This week, Travel Daily chats with John Flood, president & CEO of Archipelago International, about the Indonesian hotel group’s expansion plans…
Q) Archipelago International has been expanding rapidly in Indonesia over recent years; what is your current pipeline and have you set any targets in terms of portfolio size?
We are currently Indonesia’s largest operator of hotels, condotels, resorts, serviced suites and branded residences, spanning more than 15,000 rooms in 110 properties. We have another 100 hotels under various stages of construction in Indonesia alone. We hope to have 250 properties open within the next five years in Indonesia, while oversees we hope to have a further 250 within 10 years.
Q) You have also started expanding overseas to Malaysia and the Philippines. Are there any other countries on your radar?
In general we are currently looking for projects in Thailand, Singapore and Vietnam in Southeast Asia. Further afield we have set up joint ventures in Dubai to help expand across the Middle East, and a JV in India to help expansion in countries such as India, Pakistan, Sri Lanka and Mauritius.
Q) Which of your brands are currently seeing the strongest growth, and which seem to be capturing the attention of guests and developers?
In the mid- to upper-scale segment we’re seeing good growth in Kamuela, Alana, Aston and Harper brands while in the budget and economy sector we’re seeing excellent growths in the Fave, Neo and Quest brands. Sales are key to a successful management company and these brands seem to have really captured the imagination of our guests and clients.
Q) Indonesia is seeing a huge influx of new hotel development from major international brands. What do you believe Archipelago offers that can keep it ahead of the competition?
We’ve expanded rapidly in the last ten years driven by making hotels successful and being able to work with owners. We’ve worked hard over the years to improve and tailor our offering to forward thinking owners and developers – for example, we were the first Indonesian hotel operator to achieve ISO 9001 certification. We revolutionised Indonesian e-commerce and consistently deliver the highest returns on investment and gross operating profits in the industry.
We are a cohesive team that manages the largest marketing spend in the category, actively supporting industry-leading IT systems including advanced online sales, online reputation management tools, reporting and promotional resources. Our e-commerce department focuses on web design and search engine optimisation, lower commissions, preferred placement on leading OTAs, creative e-campaigns, no-cost frequent guest programs on Android and IOS, and seamless channel management and PMS integration. Accessibility to the most senior echelon of management, transparency and accountability has always been our credo.
For other brands to enter the market and set up like we have is quite difficult and takes a lot of investment. I think we will continue to do well in spite of the new competition and will do our very best to ensure we remain the number one operator in the country.
Q) And which areas of Indonesia do you think have the greatest opportunities for new hotel development in the future?
With a population of 250 million people and domestic tourism at 150-200 million trips per year along with the planned 20 million visitors to the country by 2020, we see many areas across the archipelago requiring branded properties and developments. Many cities such as Jogja, Solo and the island of Bali are already reaching saturation point but many other large and developing cities such as Palangkaraya or Banyuwangi show good potential, while bigger cities such as Jakarta, Surabaya and Medan still have great potential for further development.