If you can't beat them, join them.
The sharing economy is here to stay, with websites such as Airbnb and HomeAway threatening traditional hospitality companies.
But instead of fighting against the tide, Ascott is keeping up with it.
In August last year, it announced a tie-up with one such online apartment-sharing platform - Tujia, the Chinese equivalent of Airbnb.
GAINING AN EDGE
If you are able to get the Chinese customers very familiar with our product and they subsequently stay with us when they travel, it is a competitive advantage that not many other operators can bring to the table.
MR LEE CHEE KOON, Ascott chief executive officer
This works out for both companies, Ascott North Asia managing director Kevin Goh said. Tujia will help Ascott extend its distribution channels by listing its global and Chinese properties online.
"The crux of it is leveraging on each other's DNA. They see themselves as a technology firm and have a few hundred programmers behind them. But if you want our guys to build a website that is trying to achieve the intent that they are trying to achieve, it will be a very long process," he said.
A joint venture (JV) the two have set up will also allow Tujia to hand over some of its offline properties for Ascott to manage - making use of Ascott's hospitality experience of about 30 years. The JV will be launching a mass-market brand in China sometime this quarter.
As Ascott chief executive officer Lee Chee Koon sees it, it is no longer enough to just have scale and presence in cities, and look after guests well. "Consumer trends and technology are changing... we need to take a step back and look at what are the capabilities we must build to make sure we are competitive," he said.
If Ascott is managing a property for a third-party owner - it has plenty, including Vanke China, Yuexiu Property, Mitsubishi Estate and Saudi Arabia's Abdul Samad Al Qurashi Group - it must deliver better returns than any other operator in the same space, he added.
So, the company looked at start-ups in the hospitality or real estate space for ways to enhance its competitiveness - Tujia was just one of hundreds it has considered.
To do this, the Ascott team spoke with venture capitalists in various countries, including Singapore, China and the United States, to get updates on the latest ideas and trends and make contact with the companies. "We look for people who can help secure our space in this particular field in the future. It's exciting and very fun... But we are not a venture capital fund, so, for us, it must make a difference in how we see the competitive landscape and how it makes us stronger," Mr Lee said.
THE GLOBAL BUSINESS
Technology and the rise of affluent Chinese are the reasons why the company is optimistic about China.
The trend of Chinese outbound travellers - about 120 million last year - will continue to grow, noted Mr Lee. "If you are able to get the Chinese customers very familiar with our product and they subsequently stay with us when they travel, it is a competitive advantage that not many other operators can bring to the table," he said.
The numbers clearly bear this out. Revenue from Chinese guests staying at Ascott properties globally rose 36 per cent year-on-year for the first nine months of last year, more than for other nationalities. They made up 10 per cent of guests in Ascott properties during the period, the second highest. Japanese nationals accounted for 12 per cent.
"When we first started operating in China, the main nationalities staying in our properties were the Americans, Koreans, Japanese and Europeans. Now, you see the Chinese staying too," said Mr Lee.
Ascott has been expanding quickly - it has about 43,000 serviced residence units globally, of which over 14,000 are in China. This is up from over 33,000 units globally just two years ago.
Apart from growth in China, the company has been expanding in the Middle East. It opened Ascott Tahlia Jeddah and Ascott Sari Jeddah in September and November last year.
Nine more properties are slated to open in the region this year and the next - including in Riyadh and Jeddah in Saudi Arabia, Muscat and Sohar in Oman, Dubai in the United Arab Emirates and Istanbul in Turkey.
Ascott's private equity fund, in partnership with Qatar Investment Authority (QIA) which it announced in July last year, will also pave the way for opportunities in the Middle East and other cities QIA has taken positions in, Mr Lee said.
The US$600 million (S$850 million) fund, which has a global mandate, has since acquired a property each in Paris and Tokyo.
Ascott also made its maiden inroads in the US last year, with Ascott Residence Trust's US$163.5 million purchase of a hotel in New York's Times Square in July. It hopes to do more in the country, Mr Lee said.
It is exploring opportunities in Africa, although nothing has been concluded. "If you look at the continent as a whole and its one billion population, there's a lot of potential."
Whether it's scouting for the latest hospitality start-up or expanding into new frontiers, Mr Lee believes Ascott must continue to push its boundaries.
He said: "We just had a retreat in Hanoi and I told the team: 'If you want to achieve something you've never had, you have to do something you have never done'."