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A chain reaction

Jul 12, 03 | 3:11 am

The SARS crisis will not scupper Langham Hotels International’s (LHI) rebranding plans.

According to Nigel Roberts, GM of the Great Eagle Hotel - which will be become the flagship Langham Hong Kong on October 1 – everything is proceeding as planned.

“Obviously, we have had to rethink and adjust some of our timing because of the crisis, but we are still right on target.”

Owner Great Eagle Holdings remains bullish on the hotel sector after recently announcing a 16% jump in net profits for 2002, mainly as a result of reduced borrowing costs.

Kevin Murphy, VP of marketing and development, says LHI could offer other independent hotels in the region an alternative to tying up with the global giants like Starwood, Marriott and InterContinental.

“There is a widening gap between many owners and management companies. Most of the owners have reached this position with a great sense of regret, and the onus is very much on the operating companies to understand that shift – and deal with it.

“With discussions we have had with other owning companies, it is evident that some of the management companies do not have the understanding or background to build on long-standing relationships with Asian owners – but are a bit quick to tear them down.”

Murphy believes that the global management companies are “all about branding and distribution”.

“Many of the traditional functions, such as human resources and information technology, are contracted out these days, and that is an option that is open to everyone.”

The emergence of LHI signals Great Eagle’s intention to spread its wings throughout Asia, China and, ultimately, to even further horizons. The company owns several properties that currently carry the flags of international brands, including the Sheraton Towers Southgate in Melbourne, Le Meridien Boston and the Sheraton Auckland Hotel and Towers. It also owns the legendary Langham Hotel in London –currently branded as a Hilton – which gives the new brand its name.

According to Murphy, there is no “immediate plan” to rebrand these properties, particularly as most have long-standing management contracts in place. But many industry observers are placing their bets on most, if not all, of them eventually flying the LHI flag.

Meanwhile, Murphy is busy talking to other Asian owners who share the same vision.

“It is not far fetched to anticipate that there will be some smaller, well-funded, more-focused companies like LHI, with high-quality internationally experienced management, which can find a place in the overall picture that is rapidly making the majority of hotel-product differentiation very homogenised,” he says.

“We anticipate that growth will come from the wider expansion options that our consideration of future partnerships in management and joint ventures with other medium-sized owning companies could now bring.

“Further management possibilities for high-quality independent properties seeking branding, rebranding or repositioning, which prefer to choose not to be swallowed up in larger organisations like some of the multi-branded conglomerates, could certainly be candidates.

“We have observed, and often hear from other owners, that some of the recent growth of multi-brands has been at the cost of their past stronger owner/management relationships, where the mutual respect, shared goals and original vision were more easy to maintain.”

According to Murphy, rapid advances in technology have helped to level the playing field for smaller hotel companies.

“We believe our own origins within LHI, and intimate knowledge of Asian values, coupled with strong internationally experienced management working from primarily a fellow owner’s perspective, will allow some of that expansion for LHI to occur in Asia Pacific and China in the coming years.”