ONE ROOM TO TAKE ON THE WORLD: HOTEL GROUP EYES GLOBAL EXPANSION WITH ASSET-LIGT BUSINESS MODEL
23/12/2023
As it grows its portfolio from its Singapore headquarters, Hotel101 Global aims to keep its signature look “consistent and dependable” so guests will keep returning.
As travel and tourism rebound strongly from the Covid-19 pandemic, Filipino-owned hotel chain Hotel101 is setting up its global headquarters in Singapore as it moves forward with plans to expand worldwide.
The property subsidiary of Philippine real estate company DoubleDragon Corporation, Hotel101 Global is the first ever Filipino homegrown hotel chain to expand in other countries outside the Philippines.
“The opportunity that we see globally in the hospitality space is that of standardisation because we believe it brings unbeatable efficiency, especially for the mid-end segment. Take for example the budget airline industry – essentially all budget airlines sell one product across the whole industry and that product is the economy seat,” says Hotel101 Global chief executive Hannah Yulo-Luccini.
“We want our hotel room to be just like that one iconic hamburger in a global fast-food chain,” she notes. “It is the same no matter where you go – yes, the price changes as costs vary from country to country, but the burger doesn’t change.”
Ms Yulo-Luccini, 40, answers some questions about Hotel101 Global’s asset-light business model and its expansion strategy.
Q: What is Hotel101 Global’s business concept about?
A: Hotel101 was born out of a desire from our founders, Mr Tony Tan Caktiong and Mr Edgar “Injap” Sia II, to create a global platform whereby buyers can diversify their real estate portfolio by investing in hotel units.
The number 101 is often used for a simplified version of a topic or subject that is easy to understand, and hence our tagline is “Investing Made Simple”. Our hope is to make investing in hotels simple and hassle-free.
The Hotel101 Global concept is a hybrid condotel model where all the units or “HappyRooms” – as they are called – are identical, thus allowing all unit owners enrolled in the management agreement an equitable share in the revenue.
A condotel is a condominium building that is managed as a hotel. Units within the hotel are individually owned. Hotel101 Global distributes to enrolled unit owners a share in the gross room revenue of the hotel every 16th day of the following month. The remaining revenues go to Hotel101 Global which bears all hotel operating expenses, repairs and maintenance, and future renovations required.
Q: How is Hotel101 Global’s condotel business model different from timeshare and condominium rental?
A: Hotel101 Global’s unique and pioneering hybrid condotel business model comes with having only one type of room unit across its global ecosystem, making it efficient to build and operate.
We have set a goal for ourselves to create that one SKU or stock keeping unit, that one standard hotel product globally in all of our properties. That product is what we call our “HappyRoom”. It is functionally designed and purposely built to deliver everything you need in a hotel room. We want a product that is consistent and dependable across the entire portfolio, that our customers love and keep coming back to.
The highly portable Hotel101 Global concept also allows it to expand and create a uniform worldwide inventory through direct development, joint venture and licensing.
We have three key goals for the global impact of the Hotel101 Global network. The first is having one uniform product, similar to the economy seats in budget airlines. Second, each of our hotels is five times bigger than the typical three-star hotel – so a 500-room three-star category hotel is unique. Lastly, we focus on blitzscaling through fragmented individual ownership of the hotel rooms.
Our asset-light approach involves selling units to individual owners, allowing us to generate revenue twice: first through unit sales and then through day-to-day operations. This strategy enables us to recycle capital and swiftly invest in expanding Hotel101 globally, unlike traditional hotel developments that take years to recoup invested capital.
The concept patent application of Hotel101 Global’s pioneering condotel concept has already been filed, and the Hotel101 Global trademark and country-specific domains have been secured in various countries globally.
Q: Who is the parent company of Hotel101 Global?
A: The parent company was founded in 2009 and is called DoubleDragon because the two Filipino founders of the company were both born in the Year of the Dragon.
One dragon is Mr Tony Tan Caktiong, who is the founder of the Jollibee Group which operates over 6,000 food and beverage stores worldwide including Jollibee, Chowking, Mang Inasal, Yonghe King (China), Hong Zhuang Yuan (China), Highlands Coffee (Vietnam), Smashburger (United States), Milksha (Taiwan), Tim Ho Wan and The Coffee Bean and Tea Leaf globally. In addition, the Jollibee Group will soon be bringing Singapore’s Tiong Bahru Bakery and Common Man Coffee Roasters to the Philippines.
The other dragon is Mr Edgar “Injap” Jaruda Sia II who is the founder of Mang Inasal, the fastest-growing fast-food chain in the Philippines, and MerryMart, a national grocery chain in the Philippines.
DoubleDragon was publicly listed on the Philippine Stock Exchange in 2014, currently with approximately US$3 billion in total assets. Today it manages a portfolio of almost 1.3 million sq m of completed buildings across four segments – office, retail, warehouse and hotel.
The first Hotel101 property was opened in Manila in 2015 with 518 rooms. There are eleven Hotel101 properties in the Philippines and two international properties in Japan and Spain. The company recently secured a site for Hotel101 Global in Los Angeles, California, the third international location after Niseko and Madrid.
Q: Why is Singapore picked to be the headquarters of Hotel101 Global? Are there plans to build a hotel property in Singapore?
A: We have located our headquarters in Singapore and rebranded ourselves Hotel101 Global because we believe this dynamic city attracts the global talent that we need for our global expansion plans. It also attracts potential investors and joint venture partners worldwide, which is why we have chosen to base our global sales hub and corporate office in Singapore.
To be truly a global brand and transcend beyond the Philippines, we really need to be in an international location. Singapore is really the right place to be, especially as we set our eyes on a Nasdaq listing very soon.
Q: What are the plans for Hotel101 Global going forward?
A: Hotel101 Global is engaged with select special purpose acquisition companies (SPAC) targets and intends to sign a business combination agreement very soon. The SPAC route is one of Hotel101 Global’s options to accelerate the expansion of Hotel101 globally, as well as the timetable of its previously announced plans to IPO Hotel101 Global on the US Nasdaq stock market.
Hotel101 aims to become one of the top five largest hotel brands globally and to expand its room base to 500,000 rooms in 101 international locations by 2040. The near-term plan is to be located in 25 countries in regions including the Middle East and China by 2026.
