As one of the founders of MyALN, the private luxury travel site in China, Frank Lin, I suppose, has got to walk the talk. He’s got to constantly be sourcing for new ideas and hotels for his members who he says are increasingly adventurous and seeking different experiences.
And so when he was due to visit Singapore, Lin went online to search for new hotels. He found some here and there but then when he added the price filter, under US$150 (he is still a start-up, he says), one hotel caught his attention.
Big Hotel, just opened two weeks ago, was offering promotional rates of just over US$100 on Agoda. Lin read the description, looked at the location “Bencoolen Street”, thought “not bad for the price” and booked.
As it turned out, he was pleasantly surprised. Big is one of the many new hotels that have popped up in Singapore of late – entrepreneurs and property owners, having watched the tourism market grow in Singapore, have been enticed by the industry.
Big is an “urban chic” hotel, minimalist design. When you sit in the lobby, it’s like you’re sitting in a loft-type space, with glass walls looking up and out to the street level. The décor is industrial-like.
The room is a pretty good size, all white, and the bed is flushed up against a brick wall. There’s a tablet for complimentary use on the working table. It’s all you’d want from an urban hotel – perfect for small business owners.
I asked the executive working at the hotel why “Big”. She said something like “because everything is small and compact but we are big on luxury” and rattled off things hoteliers like to talk about – for example, thread count on bedsheets which I don’t get – but I get the gist of what she’s trying to say.
So Big is owned by Andy Ong – he keeps a bloghere. Ong is CEO of the ERC group of companies which include Entrepreneur’s Resource Centreand ERC Institute.
On Wiklpedia, he is described as “a self-made millionaire by the age of 26 making him one of the youngest such in Singapore. Ong oversees businesses in education,[2] training, print mediaand property investments which post an annual turnover of S$100 million.”
So the story goes that Ong travels a lot and when he travelled, he couldn’t find business hotels entrepreneurs like him wanted to stay in – and so he’s created the kind of hotel he’d personally stay in.
It’s good to welcome new blood into our industry.
Which brings me back to Lin, who also worked in the financial sector before he founded MyALN at the end of 2010. Thus far, the company has raised US$2.1 million but the first round was from families and friends, he admits.
Since its launch, MyALN has gone through some changes. Last year it grew 350% and achieved total sales of about RMB10 million.
It started off as a private sale – intending to blend the Jetsetter and Tablet models for China – but Lin says it is now more of a catalogue and it’s no longer members-only nor limited time sale. “We are also shifting more towards packages than room only – so if you book multiple nights, you get free nights – that kind of thing.”
Packages are of course harder to source than hotel rooms. “Right now, hotels either put it together for us or they give us a room and we package it,” says Lin.
The easy way would be to get packages from tour operators and wholesalers but that also has its challenges – margins and lack of differentiation, among some of them. Lin says it tries to limit exposure to these packages to 25% of content. For the domestic market, it makes sense to sell its own packages direct to consumers.
Currently, 50% of its business is domestic and 50% outbound travel and the company is putting more focus on the latter. Aside from the fact that this is a growing market, margins are much healthier. The domestic sector is seeing a price war and it’s best to stay out of that battle, says Lin. “Also, the domestic players can’t do international as well as we can.
“You have to sell 10 domestic packages for every one outbound package,” he adds. “The upper and middle class in China is growing very fast and they are sick of visiting domestic places, they now want to travel shorthaul.”
MyALN has also expanded its definition of luxury. “Remember, we’ve always been about affordable luxury and we have expanded the content. Initially we were very strict and wouldn’t consider say the Novotel but the reality is, for Chinese, that’s a luxury.”
According to Lin, 60% of his customers book directly online with a high repeat customer base. They come primarily from Shanghai and Beijing. It acquires customers through newsletters (130,000 names) and works with partners and private networks. Its customers are “relatively young, with young family and college degree”.
His customer base is 55% skewed towards men because initial build-up was based on top MBA programmes. Top destinations are Hong Kong, Phuket, Bali and Koh Samui.
The current austerity measures being implemented by the Chinese government have not impacted his market. “Most of the hotels we sell are four stars,” he says.
While the upscale market is still growing in China, Lin admits “it’s not as fast as we thought it would be. Domestic market is very competitive and we have to stay away from the mass market.”
The one lesson he’s learnt is “don’t compete on price. It’s the easiest thing for a competitor to copy. You have to differentiate by product.”
Another lesson is, “if you do a lot of EDMs, know that the database in crappy”.
