October 2019 - Savills Hotels Asia Pacific hosted the seminar at Sofitel Metropole Hanoi with attendees including Hotels Owners, Developers and Senior Industry Representatives. The event explained the process of appointing hotel operators and international brands as well as discussing how operators interact with hotel owners during planning and construction stages.
Regarding the event, Ms. Nhung Pham, Head of Marketing and Business Development for Savills Hotels APAC, stated: “Hospitality projects require intensive levels of planning before construction commencement. Having been involved in numerous feasibility studies and operator selection assignments in Vietnam and the Region, the Savills Hotels Team understand that mistakes during initial stages may lead to considerable increases in development costs. We organized this event to share experts' experiences and explore how to effectively work with hotel operators to ensure an effective tendering process”.
At the event, Mr Mauro Gasparotti, Director of Savills Hotels, guided participants through the entire process of selecting a management company and a brand from the planning stage until the negotiations and finalization. Mauro also discussed the importance of a business plan and how it will affect the brand. “With the increase of regional and international brands and operators, developers have a variety of choice for upcoming projects. The goal of the operator appointment is to have the suitable brand for the right product with a well-structured commercial terms. This is only obtainable if the correct tender process is in place – starting with the precise identification for the products’ positioning.” Mr. Mauro added.
Discussing on the relationship and interaction between operator and developer, Mr Dan Reed, Executive Vice President, Technical Services from Onyx Hospitality shared his viewpoint: “The technical services function at ONYX plays a crucial role in every step of a hotel’s design and construction phase, offering expertise from the review and conceptual planning stage at the beginning, interpretation of the brand value and product design at the profile and construction stages, right to helping transition the project into operations mode as it approaches opening.”
Mr Dan also commented on the future opportunities in Vietnam market: “Like many other key Asian cities, Ho Chi Minh City and Hanoi are seeing a surge in the home-sharing trend. This gives hotel operators room to focus on differentiating themselves from homestays, while offering a new product that exceeds the needs of the sharing economy, creates an upside for developers and guests, and is adaptable for both existing sites and greenfield projects. With Shama Hub, we combine the foundational proposition of Shama with smart engineering, playful design and a witty mindset to meet the need for innovative design and short to medium term living solutions on a space-efficient floor plate, whilst appealing to a rising community of travelers termed as the informal generation.”
A panel with industry experts provided different opinions on the control and protection viewpoints between developers and operators. Mr Mauro Gasparotti, Director, Savills Hotels mentioned: “Vietnam is among the most promising and fastest-growing countries for hotel operators; Vietnamese developers rely on international brands to ensure quality of construction and management. However, as the typical management agreement is a long-term contract, it is crucial for developers to understand the commercial terms and the management proposition that they are going to enter for the next 10-20 years. This is true especially in a mixed-use project with villas or condotels, where the obligation with the operators is passed to the buyers. We consult with local developers on the right process of operator selection and ensure fairness into commercial relationships with foreign brands”.
Mr David Lawrence, Partner at Pisut & Partners and Moderator of the panel added: “One of the major roadblocks to closing hotel deals is miscommunication between Owners and Operators. This event helps to eliminate that roadblock by allowing Owners and Operators to better understand one another’s perspective in the context of a live negotiation.”