Summary: Through the tough economic times, terrorism fears and SARS, the serviced residence segment has fared much better that the rest in the hospitality industry. One of them., Singapore-based Fraser Serviced Residences, is loo… Tags: juicy couture handbags outlet travel companies gucci handbags outlet percent business we india replica bags Through the tough economic times, terrorism fears and SARS, the serviced residence segment has fared much better that the rest in the hospitality industry. One of them., Singapore-based Fraser Serviced Residences, is looking at opportunities being created in China and India as increasing foreign direct investment and business travellers to these Asian giants fuel demand for this niche hospitality segment.
China and India are featuring high on the hit list of multinational companies as the giants embrace more foreign investors.
Where expatriates once arrived in style on fat remuneration deals, the trend now is for companies to send their executives to these emerging markets on short-term project-based assignments.
“Business travel trend is now moving towards emerging markets where labour is cheaper and that’s where we see continued expatriate travel,’ said Fraser Services Apartments chief operating officer Choe Peng Sum.
“With the emergence of the term-project, companies just parachute a startup team and airlift them back after a few months because cost is an issue.
“The cycles used to be 10 years before but now they are shorter and cyclical. Companies used to sign up office rentals for years but now signups are even shorter than six months. They are looking for more flexible leases that carry no hefty downpayments and security deposits,” he said.
The Economist Intelligence Unit forecasts that China and India would lead the regional economy until 2007, keeping Asia the world’s fastest growing region.
“North Asia is the flavour of the times for a lot of countries because of their immense labour availability. Nowhere in the world can you get eight percent growth even in a difficult year so companies rushing to set up at least in key gateway cities of China like Shanghai, Beijing, Guangzhou, Shenzhen, Dalian and Tianjin,” he said.
According to the Federation of Hotel and Restaurant Association in India, business travel made up 55 percent of international travel. It also forecasts that business travel would increase steadily as foreign investors continue to flood this market.
For Fraser, that optimism is reflected in its mandate for expansion in the region.
Its Shenzhen property is opening in May followed by the one in Beijing. Shanghai, Guangzhou as well as the Indian cities of Mumbai, New Delhi, Bangalore and Hyderabad are in the pipeline.
“Its fortunate that last year we were not affected as much as hotels where occupancies went to as low as 10 percent. In contrast we used to have 90 percent occupancy but went down to 70 percent,” said Choe.
“The upswing came through quite strongly. Looking forward we’re very bullish with expectations of a strong pickup.
“What it demonstrated is that there’s a distinct market segment for us. The nature of Designer Handbags the business is such that for hotels – where guests come in for two-three days – anyone can stop their travel plans whenever there’s news of trouble.”
Choe said if there was a lesson hotels could learn, it was managing their market segmentation.
“Look at the Ritz-Carlton- they manage their market segment almost like a science.
“We’ve seen how they’ve pitched themselves to corporates. They triggered various segments very well versus a hotel which lumps customers on general basis,” he said.
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