“Give customers more of what they want, and less of what they don’t”. That’s the mantra of Bangkok-based Red Planet Hotels, which aims to redefine the value hotel experience in Asia. WIT speaks to Tim Hansing, Chief Executive Officer, Red Planet Hotels, about the technology-driven opportunities independent brands have to engage with a new generation of consumers today and his views on OTAs, distribution and direct bookings.
Hansing: Technology at the bedrock of making it simple and rewarding for guests.
Q: What’s the thinking behind the recent “Red Planet” brand launch, to convert your 24 properties to this one brand?
We identified a clear need for an affordable regional hotel product in the value sector where guests did not want to pay for hotel facilities they are unlikely to use. In the countries we operate in, there is a very clear demand for the product we have developed – which provides an efficient, clean comfortable stay with a bed we developed ourselves, a power shower and with access to great WiFi. We like to keep things simple and do them brilliantly, so we offer a well thought out basic product at affordable rates and it is working very well for us.
Q: You say, “our new brand is all about giving our customers more of what they want, and less of what they don’t.” What do they want more of and what don’t they want?
Our brand was not created by sitting in a creative laboratory and creating what we thought people wanted, we let guests tell us and built from there. We found clear patterns that guests in our sector of the market liked our product and they are quite happy we don’t have swimming pools, room service, fancy lobbies with expensive coffee shops etc. We found they wanted a clean, simple hotel product that provided a great bed and a great shower. It was also clear, that if we could keep operating costs down and pass these savings on to guests, it was a clear winner. In the value hotel sector, one of our biggest winners is free high-speed WiFi that functions brilliantly and upgrading WiFi speeds in all of our hotels was a key project before we launched the brand. Our guests also want access to platforms that make booking a room fast and simple, so we developed a website to allow this. They want a cool app that is not just a booking platform but a resource for the hotel and the city they are in, we developed that. They also want to be rewarded for their loyalty, so we developed our loyalty programme, Remembered.
Q: You say “almost all of our guests are between 20 to 30 years old, and this online generation is changing the dynamics of the hotel industry”. Are they mainly Asian guests? Do you find the Asian younger generation different from the West? More tech savvy? More social?
We do find that most of our guests in our hotels are from the region and they are from the so-called “millennial” generation. We do find them incredibly apt with technology and they mostly travel with two or more devices whether that be phone, tablet or laptop – some with all three – and that is why we don’t put a limit on the number of devices they can use and it is important that they remain connected at all times. This of course can also apply to older generations, but the aspect of remaining online with social media and friends we have found is an important one for most of our guests, if not all, in this age bracket.
Q: What dynamics have changed? How much of your business comes direct through your web and mobile? How much through OTAs?
Our new website and app are just a few months old and we are slowly but surely building up the level of reservations that brings us. In a very short time we have built this up to close to 20%, which is an excellent result. OTAs will continue to be an important partner for us and we will continue to put business through them, but like every hotel company we will be doing everything we can to drive direct bookings. We also have a traditional sales network dealing with our travel agent, wholesaler and corporate business. Our corporate business, particularly in Indonesia and the Philippines is quite strong and it is important we have personal interaction to manage these accounts.
Q: You say “we have invested heavily in our IT platform”. Can you elaborate? How much? What did you want this IT platform to deliver? How challenging was this endeavor?
Red Planet: “We want our guests to think they have made a smart decision by staying with us through a technologically-enhanced stay.”
Our IT platform is one of the most important pieces of the company we are putting together. I decline to put a figure on it, but I can tell you I would be most surprised if any other company in the value hotel sector has invested more. We continue to invest to develop a wider range of products we will roll out in the fourth quarter of the year. These are still undergoing extensive testing but at the end of the day, we want this platform and what it delivers to first and foremost enhance the guest experience from the minute they decide to go to our website or app to book to the time they leave. We want our guests to think they have made a smart decision by staying with us through a technologically-enhanced stay. It has been a great challenge to set the standard for this sector of the hotel industry and one we have all enjoyed and will continue to do. It’s fun creating new stuff for your business.
Q: One of the hardest things for an independent group of hotels is for customers to find you online. To this end, brands like Booking.com have launched Booking Suite, an end-to-end solution for independently-owned hotel companies. It’s free, gives you multi-languages, gives you traffic and a booking engine – for 10% commission. How attractive is this you think to independent hoteliers like yourself?
It is quite attractive and Agoda offer a similar product. We would not be doing ourselves justice by not evaluating these products and of course we can’t compete with the spend by the big OTAs on search. These products are definitely something independent hotel operators should look in to evaluate whether it serves their business.
Q: What is the best distribution solution for a hotel group such as yours?
A website and an app that incentivises users to book directly and also incentivises past guests to promote our brand to their family and friends and when their family and friends do book directly with us, the promoter receives cash rewards. This is the ideal solution and something we are working towards. Each guest or perhaps a website or a company or a blogger event that wants to promote our brand through their social posts or dedicated widgets can earn commissions by promoting direct bookings with us.
Q: You have launched a loyalty programme, Remembered, obviously aimed at getting customers to come direct to you. Do you think customer loyalty still exists? And if so, what are they loyal to?
TH: I definitely still think customer loyalty exists, especially when there are direct benefits gained from showing that loyalty. As I mentioned, we have undertaken quite a deal of research and this was definitely something that our guests mentioned time and again. Remembered has just been launched where all members receive direct room rate relief when they are a member and we will be growing our Remembered programme to include more benefits in the future. In terms of what guests are loyal to, we believe that no matter what end of the market you are in, for any product, our guests are loyal to the fact they can receive exclusive financial benefit through Remembered and even though our rates are very generous, most of the time, every little bit helps. Our constant growth in Remembered membership, I believe, reflects this.
Q: You say, you “are constantly listening to our customers and responding to feedback”. What tools do you use? What do you find most effective? Are you using location-based reviews tools, for example?
We have set up a custom-made guest review platform with Revinate which we analyse constantly. Online, short sharp reviews are a great way to collect this data. We made the effort to customise these surveys and make updates and improvements where necessary to questions so all of the data collected remains relevant. A link to undertake the survey is sent to each guest as they check out and it generally takes about 90 seconds to complete. The response rate since our brand launch has been pleasingly high. We are also close to launching our tablet-based surveys (with the same questions) as a part of the Revinate platform on our front desks so staff can also politely ask them to the survey on site while any check out formalities might be finalised.
Q: Your app activates an in-stay mode. It “feeds information about relevant local events and points of interest directly to guests’ hand-held devices. It also facilitates room-to-room and front desk calling, as well as a chat line, along with many other innovative features.” What kind of adoption/usage have you seen?
This is very new but usage rates have been quite encouraging. We just don’t want our app to be a tool to make a reservation, we want to give it meaning and keep its relevance while a guest is in house. The chat line to front desk has been useful when guests have a question and of course instead of buying the traditional guide books or carrying around clunky fold-up maps, the what’s on and what’s nearby features have been getting some great feedback. We are working with other companies to increase the amount of content, but we do ensure all content is relevant to the nearby locales and cities of the hotel the guest is in.
Q: What’s the vision for Red Planet Hotels? You have raised several rounds of capital from private investors and are planning a future public listing in the region. Can you say how much have been raised thus far, and what timeline is the IPO?
Our vision is to keep growing our popular hotel product in the value sector of the market and become the largest, most respected value hotel company in the region, while finding the right balance to provide value to everyone we make contact with, every day, from our guests to shareholders. We do plan to have a public listing in the future, but the timing and the value of that IPO is not something we wish to make public at the present time.
