Running Yangon’s largest hotel

The first thing one observes about Lotte Hotels & Resorts Yangon, Lotte Co’s newest hotel, is its sheer size: the property has 658 rooms. The second is the service. Step into the hotel and one is cheerfully greeted by employees eager to help with your umbrella and point you in the right direction. One wonders how Lotte has managed to hire, train and retain its talent.

One then notices the temperature inside the hotel, a welcome contrast to the humidity outside, and wonders how Lotte keeps the air-conditioning running consistently in a city notorious for its power cuts.

David Shim, general manager at South Korean hotel chain Lotte Hotel, told The Myanmar Times that the hotel relies on two in-house transformers, whereas most other hotels use only one. “We also have three large power generators,” he said. “There is shortage of power here so we must invest in generating our own power.”

He adds that it took six years to build the hotel, which is double the time it takes to build similar Lotte properties in other countries, and six months of hiring before he was able to amass his present workforce.“Our hotel is one of the largest in Myanmar. We have a total of 650 staff and almost 50 percent are Myanmar nationals who were working abroad,” he said.

“The hotel industry here is not as mature as other countries. We had to look overseas for locals with international experience to make up half the workforce. Then, we sent the managers to South Korea for training and also brought in trainers to train the rest of our team.”

Officially open in Yangon on September 1, the hotel is a joint venture between a group of Korean companies – including Daewoo International, KDB Daewoo Securities, POSCO E&C and Lotte Hotels & Resorts – witth an 85 percent stake and a group of Myanmar companies with a 15pc stake. Equipped with an indoor and outdoor pool, spa facilities and several restaurants, the hotel is estimated to have cost billions of US dollars to build. Globally, Lotte Hotels & Resorts runs a chain of 23 hotels.

Hotel glut

Yet, Lotte’s launch also comes amid rising concerns of an oversupply of hotel rooms in Yangon. It also comes on the back of several other launches in the city. CPG Hospitality Management opened Hotel G Yangon on September 7. Meanwhile, French group AccorHotels and Thailand-based LP Holding will open Pullman Yangon Centrepoint this year.

Then, there is the daunting challenge of ensuring a reliable and consistent supply chain to keep its restaurants well-stocked with the best ingredients.

But Shim reckons it is the right move. “Myanmar is the last jewel of Asia. This country can grow very rapidly and can be like Hong Kong, Vietnam and Thailand. We saw this potential six years ago. If the market grows, our hotel will also grow with it,” he said.

“For now, we have to pay attention to market trends. If there is, say, an average hotel occupancy rate in Yangon of 50pc at a room rate of K150,000, we will aim for 60pc occupancy and room rates of K160,000, for example. We cannot price ourselves out of the market yet we must aim to be ahead of our competition.”

Competitive edge

Lotte’s edge over its competition is its service. “In terms of service, we are the best in the world,” said Shim. Guests at Lotte enjoy unique services and the little things other hotels take for granted, such as choice of pillows. “Some may not like their pillows too soft.”

Lotte will also experiment with customised packages for its guests, including hotel stays and dining experiences or spa packages and outdoor and cultural activities to draw demand. It is targeting Asian guests who travel for business, but also wants to cater to local patrons. “We want to appeal to the locals as an alternative to an overseas vacation. Instead of traveling, they can spend a few nights with us during summer time,” Shim said.

That’s not all. Because it is supported by a consortium of companies involved in various businesses, Lotte also enjoys advantages in logistics, supply chain networks and repairs and maintenance. “The running of this hotel involves three companies who run many other businesses. If we are well-coordinated, we can solve all manner of problems from food supply and logistics to construction and development,” he said.

At the end of the day though, it all boils down to the strength of Lotte’s workforce.“The good thing about Myanmar is its people. Unlike other countries, the people here are ready to learn and follow instructions. They respond well to training. It is not easy to find a workforce with similar attitudes in a large hotel with 650 living and working together,” said Shim.

Lotte’s other advantage is its location. Now that downtown Yangon has become heavily congested, Shim reckons its location right next to Inya Lake on Pyay Road will appeal to guests who want to get away from the hustle and bustle of the city.

“Your Inya Lake is very beautiful. And naturally, people are attracted to beautiful places. We think this is the best spot in Myanmar,” he said.

Source : Myanmar Times