City & Country: Impiana to leverage integrated developments

Impiana KLCC is ranked 16th out of 235 hotel brands in Kuala Lumpur on TripAdvisor

HOME-GROWN Impiana Hotels & Resorts Management Sdn Bhd has been expanding swiftly on the back of a fast-growing hospitality market. This year, the group added about 1,000 rooms to its portfolio, bringing the total number of rooms under the Impiana brand to about 2,100.

In the next 8 to 12 months, the group plans to launch at least two hotels, which will raise the number of rooms it manages to over 3,000. Its gross operating revenue increased to RM100 million in 2013 and is expected to grow by an average of 12% to 15% per year with an average profit margin of 40% and above.

The occupancy rate for Impiana’s resorts ranges from 68% to 70% while for its city hotels, it is 70% to 72%. According to Tourism Malaysia, the average occupancy rate for hotels last year was 62.4%.

“Moving forward, our main growth strategy is to build our brand faster via recognition from winning awards and focusing on developing hospitality management contracts as the manager and operator of hotel asset owners,” says Francis Chung, the group’s executive director of corporate strategies and hotel operations.

Impiana will continue to identify, invest, build and operate hotels and resorts in strategic locations. Locally, the group is concentrating on growing its base in satellite cities and areas, such as Penang, Iskandar Malaysia in Johor and Sabah and Sarawak.

The group is also considering extending its reach to the beachside town of Hua Hin in Thailand, which is becoming more popular with travellers. It is also studying opportunities in several countries in the region, including Bali in Indonesia, Siem Reap in Cambodia and Myanmar.

Chung says Impiana is open to any joint ventures and mergers and acquisitions in Asia-Pacific.

The group has announced that it will double its RM500 million asset base by 2017. It currently has a portfolio of seven hotels, four of which are in Malaysia, namely Impiana KLCC Hotel, Impiana Hotel Ipoh, Impiana Resort Cherating and Premiera Hotel Kuala Lumpur. The other three are in Thailand — Impiana Resort Patong, Phuket Impiana Resort Chaweng Noi, Koh Samui and Impiana Private Villa, Kata Noi.

The Impiana group was established in 1994 by chairman Datuk Seri Ismail Farouk Abdullah, starting with a hotel in Subang, Selangor, which has since been sold.

Ismail is group chairman of KAB Group, which owns the Impiana group. KAB Group consists of Impiana Hotels and Resorts Management (1HRM), Rimbunan Raya Sdn Bhd and Institut Teknologi Perak (ITP). All three entities have common shareholders.

Ismail has also been a director of Shangri-La Hotels (M) Bhd since 1979.

Chung says Impiana is open to any joint ventures and mergers and acquisitions in Asia-Pacific

The business of managing hotels
Of late, many developers have been launching various integrated or resort-themed developments complete with serviced suites or hotel components. In August, it was announced that Tanco Holdings Bhd had engaged Impiana to manage and operate Splash Park Suites, a resort segment of its first resort development in Palm Springs Resort City.

The 23-acre Splash Park in Port Dickson, Negeri Sembilan, has a gross development value of RM600 million. Upon its completion in 10 years, it will be the largest resort and water theme park in Port Dickson.

Splash Park will be built in three phases. Phase 1 will comprise a 3.24ha water park, restaurants, entertainment and retail stores and a 250-room hotel complete with meeting, incentive, conference and exhibition facilities. Phase 2 will have more serviced units while Phase 3 will consist of a hotel.

The serviced suites are offered on a sale and leaseback basis with a guaranteed rental return of up to 9% a year over nine years and are priced at RM800 psf.

Commenting on the move, Chung says the group hopes to leverage the new supply of such developments. “We already have many years of experience as a manager and operator for hotel asset owners.”

The group manages and part-owns Impiana KLCC hotel in KL, of which Petronas is the major shareholder. It will also manage Impiana Hotel Melaka, owned by Semarak Murni Sdn Bhd, when it is completed in 2015, and Premiera Hotel, which is owned by Mara Inc.

Impiana hopes to continue to replicate its success in securing more hotel management and operator contracts. Chung reveals that the group is in talks with several developers in Penang and Medini in Iskandar Malaysia, but declines to provide names. “We are at different junctures of negotiations. Some of these companies are public listed while some are not.”

He adds that although the developers have the option of building and managing their own hotels, they understand the long-lasting value of appointing a reputable operator.

Also, while they may hire the best general manager in the industry, there is always the worry that he or she may resign any time.

“Different general managers have different styles and standards,” says Chung, adding that that may lead to a lack of consistency and brand image. “An unknown brand needs a longer time to gain recognition.”

A standalone hotel would also have limited marketing tools and channels, he points out.

Embracing technology
In a world where most travellers are highly social and constantly plugged in, an increasing number of hotels are realising that having a mere online presence is not enough.

A Google study of 11 Asia-Pacific countries in July, involving 11,000 interviews, showed that 83% use online platforms to plan hotel stays and about half of these travellers book their accommodation online.

According to Bambos Kaisharis, Google’s head of travel for Southeast Asia, who presented his findings at the Web In Travel (WIT) Conference in Singapore recently, Asia-Pacific travellers see the web as fundamental to their hotel staying habits.

The research also shows that travellers want it simple. Asia-Pacific travellers use an average of four different sources of information when planning their next hotel stay while emerging market travellers use more (up to five in Indonesia, for example). Some 14% say they are overwhelmed by information.

Hence, it is vital for hospitality brands to build and maintain a solid online presence. Chung agrees that the Internet works like a double-edged sword that should be handled with care.

“It’s a love-hate relationship, but we’ve learnt to embrace it,” he says.

He adds that Impiana is probably the only hotel group that measures the general manager’s key performance index against reviews on Tripadvisor.com, one of the world’s largest traveller sites.

“One of our operational strategies is to ensure that we are always mindful of our rankings in the industry. Gauging our placing on TripAdvisor is one of the initiatives.”

According to Chung, the Impiana brand must be in the top 10 or top 10 percentile on TripAdvisor compared with competing hotels and resorts in locations where it operates.

Impiana KLCC is ranked 16th out of 235 hotel brands in Kuala Lumpur (top 10 percentile) while Impiana Ipoh is ranked eighth out of the 35 listed hotel brands in the city (top 10).

A Voila solution for Impiana’s CRM programme
The Impiana group is the first and only hotel brand in Malaysia to implement a global loyalty card called Impiana Privilege that is powered by  Voila, the world’s largest loyalty programme for independent hotels. With over 250 partner hotels and 500,000 members, Voila acts as a supporting brand network similar to the Star Alliance and OneWorld for frequent flyer programmes.

With Voila, members earn and redeem points across a wide variety of hotels and redemption partners, like airlines and retail partners, globally. The points can also be converted into points for purchases on Amazon.com. Registration with the programme is free in any of the participating hotel brands.

So, how much has Impiana invested in this customer relationship management programme? Nothing, says Chung.

According to him, Voila operates on a pay-per-performance model, taking a commission of 9% out of each successful booking.

“It is a win-win situation for all three parties — the hoteliers, the guests and Voila,” he says, adding that the commission is far lower than the fees charged by online travel agencies. Agoda.com and Expedia.com charge 15% to 25%.

Since the launch of the loyalty programme six months ago, Impiana has signed on about 2,000 Voila members.

Future trends
Chung sees more tourist arrivals in Malaysia due to Visit Malaysia Year 2014 as well as in the region as the European and Japanese markets recover. He is confident that Impiana will continue to grow on the back of its market segment strategies.

Impiana’s city hotels and residences target the business and MICE sector while the group’s resorts aim for those travelling for leisure. In fact, Impiana Villas caters for travellers looking for a luxurious experience.

Chung says there is a new trend in the industry with the so-called “new generation hotels” targeting the young and rich travellers. He says these hotels, which offer fully integrated Internet protocol networks and connectivity, target the Gen Y and Gen Z and are gaining traction in the US. There are signs that the trend is making its way to Singapore.

New generation hotels are very technology driven and their guests check in and even pre-book tables and meals via their tablets. Instead of the formal attire we are used to seeing in city hotels, the staff here dress in casual polo tees and pants.

Although Chung does not expect the trend to catch on in the region, he believes elements of it might be applicable to future hotels as the Gen Y and Gen Z mature.


This article first appeared in The Edge Malaysia Weekly, on December 9, 2013.