Ascott looks to develop revenue streams beyond rooms, grow luxury offering

THE Ascott Limited is looking to diversify its revenue streams ahead of its 40th anniversary next year.

It began its journey along Scotts Road in 1984. The Ascott Singapore was the first international-class serviced residence in the Asia-Pacific. In the following years, the company focused largely on revenue per available room, applying its expertise in managed serviced residences mainly for long-stay guests. 

Speaking to The Business Times in an exclusive interview, Kevin Goh, chief executive of The Ascott Limited, said: “With our hotel-in-residence flex-hybrid model, we are able to diversify our revenue streams by offering a wider range of hotel services and amenities, and cater to different customer segments, varied by length of stay.

“We have hotels in markets such as Indonesia that offer facilities such as function rooms for corporate events, weddings and food and beverage operations, but we are looking at expanding our revenue streams in those areas.”

New offerings include a hidden speakeasy named Chandu, which visitors can enter only if they know a special password. This hideaway bar in Robertson Quay is tucked away in The Robertson House, a hotel managed by The Ascott Limited.

Bespoke cocktails such as Mata Hari and Trader’s Punch are on the menu within the intimate space, which exudes old-world charm. 

The Robertson House, which officially opened on Oct 14, has hosted a tea-blending workshop and plans to organise cocktail-making workshops, as well as start a book club in its lounge, The 1823 Reading Room, home to rare and vintage books

Today, The Ascott Limited has a presence in over 220 cities in more than 40 countries; its stable of brands include Ascott, Citadines, lyf, Somerset and The Crest Collection,

One brand where growth has been rapid in recent years is the luxurious The Crest Collection. Since its launch in 2016, the number of units under this brand has grown about 40 per cent year on year.

Properties under The Crest Collection focus on luxury and heritage. There are a dozen such properties across cities including Singapore, Paris and Penang, as well as those soon to open in Tokyo, Bucharest and Hanoi.

Goh said: “People pay for experiences. If they want to just pay for a room, there are a lot of opportunities and choices. And the way to differentiate ourselves is to have a product that can tell a story, that can attract them here.”

For instance, The Robertson House, with its 336 rooms and suites, is colonial-themed. A bespoke scent inspired by the spices and teas once traded along Robertson Quay wafts through the hotel. Entrepot, the hotel’s all-day dining restaurant and bar, offers Anglo-Asian cuisine. It is decked out in black and white, reminiscent of the bungalows of the era. (*see amendment note)

Goh said: “We are broadening our customer and product offerings. Sometimes, as a customer, you want to have a little bit more fun, you go to lyf. Sometimes you want to indulge yourself, you may go to a more premium brand, such as The Crest Collection. 

“It’s about broadening our spectrum of offerings to you as a customer, so, depending on your preferences, mood, price point, we have something for you.”

The Robertson House, formerly the Riverside Hotel Robertson Quay before the rebranding, is owned by The Ascott Limited’s sponsored lodging trust, CapitaLand Ascott Trust. However, over 80 per cent of Ascott’s units are under third-party management and franchise contracts, up from 43 per cent 10 years ago.

This asset-light strategy has enabled The Ascott Limited to double in units every five years, growing from about 20,000 units in 2008 to over 162,000 units as at end-September.

Goh said: “Ascott’s asset-light strategy allows us to scale swiftly with lower incremental cost. As we grow our portfolio by securing more management and franchise contracts and opening our properties across various brands, Ascott’s fee income will increase and contribute to the fee income for CapitaLand Investment.”

The lodging operator aims to double fee revenue to more than S$500 million in 2028, with fee revenue growth driven by new property openings and new signings.

In the first half of 2023, Ascott’s fee income rose 35 per cent to S$159 million from S$118 million. Ascott recorded S$258 million in fee income for the whole of 2022.

Goh said: “Having a wider range of revenue streams by expanding our product offerings across our brands will enhance our fee revenue.”

The third-party owners that The Ascott Limited works with appreciate having a range of brands to choose from as well, said Goh.

“There are owners who focus more on capital productivity, who tend to pick our lyf or Citadines properties. Then there are owners who want wealth preservation and to have a very nice hotel for their grandchildren, who may be willing to invest more to build a very good property for the next generation.”

Ascott has invested the fees it has earned over the years into building its brands, its loyalty programme and developing technology to enhance its distribution systems and operational efficiency.

Goh said: “Data collected based on a customer’s past visits at The Ascott Limited’s properties help the company to understand a guest’s preferences, predict when and how to push out promotional deals, when to delight the guest with a birthday offer, or to gauge the hotel rates to offer during certain periods to optimise revenue for property owners.”

In August, the lodging operator was one of the first in the hospitality industry to launch a generative artificial intelligence chatbot on the DiscoverASR website, where guests can book its properties.

Called Cubby, the chatbot helps guests with itinerary planning, choosing a property to stay at, and understanding the health and safety information and visa requirements for the countries they visit.

Goh said: “That is the first phase – we hope to develop it further and new capabilities we may introduce could be in making room reservations, requesting items to be prepared before your stay. These are all the things that are possible today with generative artificial intelligence.”

The Ascott Limited is also pushing its geographical frontiers and intends to deepen its presence in existing locations, even as it looks for new markets.

Goh said: “We pride ourselves on being a global company born in Singapore. There are still a lot of opportunities out there – we haven’t really gone very deep in places like India, which has a huge market. We are also looking out for more opportunities in regions such as Africa, where we have a presence, as well as South America.”

Even as it forges ahead, the lodging operator believes providing the feeling of home for its guests will remain a core part of its DNA.

“We have built friendships with our long-stay guests and nurtured a deep sense of trust and familiarity,” said Goh. “As we grow Ascott globally, this DNA will continue to define the way we create differentiated experiences for our guests across all our product classes and brands.”

*Amendment note: An earlier version of the story stated that The Robertson House has 366 rooms and suites. It has 336 rooms and suites.