Case studies of successful small & medium enterprises and how they have or have not used market research
The hotel and hospitality business in Asia has been through turbulent times in the last decade. While local attractions in Singapore such as Resorts World, River Safari, and the Formula 1 have boosted tourist numbers, the threat of a new economic crisis hangs over the industry.But in whatever business environment we operate, what is always in our control is the ability to gain market share.
Loh Lik Peng, founder of several independent hotels in Singapore, London, and China comments that the key success factors in his ho-tels business was giving guests a ‘different experience’, ‘being fun’, and ensuring that the hotel attracts both foreign and local patrons.
Loh, a lawyer by training, decided that the legal profession was not for him. He embarked on ventures in the hotels business almost by acci-dent. “It kind of happened”, says Loh “The opportunity came along to develop the hotel ‘1929’ and I happened to be there at the right time. I draw inspiration from collecting stuff, I go around buying things, and in hotels it can all come together”.
His ventures are individual properties that are developed into profit centres in their own right with no common branding across the hotels. Loh says that market research plays very little roll in his decision-making for opening a hotel. It starts with having the right gut feeling about the hotel, “I just look at the building and say this is cool, we can do something with it”.
Wanderlust, located in Little India Singapore, has recently been awarded the best new boutique hotel in Singapore. Loh engaged four different interior designers to develop the hotel, each were assigned one floor of the hotel to produce their own unique design. Sometimes the brief to the designers was simple – “have some fun!” Each floor has its own theme, with a blend of the contemporary and the tradi-tional. While modern in design, guests are each given information leaflets in the form of traditional passports, airline boarding passes and bus tickets of a bygone age.
The patrons of his hotels are a very specific segment. While room rates are at US$200 a night or more, guests are from all income groups – younger singles and couples, families, and retirees. They fall into an attitudinal segment – people who do their own research ordering accutane online (about hotels) and who are a bit more adventurous in their travel.
Beyond the unique designs of his hotels, one of Loh’s key success factors has been in the food & beverage (F&B) offering, something boutique hotels do not pay so much attention to or overlook com-pletely, says Loh. The F&B gives an important point of differentiation for the hotel, attracts local patrons and this generates word of mouth. With it, the proportion of guests staying on business increases over time. F&B actually accounts for 50% of their revenue, although mar-gins are lower than from revenues from accommodation.
Loh has been approached by several market research firms to assist him in all manner of areas, but they seem not to hit the mark. While lack of perceived value is one reason for not engaging research firms, he also feels that research as it is sold to him ‘is just not fun’. How-ever, this does not mean he rejects research as a concept, indeed involvement of others (specifically his members of staff), is an integral part of the strategy planning. When a hotel is close to opening, they will survey the businesses around the area, the other hotels, the F&B scene, etc. They will then set their rates and the type of F&B offering accordingly.
Mid-sized organizations such as the ‘Unlisted Collection’ are poten-tially fertile ground for research companies, and in this example for innovation research. Loh admits that the innovation part is the best part, but among some of these organisations there is an image prob-lem for the research industry – you need to be more fun!He will convene staff in group discussions, with the intention of com-ing up with good ideas. “It’s a very open process, we encourage peo-ple to throw in lots of crazy ideas, and then we whittle it down to something that will meet our budget and our vision”. Loh admits that there is potentially a role for external professional moderators in this exercise but points out “Yes (I would engage them) if they were inter-esting enough. We work in a very freewheeling fun kind of way, but often these things (research) are very dry, that is not the way we work. This process (of brain storming) is the best part of the work, and it really has to be fun”.