the global economy, higher costs and the rising supply of new rooms.

Consultancy CBRE estimated in a recent report that about 7,300 new rooms will enter the market from the first half of this year to 2018. The increased supply is expected put pressure on the occupancy rate.

Despite the challenges, Mr Kiong is optimistic about prospects ahead.

"The global economy being what it is, there will be some short-term concerns but if you look at the long- term appeal of Singapore, I am very sanguine... Singapore has a good track record of reinventing itself."

Mr Kiong cited the ongoing expansion of Changi Airport and the growing cruise industry as potential bright spots for the tourism sector.

A version of this article appeared in the print edition of The Straits Times on September 23, 2016, with the headline 'Oasia expansion part of Far East Hospitality's plan'. Print Edition | Subscribe