On behalf of several Asian and U.S. investors, I have spent the best part of April and May in Indonesia, examining the opportunity of developing several Azerai Hotels, the latest hospitality brand by the legendary and visionary hotelier, Adrian Zecha. It has been a hectic period with trips to Bali, Lombok, Jogjakarta, Jakarta and a side-trip to Singapore to meet the high priest of ultra-luxury and the founder and previous owner of Aman Resorts.
Founded in 1988, Aman Resorts’ first destination was the result of Zecha’s desire to build a holiday home in Phuket, Thailand. Aman now has 33 resorts in 21 countries and is arguably the world’s most exclusive hotel chain. Aman “junkies”- repeat guests that constitute an estimated 50 percent of the brand’s business are legendary for their devotion and loyalty to the Aman hotel chain, with many having ‘indulged’ in more than 20 Aman resorts.
The hotels do not advertise, have no loyalty program and rarely lower their rates, which average about $1,500 per night for a ‘basic’ room (villas can climb to $50,000 per night.) About 34% of Aman patrons originate from Europe, another 34% from Asia-Pacific, 28% from the Americas and 4% from the rest of the world.
Each resort has a small number of rooms (typically less than 55). The staff count is typically four staff to one guest. There are no reception desks, lobbies or bellboys. Guest accommodation is typically provided in individual private villas, pavilions or tents (in the case of Aman-i-Khás in India and Amanwana in Indonesia), often have private pools and outdoor lounging and dining areas.
Just over twelve months ago, Zecha launched the first Azerai hotel which aims to provide more affordable lodging for adventurers and “the younger crowd”.
The brand plans to compete in the 3-4 star category and offer affordable luxury combining simple elegance, refined design, discreet and attentive service, in places of unique beauty and cultural interest.
The first chapter in Azerai’s story was written in South East Asia, with the opening of Azerai Can Tho in Vietnam’s Mekong Delta. This unusual location provides an insight into Azerai’s philosophy of introducing guests to interesting destinations and providing elegant and comfortable accommodation at affordable prices. At a rate starting around US$250 a night, the rate is expected to creep up above US$300 in a year or two.
A typical Azerai will have no more than 80 rooms, ensuring greater and more personal service. While some Azerai properties, especially if they are a conversion of existing buildings of special merit, may exceed that number of keys, some are equally likely to have fewer keys. The size of the Azerai hotels proposed for Indonesia is expected to be in a similar range. Room sizes will be about 35 square meters and the design will be modest but with a distinctive style that is complemented by attention to personal service.
The cost per room is estimated between US$200,000 and US$300,000 depending on such factors as the country, the specific location and the cost of the site. Based on an average size of 60 keys per property, and an average cost of US$250,000 per room, the cost of a ‘typical’ Azerai in Indonesia is estimated to be about US$15 million.
The launch of Azerai fits in perfectly with the 2016 launch of the Indonesian Ministry of Tourism’s new program named “10 Priority Tourism Destinations (Indonesian: 10 Destinasi Wisata Prioritas)”. Known locally as the ‘Ten New Balis’, the ten destinations are Tanjung Kelayang beach, Tanjung Lesung beach, Kepulauan Seribu, Borobudur Temple, Mount Bromo, Lake Toba, Komodo National Park, Morotai Island, and Raja Ampat Islands