Raising the Standard
October 17, 2021
Amar Lalvani, CEO of Standard International, is optimistic about the future. So confident that The Standard is on track with its new openings. The Standard, Hua Hin, the brand’s first resort in Thailand, will open in December 2021, followed by The Standard, Bangkok Mahanakhon, its Asia flagship, in 2022. Amar also announced The Standard Ibiza, scheduled for 2022. Other projects in the pipeline are in Singapore, Melbourne, Lisbon, Dublin, Brussels and Las Vegas.
Speaking of the pandemic that has devasted the industry, Amar says, “This has been a time of unprecedented crisis for the hospitality industry. However, we are incredibly grateful that we continue to delight our guests, serve our communities and create new opportunities for our team members by building landmark hotels around the world.”
The question, though, is what makes him so optimistic? Amar is certainly not ignoring the elephant in the room, “This is worse than the Asian financial crisis, worse than 9/11 and the 2008 crisis. Despite that, The Standard has survived and remains optimistic. I was in New York City through the crisis; it was hard to see how we would come out of it. One of the most vibrant cities in the world was empty. It was scary, but with the progress on the vaccine, New York City is vibrant again. Yes, we need to be careful, but it has given optimism.”
“Though [international] travel is restricted, the US has a large domestic market, and we had quite a strong rebound so far: New York hotels have seen great momentum, we’re into 70-90 per cent occupancy on weekends. Our Miami hotel is close to the pre-pandemic level.”
The situation for Standard International outside the US is different. He explains, “London, without EU travel, is tough – the domestic market is not big. But there are signs that leisure travel has rebounded. People want to travel. When the restrictions are down, people do get on a plane. They do go [out] and enjoy themselves. In resort markets where restrictions are low, businesses have done better than 2019 levels.” What also gives him hope are investors and developers continuing to develop hotels, “Hotels is a long business, and they are putting their money where their mouth is. They are optimistic about the future.”
Doing it Differently
The Standard’s business model, he underlines, gives the brand its resilience, “We are the most powerful brand in the boutique hotel business. For most hotels, it’s about heads in beds. For some, it’s also about F&B, and for others, it’s good design. But we do so much more – we are a hub of culture in every market we’re in. Whether it’s art, fashion, music, and nightlife.” He speaks of his experience with The Standard Highline (New York) that quickly become a part of the fashion world. The hotel has for eleven years hosted the Met Gala after-party, a significant social event in the fashion world in New York.
He adds, “It’s the experiences we create, not just the big moments, but experiences day in and day out. Experiences that are constantly evolving, always new, always different.
Our plaza in New York transforms annually from a summer plaza into an actual skating rink. It becomes a hub for the children in the community. Chanel launched its”No.5 In the Snow” winter pop-up at the skating rink with an exceptional performance by K-pop group Monsta X. We have never stopped creating, and this is what we want to bring to Thailand. We’re not a big brand, but we’re a very powerful brand. We have won every top award - the best lobby, the best bar, the best restaurant, the best renovation, the best new hotel. My ambition for our flagship project in Bangkok is to do the same.”
Admittedly leisure travel will be the first to recover; the signs are already here. Adds Amar, “There’s no way to replicate dancing, live music, eating at a restaurant… there’s no such thing as a virtual massage. So a lot of sectors are going to have trouble. But going by the data, we see leisure travel will snap back.”
Managing the crisis
Business travel, though, has a mile to go, “Before the pandemic, our mix was about 25 per cent business, 75 per cent leisure. Today, it’s about 8 per cent business, 92 per cent leisure. We do not see the business travel come back yet. It will eventually, though short business trips are at risk – Zoom is very effective.” As for the MICE market, he is hopeful, “A virtual conference is just not the same. You go to a conference not just to listen to the people lecturing but to connect and network. In June and July of 2021, our events and meetings business were better than in 2019. The biggest convention market in the US, Las Vegas, was full this summer when the restrictions came down. The snapback is real.”
The big issue now is the severe labour shortage. Plenty of anecdotal evidence shows that hospitality staff summarily abandoned by sudden closures are reluctant to return. Amar is candid, “Hiring people in the hospitality industry has been challenging. Hoteliers need to do their best to respect employees, treat people well, give them the flexibility they need, excite them, empower them, but respect them. If we as an industry do that, they will ultimately come back and enjoy their work once again.”
Managing the crisis is critical; he says, “We managed to maintain our profitability and continue to grow, while many others did not. In fact, our food and beverage business, which is about 50 per cent of our revenue, exceeded our budgeted revenue for 2021. Of course, that was down versus 2019, but we maintained profitability through a rigorous cost discipline. Our F&B business tends to be not just for hotel guests but the entire local community. So even in a market like London, severely impacted as relates to the room occupancy, the F&B business is quite robust because Londoners come to our hotel, not just the guests. That’s the advantage we have over our competitors.”
Amar adds, “We do not have a traditional loyalty programme, but we were still able to grow with people coming directly to us, to our website, to our sales team. It is a tribute to the strength of the experiences that we create for our guests.”
It is the same business model that The Standard brings to their Bangkok outpost – creating a community-centric space. “Bangkok is one of the most visited cities in the world year in and year out, which is why we’re building our flagship here. As difficult as it may seem right now, it will be back.” The brand’s foray into the Thai market, though, is via The Standard Hua Hin, described as a “timeless destination for the Thai creative set and The Standard’s global network of loyal clientele.”
With the Thai government announcing opening the country to fully vaccinated travellers without quarantine from November 1, there is certainly hope in the air.