Interview: Staywell Hospitality chief Simon Wan

Simon Wan is planning to expand StayWell Hospitality to 100 properties worldwide. Many of those are likely to be based in the Middle East.
By Neil Halligan
Fri 29 Aug 2014 10:13 AM

The overriding impression of Simon Wan, after spending an hour in his company, is that he’s passionate about what he does. By his own admission, he doesn’t know anything else but the hotel industry, and having twice built up successful hotel groups — only to sell them on at a massive profit — he’s now embarking on building a third group, StayWell Hospitality.

Founded in 2006 with five properties, Wan and his two partners — Richard Doyle (one of the original founders) and Bal Sohal (key shareholder) – have built the group to 34 hotels that generate an annual turnover of $54m (AUD $58m).

Not bad for someone who got into the industry by accident. He explains that his cousin managed to get him a job working room service for a hotel in his home city of Hong Kong, where he managed to upscale his lifestyle significantly through the money he earned on tips.

Soon he ditched his bachelor of commerce studies and started a two-year course at the Cornell School of Hotel Administration, he enjoyed working in the hotel industry that much.

It led to a host of jobs all over the world, sharply working his way up the management ladder.

“My last paid job was with Accor; I worked as chief executive for North Asia, based in Beijing,” says Wan.

Forced to return to Australia with his wife, who was expecting their first child, he couldn’t find a suitable senior position in the hotel industry, and as a result he decided to start his own hotel group in 1997.

“I bought the Park Plaza and Park Inn franchise for Asia. They had about three hotels. Then Carlson obviously decided to expand into different brands. They had Radisson and bought Regent, and they saw that Park Inn Park Plaza is a good brand,” recalls Wan, who sold out of the business in 2000 for an unnamed amount.

Wan then bought the Pacific International Hotel Group, with 19 properties and soon added 51 percent of the Dutch hotel brand, Golden Tulip, which had 390 hotels in its group.

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“I then floated the company and sold it to a fund — a very big PE fund in 2006,” says Wan.

Out of a job, and aged 50, he took to the golf course on a nine-week holiday for what he thought was the start of his retirement.

But it wasn’t long before he started looking for new opportunities, and soon started StayWell Hospitality Group.

Starting with three properties in Tasmania under the mid-scale Leisure Inn brand, Wan invested in 50 percent of the company. The upscale Park Regis brand was added soon afterwards — its name was based on a building of the same name in Sydney where the hotel was located.

Eight years later, the group has grown to a portfolio of 34 properties, with an estimated value of $1bn across seven countries in Asia.

The key word during his recent three-day visit to Dubai, where he met with a host of current and potential partners, was expansion.

The StayWell strategy is to grow to a portfolio of 100 properties by 2017 across Australia, South East Asia, India, China, Europe, Africa and the Middle East.

“We selected Dubai for our conference for strategic reasons. If you open up a map, it just happens to be in the middle of everywhere.

“It’s very good for a global conference, because we have partners coming from all around the world,” says Wan.

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But Dubai, and the Middle East in general, is an area StayWell has identified as a potentially huge one for growth.

“We’ve only got one [hotel] — but we are in the process of negotiating with partner of an existing hotel group, which has got seven hotels in this region.

“They have two in Abu Dhabi, they have [hotels in] Turkey, Lebanon, Iraq, and Saudi Arabia.

“In addition to forming a partnership with them, we have also recently set up a development division to go and grow the business,” says Wan.

He says the group is also building two hotels in Dubai, in Business Bay and the Marina area, which it hopes will be open in the next 18 months.

“In addition to forming a partnership with them, we have also recently set up a development division to go and grow the business,” says Wan.

He said the group’s strategy is a combination of partnering with existing hotel groups and engaging in new-builds.

“In the Middle East, our expansion strategy for StayWell Hospitality Group would be to grow through a combination of organic growth, like one by one and to grow by partnership.

“In Dubai we are finalising two new hotels — one in Business Bay, one in the Marina area. “Altogether, there will be about 620 rooms, plus what we’ve got here, [the Park Regis Kris Krin] about 400 rooms, so we could have 1,000 rooms in Dubai hopefully over the next 18 months.

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“Plus, with the platform that we’re forming a partner with, we hope that in the Middle East we’re going to have about 15 in the next two years, with the UAE having about five or six.”

Wan also unveiled plans to grow its business in the African market through its Mantis Collection Hotels joint venture. It’s a partnership that might also yield further growth in the Middle East region.

“We have signed a deal for a tent camp in the mountains. We have plans for some other small stuff, but we will do it in conjunction with StayWell, and using that resource here,” says Adrian Gardiner, the chairman and founder of Mantis Hotel Group, which will open the new accommodation venture in Ras Al Khaimah.

“It’s a brand new build; we’re going to do it as a tented resort. There’s an existing property which they want converted,” says Gardiner, adding that it will be aimed at the upmarket segment.

In the drive to get to the target number of 100 properties, the company will look to double nearly its 16 hotels in Australia and New Zealand, as well as adding another 20 properties in China through a joint venture there with “a very powerful state-owned enterprise”.

India is also a country where Wan sees huge potential for growth, with plans for 16 more properties, in addition to its current two.

Wan also sees opportunity in Europe, with negotiations for two properties currently taking place and plans to add another four.

“In Indonesia, we’re in the final stages of negotiating there. We have already got one opened in Bali and we’re opening a second one soon,” he says.

“We’re forming a joint venture partnership with a local property developer who already has four hotels being managed by someone else. Those hotels will be rebranded to our brand. We think that Indonesia will bring us another ten.”

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The 100-hotel target could well be smashed, given the interest that the Middle East has generated for him and the company, with new opportunities presenting themselves all the time.

“I’m giving you the numbers that are realistically achievable because if we’re successful in concluding this deal that will give us 10 hotels in this region, getting another five is not exactly hard over a three- to four-year period,” Wan points out.

One of those new opportunities might just come in Saudi Arabia, where he is in discussions about bringing the StayWell brands there.

“We just had a meeting with a Saudi Arabia partner this morning. He came to the conference. I haven’t been back to Saudi Arabia for four or five years, but he said to me that the mid-scale, economy sector of that market in Saudi Arabia is absolutely booming.

“The economy brand in Saudi Arabia, with the very low costs, he said there’s a strong demand for it. They do have a lot of budget-conscious people happy to take that,” says Wan.

The drive towards budget consciousness is also evident in Dubai, says Wan, who agrees that Dubai needs more of the three and four-star hotels.

“The promotional image of Dubai, every time you see it on the plane, is this Burj Khalifa and a luxurious perception of Dubai.  I think it needs to change.

“I think Dubai now can accommodate the next level of travellers – the budget-conscious traveller. You’ve got a lot of budget airlines coming here. The young people – they don’t want to stay at Ritz-Carlton or the Burj.”

With an estimated 600 to 700 hotels having been under his stewardship as CEO during his career, Wan is very clear about what makes a good hotel.

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“A good hotel, to me, means that our customers feel comfortable, safe and personal.

“It doesn’t, absolutely necessarily have to be luxury. I think luxury is a very subjective word. It means different things to different people.

“Some hotels you feel less comfortable than others. You might be in a hotel where you feel less comfortable that might have a higher standard; it’s cold, you don’t get the warmth and the people don’t do the right thing for you,” he says.

He says staff in his hotels are told to put the customers first.

“There are some ground rules that I have set and I believe customers are number one. 

“It might be a simple thing – if you have a button off your shirt and housekeeping sew it on automatically for you. You appreciate that. These sort of things that I believe [are essential],” says Wan.

Gardiner, who currently has 81 properties around the world, adds that the staff are very important to a hotel’s success.

“A good hotel for me is represented by the people who run it. We know we’ve made a success when my general manager thinks he owns the building and gives me a hard time. Then I know we have won,” he said.

Wan says they have a strict rule about contacting a hotel’s general manager.

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“We have a rule in our head office that none of our executives can ring the general manager before 10am, because we want them to be at the front lobby, greeting customers.

“And they must reply to TripAdvisor [a hotel review website] on any guest complaint within 24 hours personally. That’s an instruction,” he says.

The 100-hotel target is 2017, at which stage Wan says they might reconsider their options.

“Maybe [we will] do an IPO again, or maybe sell to a fund?

“I am having fun. The reason why Adrian and I get along so well is that we both passionately love this business.

I don’t know anything else. I only work in hotels.

“We are both having fun; this is our business and our money. We have both been self-employed for a long time.

We are passionately involved in the business.”

Even if he did sell up his share in StayWell, he’d hardly sit still long enough not be involved in hotels somewhere. He’s just that passionate.

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