In this industry, the best laid plans usually involve growth – expanding into new markets and seeking out new efficiencies to keep the shareholders happy. They also involve solving problems – or challenges, as optimistic executives like to call what’s keeping them awake at night.
Hotelintel.co recently caught up with the ONYX Hospitality Group CEO, Peter Henley, who had plenty of challenges to talk about, as well as some exciting new projects which form part of the group’s current expansion strategy. The day also marked the release of the ONYX Corporate Update for 2015, which highlighted a number of the hospitality group’s recent successes.
With around 70% of revenues coming from the group’s Thai properties, a tough year might have been expected given the political turmoil in the country. However, gross operating profits have risen by 36% over the first three quarters in comparison with the same period last year. The goal for 2018 is to have tripled those operating profits via growth which will see the group’s current 59 properties expanded to reach 81, while staffing levels are expected to rise from 5,000 to 9,500.
While current progress has been satisfactory, Peter is quick to point out his main areas of concern. “From our perspective there are four or five big issues that we think have to be addressed. Top of the list is – and always will be – people, and the ability for the industry to attract, retain, train, develop and promote people in what is still a very people-intensive business. It’s a 24-7 business, and it requires shift work – hard work – which is not quite the way the modern generation want to work.”
“It’s about making the jobs and the work environment relevant to the current generation. We can’t just go on having organizational structures like we always used to have. We need to think again about how we run our businesses.”
Nor does the situation look likely to get any easier in the near future. The advent of AEC might be thought of as an opportunity to bring in staff from across the region, but the travel and tourism industry might be just as likely to find itself the victim of its own success. A majority of guests at ONYX properties arrive by air, but when the huge number of aircraft currently on order by Asian airlines is taken into consideration, it quickly becomes apparent that those airlines need to do a whole lot of hiring themselves, and from the very same talent pool.
From that perspective, it’s easy to forgive Peter’s lack of excitement as AEC approaches. “I don’t think AEC will have the impact everyone thought,” he said. “We’ve been taking staff from neighboring countries for some time, but as those countries develop, AEC may actually make things worse as people who are here already may well go back.”
The second issue facing Peter’s planners is that of data. “There is so much data – how do you manage that data and use it to improve the performance of your hotels and to communicate better with your staff, owners and partners. We have to use it to improve – the original plan to 2018, and now to 2023, identified the challenges we think might stop us growing, so there are lots of little groups in our organization trying to figure out the answers to those questions.”
There is also the question of China, and in particular the ever-increasing outbound market. “Are we ready for the hundreds of millions of Chinese who will be traveling? Not just putting Chinese food on the menu – that’s not the answer. Are we ready to deliver on their expectations? We mustn’t get obsessed with China to the exclusion of everything else, but they will be coming and they will be very important.”
Finally, we had a chance to put one last question to Peter – from the perspective of the foreign investor, why would ONYX be a good choice among the major Thai brands?
“*We compete on the basis that we’re small,” *he replied. “In Asia, hospitality is still a people business. In the States and Europe it’s more institutional, but we’re small, flexible, and nimble. So people know that if there’s an issue, they’ve got my card – they call me, I fix it, it’s done.”
“The Thai brands all offer something slightly different to the guest, and also to the equity investor. We provide different types of experiences, so it depends what kind of company he wants to deal with.”
And what kind of company is ONYX? “That’s obvious,” quips Peter. “We’re the best.”