This year marks a significant milestone for Singapore-based General Hotel Management Ltd. (GHM). After having established its presence as a creator of stylish, luxury hotels in some of the most sought-after holiday destinations, the company is celebrating its 30th anniversary milestone.
Asian-inspired design and sensibilities are at the heart of GHM Hotels – a portfolio that comprises The Chedi, The Chedi Club and the soon-to-be-launched lifestyle brand, The Serai. The company has established an especially strong presence in the Gulf region with The Chedi AI Bait Sharjah, U.A.E., The Chedi Muscat, Oman, along with The Chedi Andermatt, Switzerland and The Chedi Hotel and Residences Luštica Bay, Montenegro in Europe.
With seven projects under various stages of development in destinations like The Maldives, India, Taiwan, the U.A.E. and Thailand, the company is looking forward to launching The Chedi Katara Hotel & Resort, a waterside property in Qatar, and The Chedi El Gouna, a beachfront property on the Red Sea in Egypt.
GHM’s Chief Executive Officer Tommy Lai adds that this is a transformational time for GHM as it celebrates the brand’s legacy and continues to elevate its delivery of lifestyle experiences globally. “Through our operating experience in uncommon destinations, we have acquired valuable insights, local knowledge and cultural sensitivities that appeal to luxury travelers.”
In conversation with HOTELS, Lai elaborates on the year-long anniversary celebrations, the company’s performance outlook for the Gulf market, how the company persevered during the pandemic and the soon-to-launch lifestyle brand, The Serai.
HOTELS: Explain the structure of GHM? Do you own, develop with outside equity partners, or take a percentage of equity to earn management contracts?
Tommy Lai: As of now, we take predominantly hotel management contracts. Having said that, it’s not that we will not do equity deals going forward. But at this moment, especially during this period of uncertainty – and it was actually a little bit of a blessing in disguise that we didn’t get into those deals with massive equity contributions or key money because this period was actually quite tough if you are in those arrangements. So, we have an understanding with our shareholders that lets us stabilize the company further with hotel management contracts.
But it doesn’t mean that we will not look at the deals that require liberal participation. We have aspirations of creating a hotel site. But at this moment, we are very proud to say that we have a lot of things to do… The last two years were a reset, and we are allowing ourselves some time to catch up.
H: What is your take on the state of the hotel industry affairs, how fluid is it? And how does that impact your planning strategy?
TL: It kind of derailed some of the plans that we had in mind – and we are not alone. So, on a longer-term basis, we readjust our strategy to achieve a similar target. But it may be a slightly longer period to achieve a similar target, or in a different form.
We kicked into preservation mode at the start of the pandemic in an effort to minimize the adverse impacts felt by our colleagues on the ground. This was also to preserve our company as a collective whole so that we could effectively take off again when the situation improves and transitions to the endemic phase. We are now gearing up for the next phase and are very excited to be able to see some light at the end of the tunnel.
H: Talk about the state of your pipeline.
TL: While it’s not a lot compared to many big groups, it is considered to be quite sizeable for a group like us where we don’t usually deliver more than one property a year… But we are looking very positive, going forward with one to two projects to be delivered over the next couple of years. We couldn’t have predicted such a huge leap for us. This year, we’ll probably have two, indicating a 100% increase in delivery. Next year, we’re hoping to have two more projects to deliver. Within the next two years, we’re probably going to have four or more.
H: How do you look at the growth prospects in the current market?
TL: We are no different from any other hotel group and are on the same path when the markets pick up. As I mentioned, we have two property openings this year and probably two next year. So, we are on a 100% growth path. We are in the process of relaunching our second brand: The Serai. We wanted to introduce a slightly different theme — from traditional to lifestyle-driven — to have another engine to propel.
H: How do you see performance and forecasts for Asian and Gulf regions?
TL: It is hard to predict. The situation is continuously evolving, and the forecasting never stops. We are still not out of the woods, although we can see positive performance.
H: How have you been managing the labor crisis?
TL: It is very challenging. Some tough decisions had to be taken because of closure. Some colleagues had to go back to their country in order to be vaccinated. Upon the first signs of recovery, hotels started to reopen for business. This was a challenging time for us as we were going through a period of reset and internal rearrangement. Many of our colleagues were unable to return to GHM immediately due to border and flight restrictions and a number of them had also left the industry during this time. These made it even more challenging for us to manage the expat labor crisis during the pandemic.
H: The other challenge over the last two years were escalating operating costs. Did it impact your bottom lines? If so, how did you tackle it?
TL: Escalating costs is a constant in our industry on an annual basis. So, it’s not unusual. We always have to adjust to catch up with escalating costs to maintain the same GOP. The ROI for hotels and the entry and exit cap rate for hotel assets probably had to be readjusted after the pandemic. Personally, it will be interesting how this asset class is going to change investment deployment. We are looking into various markets that will allow us to substitute from the traditional sources of income. For example, the staycation market is bigger than what we have expected. A lot of things are changing and evolving. Managing costs also gives me a chance to look at opportunities and efficiency.
H: What lessons did the pandemic teach you?
TL: There were a few key learnings that stood out for me. Firstly, that the pre-existing paradigms on how one would manage and operate luxury hotels and resorts can (and must) be continually challenged. An example of this is the pre-held notion about staffing ratios and what it takes to deliver exceptional guest satisfaction. COVID has forced us to evaluate this mindset – and for me and my team to reaffirm our long-held beliefs that it is not just about having staff-to-guest ratios but rather – to cultivate and more importantly, retain the right team of associates. These must be individuals who are unequivocally passionate about delighting the customer and genuinely empowered to make decisions that would achieve unparalleled guest satisfaction.
H: Do you see GHM as a disruptor in the Gulf market?
TL: We are fortunate that our hotels are performing well there. We are not new there – we are a pioneer of luxury hotels in that market. We always strive to be a little different and continue to evolve with time and create what the market wants.
H: Tell us about The Serai, GHM’s new brand.
TL: The Serai targets a wider audience and wider interests. It’s a brand that we are trying to bring to a market with a refreshing change and we are also trying to push the boundary. We are introducing a Serai concept in China, which will be our flagship. We had launched a subtle sneak peak of the brand on our website with video clips announcing the new brand. We are also trying to maintain an element of surprise for now.
H: During the pandemic, which were your best and lowest performers?
TL: Our properties in Europe outperformed in the last two years. But we also know that this extraordinary performance is not going to be a constant.
H: What is the biggest challenge for GHM?
TL: It is not always easy to find the like-minded people to work on a project. Therefore, we have to continue a sustained process of identifying the correct fit to our needs. This has always been our goal.