Tip of the Iceberg – White Label Hotel Groups Rocking the Boat Across Asia

There is one truism about the connection between trends and the global pandemic that could not be more accurate ‘COVID-19 for the most part is an accelerator towards a future that was already coming, suddenly pushed into the path of a speeding train.’

Today’s stark reality is more and more slimmed-down offices of international hotel management groups across Asia or a mounting array of familiar faces on LinkedIn with the caption #OpenToWork. Now I’m humming along to ‘where have all the people gone?’ The answer is, that they are still out there but cannot be found in all those usual places.

I’ve talked a lot over the past few years about white label hotel operators, and how the east is likely to mimic the west in the layering two layers of solutions for owners – franchise and operators, but little more than two years into the pandemic and we are just seeing the iceberg tip.

In a time when the development pipeline across the region has been ravaged similar to a pack of wild dogs gnawing on a single bone, conversions have taken center stage. Hotel owners are looking for desperate measures in even more desperate times. For overstretched, under-resourced hotel brands who have to maintain pipelines to prop up share prices, trusted white label operators are increasingly being seen as a strong positive in a world where ‘growth’ is the karmic mantra.

Lately, we have seen the emergence of white label operators with strong brand backgrounds, often taking a more institutional approach to developing an organization. Three that come to mind are Vista Hospitality bolstered by the Pro-invest Group with familiar names Jan Smits and Tony Ryan. You also have La Vie Hotels & Resorts with Chris Batterham and Craig Bond amongst a larger cast of the former bigger brand crew or Kew Green Hotels who have formed strong development partner alliances.

To say the traditional lines in Asia between Asian hotel owners and operators are becoming blurred is an understatement. Covid-19 has thrust them into a high-speed blender and there is no telling what strange brew will emerge. But for hotels in the region, one key differentiator is the family office element or importance on relationships versus s a more institutionalized approach in the west is underpinned by the fact that relationships matter.

One has to wonder, as the vast brand great reorganization has emptied the ranks of so many senior executives who were key to those same relationships, where will owner loyalty sit in the future, with the depleted brand or the white-label operator?

Another consequence of this fragmented approach to hotel operations is going to be confusion by owners, who for lack of a better term, wonder who’s your daddy? With hotel chains, the single solution of a one-stop-shop was easy to understand and articulate but now, the moving parts have created an entirely new perspective for the industry.

All of these moving parts ultimately end up with hotel owners and let’s be frank this has to be one of the worst times to own a hotel in a volatile yo-yo economy, debt drought, and day-to-day venture into unknown territory. Asia’s owners, have a steep learning curve on white-label options and also the fast-growing franchise scene. Making sense of these economic models side by side without compelling historical data remains a visit to the edge of a precipice and deciding whether to look, leap or turn around and run away.

Time will tell of course how white labels will fare. For global operators in Asia who have been able to bask in the sun of management agreements for the last few decades, this new journey is a decidedly different and one that is far more challenging in the days ahead. This is, after all, just the tip of the iceberg.