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The Singapore-headquartered Ascott now operates 42 properties in 17 cities in China. Photos provided to China Daily
Hotel profile | Ascott
Long popular with expat managers, top amenities and security now appeal to more Chinese, Han Tianyang reports.
Ascott China, the world's leading owner and operator of serviced residences, plans to maintain rapid growth in China by adding eight to 10 new serviced apartments every year over the next three to five years, according to a senior executive.
"We will buy at least two properties and operate six to eight new properties under management contracts every year," says Tan Tze Shang, Ascott China's regional general manager for the north and central western regions.
The Singapore-headquartered company now operates 42 properties in 17 cities in China, with half owned by Ascott and the rest under management contracts.
Both business modes are important for the company, says Tan.
Managing properties for a third-party owner facilitates rapid expansion and is a more prudent way to explore investment opportunities in a new city, he notes.
And as the Chinese government strengthens regulation of the real estate market to avoid speculative bubbles, it is good for owners to have Ascott's professional teams manage their properties and increase the value of the properties, he says.
But Ascott will also look for "the best opportunities" to invest in new properties, Tan says, because real estate transactions are a major source of profit for Ascott.
It has now brought its entire product line to China - the flagship Ascott brand with luxurious furnishings for senior executives, Citadines with a target market of single business travelers and Somerset properties that have a warmer feel for family guests.
Unlike standard hotels, the company has various types of apartment units - from one to four bedrooms, most of them with kitchens - where clients often live for months or even years. They offer better security and housekeeping services than most apartment complexes.
"What we offer is a home away from home," Tan says, adding Ascott's international brand strength frequently makes it the first choice for foreign management professionals and their families in China.
"In first-tier cities such as Beijing, Shanghai and Guangzhou our customers are mostly foreigners who live for one to two years at a time," Tan says.
As more local customers begin to accept the concept of serviced residences, Ascott is now seeing increasing numbers of Chinese guests.
"In second-tier cities like Xi'an and Chengdu, about half of our customers are Chinese who usually stay for one to three months."
Responding to the trend, the company has changed the style in some apartments to cater to local tastes instead of copying the decor of apartments offered to Western residents.
The management team is also localized to help the company better understand customer requirements, says Tan, who has been in China since 2000. The Malaysian, who is a permanent resident of Singapore, speaks fluent Chinese.
"I feel just like a fish in water," he says. "As a representative for a Singaporean company, I can serve as a bridge here because I can better communicate with local staff."
The company's presence in the central western region is its smallest compared to the north, east and south of China, but it has great potential with more foreign investment coming, burgeoning tourism and business travel, Tan says.
When Ascott Raffles City Chengdu and Somerset Gaoxin Xi'an open next year, the company will have seven properties operating in the region with a total 1,437 units, but North China remains the biggest market for Ascott. A new Somerset will open in Beijing next year, bringing its number of serviced apartments in the capital alone to more than 1,200.
Ascott has about 8,000 units in China, close to 30 percent of its global total. The number is expected to reach 12,000 by 2015, Tan said.
North Asia including China, Japan and South Korea is the fastest growing region for the company, he says.
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(China Daily 11/17/2012 page13)