Philippine hotel chain goes global with Japan ski resort development

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NANCY ZHENG and YUICHI SHIGA, Nikkei staff writers

TOKYO -- Singapore-based Philippine chain Hotel101 is planning to launch one of its first overseas facilities at the northern Japanese ski resort of Niseko based on a model of fast-food-style standardization, its global CEO told Nikkei Asia.

Hotel101, aiming to list on the Nasdaq later this year, currently operates solely in the Philippines but is planning to rapidly expand abroad, targeting 25 countries in the short term. It intends to achieve that by holding down costs.

"We were very fortunate when we were looking for prime hotel locations in prime areas that we believe had a strong demand and not enough supply yet," Hotel101 Global CEO Hannah Yulo-Luccini said in an interview in Tokyo.

She added that the company was also lucky to have "found a very prime piece of property. ... I think one of the most important things in our expansion is really the availability of prime land."

The brand was created by the real estate company DoubleDragon, established by the founders of two popular Filipino fast-food chains: Jollibee's Tony Tan Caktiong and Mang Inasal's Edgar Sia. Jollibee has a stronger presence in the Philippines than the global fast-food giant McDonald's. Its parent company, Jollibee Foods, operates nearly 7,000 stores worldwide under multiple brands.

Niseko, on Japan's northern island of Hokkaido, attracts foreign visitors with its world-class snow resorts and "Japow" -- exceptionally light, dry and fluffy powder snow. The DoubleDragon group has acquired an 11,101-square-meter plot of land.

Construction has started on the hotel, which is expected to open in 2026. It will feature 482 standardized 21-sq.-meter rooms equipped with one queen-size bed and one single bed, accommodating up to three people with full amenities, according to a company disclosure. The average fee per night is expected to be 20,000 yen ($127).

Yulo-Luccini says Hotel101 was lucky to have "found a very prime piece of property" in Hokkaido. (Photo by Yuichi Shiga) 

Yulo-Luccini aims to offer a service model based on standardizing rooms with uniform bedding, furniture, wallpaper and even "one type of [light] bulb," making it easier to streamline operations and maintenance.

She said that standardization makes "training ... much, much easier" and raises housekeeper productivity. It also differentiates the brand from competitors that offer wide varieties of room types.

For instance, U.S.-based Hyatt Hotels will open three hot spring resorts in Japan, offering traditional Japanese-style lodging experiences under a new brand. Each hotel will have just 30 to 50 rooms.

"You do everything the same in a large-scale setting," Yulo-Luccini said. "It's like a fast-food business." She also said the planned 500-room scale marks a difference from Japanese low-budget hotels called "business hotels," which usually have 100 rooms.

"No matter where you go, from Japan to London to the U.S., the same burger tastes the same," she added.

"We think ... our first initial direct development in Niseko will demonstrate that this business model can thrive in a country like Japan, and we hope that it will open a lot of other opportunities in different places around Japan" she said.

The company is open to aligning with a partner company to create a joint venture to expand the international business.

Hotel101 also plans to launch hotels in Madrid, where the company says ground has been broken, and Los Angeles, where land has been acquired. Its long-term target is to have 1 million rooms in over 100 countries and become one of the top five global hotel brands.

Although its business model is based on growth in the tourism industry, raising funds depends on the mindset of investors regarding the industry.

The chain is trying to differentiate itself by selling individual rooms to investors, citing that as a reason for its rapid expansion, as investor money can quickly be used for the next hotel project. Investors can receive 30% of the revenue generated from the rooms through Hotel101's revenue-sharing structure.

The price for buying a Hotel101 room at Niseko is around 37 million yen. The company started selling rooms there last August and says sales are "tracking our expectations."

"In the early stages there'll be some discounts that get a little lower than that," Yulo-Luccini said of the current price. Later stages will have higher prices as inventory decreases, she added.

She also touted the Nasdaq listing as a "catalyst." Hotel101 is planning to combine with a special purpose acquisition company (SPAC) in the U.S. for the initial public offering. If the company successfully lists on the Nasdaq, she emphasized, it would be the first Filipino brand to achieve that milestone.

"This will give us a lot more access to public markets [and] capital-raising globally," she said. She added it will also raise the brand's awareness globally, "and we think this will also allow us to open doors to many potential partnerships."