Serviced Apartment News talks to Ascott’s CEO about the sharing economy, new brands and strategic partnerships.
• Do you think “sharing economy” platforms such as Airbnb and Tujia will become increasingly important for serviced apartment distribution? Will they take market share from traditional OTAs and other distribution channels?
“The growth of mobile internet connectivity via devices like smart phones and tablets has enabled O2O commerce platforms such as Tujia to thrive, and become a viable alternative for distribution of serviced apartments to enable us to reach a wider range of customers, in particular the increasingly savvy domestic travellers in China.”
For Ascott, where a majority of our customers are relocating executives or project teams who stay for an extended period, companies’ HR department, relocation agencies, travel management companies and property agents will still be key distribution channels.
We believe travellers on short stay will continue to book on Ascott’s website that offers best rate guarantee and through travel agents. To ensure customers can make bookings as conveniently as possible, we will make our serviced apartments available for booking on various channels that different customers use.”
• What made you choose Tujia specifically as a partner over other potential alternatives? Are you looking at similar tie-ups with equivalent companies in other regions?
“Tujia is China’s largest and fastest growing online apartment sharing platform and we see incredible potential in our penetration of the Chinese market through our partnership with Tujia. Tujia also manages serviced apartments in China but their strength lies in their online capabilities.
Ascott is the largest international serviced residence owner-operator in China and globally, with a strong reputation for our brands and management excellence. By investing in Tujia, a frontrunner in the online apartment sharing space in China, Ascott has the opportunity to expand into a new vertical which augments our core strength. We can better integrate our offline resources with Tujia’s online capabilities to participate more strategically in the O2O space, and enhance our competitive edge in the serviced apartment space in China. Hence, there is tremendous synergy for Ascott to collaborate with Tujia.
As for tie-ups with similar companies in other regions, we will consider the opportunities as they arise.”
• Why did you decide to create a new apartment brand specifically for the Tujia platform? And can you give us any details of the new brand eg how it will differ from Ascott’s existing brands?
“Ascott’s existing three brands (Ascott, Citadines and Somerset) target the top-tier segment of the serviced residence market and are already well established with our customers in China. Our three brands generally command a monthly rent of above RMB 10,000 (S$2,000).
By forming a joint-venture company with Tujia to operate and franchise apartments under a new brand, Ascott will be able to cater to a growing mid-tier segment of domestic travellers in China by offering serviced apartments with a monthly rent of between RMB 5,000 (S$1,000) and RMB 10,000 (S$2,000). More details of the new brand will be shared at a later stage.”
• Ascott has partnered in recent months with several companies who are leaders in their fields – Samsung, QIA, Quest etc. What do you look for in a partner organisation? Does it have to be a cultural fit with the way Ascott does business, and are there more partnerships in the pipeline?
“Besides an alignment of business interests, there has to be a strategic fit where we can leverage our partner’s strengths to grow our business and enhance Ascott’s competitive edge. For instance, with our vision to develop a next-generation serviced residence, instead of investing in R&D on our own, we are collaborating with Samsung, one of the world’s biggest electronics companies with extensive R&D experience in smart home technologies, to jointly develop Internet of Things-ready smart solutions customised for our serviced residences.
We are constantly looking out for strategic partnerships that will give Ascott an edge in delivering the best guest experience and accelerate Ascott’s growth to achieve our target of 80,000 units globally by 2020.”</p
