Ready for the increase

Having worked in the hotel and F&B industry in over 13 countries, Fabrice Collot took on the role of General Manager for Banyan Tree Macau in June of 2016. After one year in the city Mr. Collot tells Business Daily about his entrepreneurial experiences, his view on the changing needs of Chinese clients and how to maintain the high standard Banyan Tree has developed in the MSAR

How did you become involved in the hospitality industry?
I was a chef before, working for the French government for 10 years and travelling extensively. When my daughter was a child I decided to slow down and settled in Cincinnati in the United States where I opened a pastry shop and then a restaurant.

What did you gain from your experience as an entrepreneur?
It was very enlightening for me to be my own boss. I learned that you have to rely on yourself, if you want something done you have to do it yourself. Of course you have employees, but the last word is still yours. Whatever you decide to do, if it’s right or wrong, you need to bear the consequences. When you see a business 10 years down the road and it’s successful, people tend to forget that the road was very difficult. You have to make decisions that are sometimes very painful with the people that you’re working with, and for your family too, since you’re working countless hours.
I made the decision to leave America for personal reasons. I had a great time there, but it’s a bit like China in the sense that you’re a bit isolated; if you want to go to other countries you’ll have to be four to five hours on a plane. In Europe you’re not used to that, everything is very close. I was missing that, since my first love was travelling and not anything else, so I resumed my travels and decided to go to Russia, which at the time was a good place to be, and to reinvent myself and re-launch my career.

How different was your experience in Mainland China compared to the other countries where you had worked?
China is a very different world. Everything is different. The first challenge was the language, since not that many people in China speak English, so being understood for me was the main challenge. Even if you have someone to translate, you can’t really assess if the translator is really saying what you want, since the facial expressions and the gestures are also very different. It’s very surprising in the beginning – you make a one-word sentence that is translated for 15 minutes. It makes you think: ‘did I really say that much’?

How would you describe the main traits of the typical Chinese consumer?
I think it’s evolving extremely fast. I would compare them to how Japan was 25 years ago in terms of tourism, in terms of this mass of tourists that are moving all together on buses that are chartered from one point to another. There’re very few independent tourists, but what I’m describing was three years ago. Now the changes that would have occurred in 15 years can occur in just three years, the pace is much faster. You can now see many Chinese youngsters going to many strange locations that the older generations maybe didn’t dare to go to. You’ll see travellers alone or in couples, I wouldn’t exactly say backpackers but more independent travellers, now more than ever and in a very short time. It’s quite an accomplishment. The expectations younger and older generations have for ideal hotel service are very different, because when they go back home they’ll say ‘okay this is a bad hotel and this is a good hotel’, which probably wasn’t the case five years ago.

Do you believe the average Chinese traveller is becoming more sophisticated?
Well, more sophisticated and also more aware of their surroundings. I think before they were travelling mainly in China or in Asian countries. Now you see Chinese travellers all around the world and they know what is a good and a bad hotel. They know what’s good food and what their personal taste is. When hotel chains were opening in China 15 years ago, they were doing it a bit cowboy style: you take it or leave it, which is an approach that doesn’t exist anymore.

So what brought you to Macau?
I’ve been in Macau for almost a year. I was working in Mainland China, for a Chinese company named Wanda. I worked for Banyan Tree five or six years ago and always kept it in my heart. We split amicably and when I heard about this position, in one of the flagships of the company, I proposed myself to come back, and since they liked my previous work they rehired me.

You arrived in a period where the Macau gaming economy was starting to rebound. In what ways have you seen change?
I’ve definitely seen a change, the pace is picking up. We were a bit afraid of the opening of two large units [Wynn Palace and The Parisian] and with the new MGM coming, and we didn’t know what to expect to be honest. Wynn has a very high quality product as well, so we were expecting competition to be fierce. However to date I’m going to say that we didn’t really decline. On the contrary, our occupation rate is higher than in last year. So far so good, and I think the excess inventory has been absorbed by this extra flux of people.

So you haven’t seen any signs of cannibalisation of the market?
We are a 260-room hotel, not a 1,000 or 3,000 property, so we don’t see it as much as other hotels. We’re also in the top tier of hotels, so the market is even smaller. This month we’re running at a 98.8 per cent occupancy rate and our budget is at 97 per cent so we’re almost at 100 per cent every day. Last year was good, this year will be even better.

How does Banyan Tree Macau distinguish itself from other hotels?
It’s a very different product. Your rate also determines the kind of clientele you’re going to have, just like buying a car. If you buy a Porsche it won’t be the same as a Volkswagen. Our clientele is the top tier and are people that can afford to be here. Our product is also very different since our smallest room is 100 square meters. Banyan Tree is also all about spa, so it’s a different kind of clientele we’re catering to. Of course we are imbedded in Galaxy, so the lion share of the clients are coming from the casino.

Do you think the typical clientele that comes to Macau has changed in the last year?
We see a more diverse crowd now than when I started. The people are not coming to Macau only for gaming, which will be one of the components of what they want to experience, but not the only component. We get a lot of foodies coming from Hong Kong as the Macau food scene is becoming more high-end. You have three- or two-star Michelin rated restaurants, you have small local restaurants, Portuguese restaurants. It’s extremely diverse and people are coming for the cultural heritage aspect, mixing it with a bit of gaming. Of course you’ll have the hard-core gamers and gamblers that will come and stay only in the casino, but I think the proportions are shifting with more and more people coming for more than gaming.
In terms of nationality, lately we’ve seen an increase in visitors from Thailand and Taiwan, but 95 per cent and more are coming from Mainland China.

What portion of the hotel’s services are dedicated to event organizing?
For us it’s very important, we have a large ballroom and a few function rooms so we need to drive revenues through that. Of course we’re catering to MICE (meetings, incentives, conferences and exhibitions) as much as we can, since we have a high level of occupancy so there’s not a lot of room left. Local events are the key for us. Weddings and other events we try to generate ourselves, such as the White Party in partnership with Moet & Chandon. They are our main supplier of champagne to the hotel and we are one of the only ones in Macau that carry the Ice Imperial bottles, which are made especially for outdoor venues.
We’re going to move in the direction of creating our own events. In size terms, we’re not MGM or The Venetian so we don’t have the capacity to host these kinds of events, but in our scale we’ll try to have more and more events that interest the local population.
We want to bring new things to revamp and give a little bit more dynamic to our F&B offering.

How important is the MICE sector for Banyan Tree?
Our inventory is limited so we also partner with Hotel Okura, which has more room than us. Either we split the group: management stays with us with lower management staying with Okura. We are in the same building, with the same lift for the banquet area, so it’s very convenient and more economical for the companies. We excel in smaller groups.

How would you say the VIP market is faring in Macau at the moment?
Honestly for us it is getting better. We see high rollers are coming back. Our clientele on the weekends is willing to pay more to stay with us, so I think we’re on the right side. Mainland Chinese are coming back also, and the mix of people from different countries is larger than it used to be. We see more clients from far away countries, a lit bit further than Mainland China or Hong Kong.

What policies would you like to see the MSAR Government implementing?
On my side, I guess I would like to see an extension of the airport or an open sky policy since we only see local or regional planes landing in Macau. If larger international planes could land here it would be ideal, since if you want to come to Macau from international destinations you have to go to Hong Kong. We are losing a portion of people I think that stay in Hong Kong and come to Macau for only one day or one night. Having a large international hub like Dubai, where the airport and airline company Emirates Airlines is used to drive tourism in the destination, would be very helpful. I don’t know to what extent this would be possible, but Macau should be promoted as a destination not just for gaming, and use all means at our disposal to bring people here, not to Hong Kong.

The Taipa Ferry terminal has just opened and other projects such as the Hong Kong-Zhuhai-Macau Bridge are under construction. How do you think these projects will impact visitation to the Cotai area?
The projects are all great. To have a new ferry terminal driving more people here through sea, it all goes in the right direction of driving people straight to Macau.

Do you think the city is ready for more than 30 million visitors a year?
I believe so. We’ve seen an increase in foot traffic in hotels and Galaxy in general. Cotai is on the right side for that because it’s easier to be transported and go around here than on the Macau peninsula. The new terminal will help.

Do you consider that Macau has all the elements to be a World Centre of Tourism and Leisure?
I would say not yet, but aiming towards that.

Does Banyan Tree Macau usually hire local companies through its procurement?
Yes, for services I would say 90 per cent is done locally. For all procurement needs we go through Galaxy, centralising everything. We have a very limited impact on that. There are five hotels in the property so you need to have synergies and lower your costs.

How about in terms of employees, what is the percentage of local residents?
I believe about 35 per cent are residents. Of course we’re always looking for more but, like everybody else, we have some problems. I understand the need for the government to cater to its own citizens, but some speciality work is not easy to find locally and we’re competing with many more casinos. It takes time to train the right people for the right position, and maybe they won’t stay with you. When I was working in Bahrain, we had to have 40 per cent of locals and it was very difficult as well to find local qualified workers willing to work in the hotel business.

What kind of sustainable policies has Banyan Tree implemented?
Banyan Tree was a pioneer in corporate social responsibility (CSR), when it opened 25 years ago. These policies became larger and larger. The CSR department is headed by Ms. Ho, wife of our chairman, who puts a huge emphasis on sustainability. We don’t just talk the talk, but we also walk the walk. We have many policies to reduce our carbon footprint and we look to reduce our waste year after year. The same thing for electricity and water consumption, which we try to reduce at least by 5 per cent every year. We’ve also almost finished changing all our lightbulbs to LED’s.

What are Banyan Tree Macau’s objectives for this year?
This year we’re planning to renovate part of the hotel, starting from the villa – our key differentiation product. The mock-up has already been done and we’ll proceed forward when everybody is happy with it. Then we will continue with the tower building, with a two-year plan to renovate the entire hotel. We will not extend its room capacity, this one is the largest hotel the group has now. There are 11 projects being developed in Mainland China, with some being larger, and 10 already functioning in the country.

How about the Japanese market?
In that market, we’re opening a hotel in Okinawa towards the end of the year. Banyan Tree is very Asian-centric and we always try to develop with local partners, which is the best solution nowadays, as hotels are becoming more and more expensive as clients demand more and more amenities. You have to have a partnership.