Taipei Times (TT): Shining Group (鄉林集團), the parent group of The Lalu (涵碧樓), has unveiled an aggressive overseas expansion plan for the brand. Could you give us more details?
Didier Belmonte: Group chairman Lai Cheng-i (賴正鎰) unveiled a plan to open 30 resorts under the Lalu brand worldwide in 10 years, with China to be the core area of expansion.
Following the establishment of the Lalu Hotel (涵碧樓大飯店) in Nantou County’s Sun Moon Lake (日月潭) area in 2002, the group opened its first overseas Lalu in the Chinese city of Qingdao in October last year, with branches in Nanjing and Chengdu expected to begin operations by the end of 2017.
Photo courtesy of Shining Group
In addition, the group is planning another Lalu resort in the Chinese city of Guilin, and is evaluating projects in other first-tier Chinese cities, such as Shanghai and Beijing, and resort destinations like Sanya.
TT: Are there any other countries in which the group might consider operating a hotel under the Lalu brand?
Belmonte: Indeed, the group would like to make The Lalu a global hotel and resorts brand based in Taiwan over the long term, with various destinations outside of the greater China region currently being evaluated, such as Bali, Indonesia; San Francisco and Turkey.
TT: What is The Lalu’s strength in comparison with other international luxury hotel and resort brands?
Belmonte: Scenery and culture are the foundation beneath each Lalu branch and the brand’s distinguishing feature.
Beginning with the Lalu Sun Moon Lake, the group selected a unique lake view to offer customers as the setting for its very first resort, followed by the ocean view at Golden Sands Beach for the Lalu Qingdao, which demonstrate the importance of distinctive scenery for a Lalu location.
This insistence on unique sites allows The Lalu to pursue higher room rates. For example, the Lalu Sun Moon Lake maintains the highest average room rate for a tourist hotel in Taiwan, while the Lalu Qingdao is expected to achieve the same feat in China.
TT: The group spent the brand’s first dozen years strengthening its operations at the Lalu Sun Moon Lake and planning expansion in the next 10 years. What direction will The Lalu take to become a more influential global brand in the long term?
Belmonte: Many global hotel and resort brands have focused more on management after cultivating brand awareness, a strategy The Lalu might consider adopting over the long term.
However, at the moment the group plans to maintain its strategy of operating a hotel or a resort while holding assets at the same time.
TT: The Lalu Sun Moon Lake the was brand’s first project in Taiwan. What role will it play as the group accelerates expansion into overseas markets?
Belmonte: We plan to maintain our pace to diversify ourselves from peers and attract more foreign tourists to raise the hotel’s profitability as a return on the group’s nearly NT$2 billion (US$64.3 million) total investment in the project.
At the moment, Taiwanese tourists account for about half of the hotel’s occupancy. We have been focusing our efforts on various markets, including Hong Kong, Japan and major Chinese cities, with the objective of enticing travelers from these markets to stay at The Lalu this year.
Many tourists from these areas are businesspeople from the US and Europe unable to frequently return home for vacations. We hope to attract these potential customers for short stays through direct flights landing in Taichung.
We hope these foreign customers will help the hotel reach a goal set for this year of having customers stay in the resort for more than one day, which is one way to maintain a steadier room occupancy rate.
TT: Other than accommodation, do you have plans for the Lalu Sun Moon Lake in the food and beverage sector this year?
Belmonte: Absolutely. This year we plan to attract more customers to hold their wedding cocktail parties and receptions at the Lalu to improve sales.
The group also plans to promote wedding packages to overseas customers, as more couples are interested in holding an overseas wedding ceremony, which might help to not only raise the hotel’s sales in the segment, but also to drive up occupancy.
Overall, we hope that food and beverage sales gradually increase to constitute about 50 percent of the resort’s total sales in the future.
TT: The Lalu Sun Moon Lake generated NT$215.23 million in sales in the first five months of this year, with average room occupancy of more than 80 percent and average room rates of more than NT$11,500. Do those results meet your goals?
Belmonte: We hope to maintain the room occupancy rate at more than 80 percent and further increase average room rates to NT$17,000 in the near-term by increasing service quality.
TT: Could you share your outlook for Taiwan’s hotel industry?
Belmonte: There are a total of 53 new tourist hotels in various stages of planning or construction in Taiwan, which could mean an influx of 20,000 rooms into the market. This means the hotel industry’s oversupply problem could continue or even worsen.
Under such severe competition, tourist hotels with strong branding might benefit. This is exactly why the group is accelerating its plans to build The Lalu into a world-renowned brand.
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