Southeast Asia: A new model for hotel development

While growth prospects in North America may be uncertain for the next few years, travel in Southeast Asia is growing, offering expansion possibilities for hotel chains that understand the requirements of the region's culture and business arrangements. Like all other aspects of doing business in Southeast Asia, negotiating contracts is largely a matter of building personal relationships. The strongest trend in contract negotiations is the expansion of the variety of contract provisions, a result of the growing number of options available to owners. Whereas owners may need or want equity participation, many are unwilling to share control with an equity partner. For a foreign hotel company, entering the Southeast Asian market is essentially a question of finding a local partner or owner with whom or for whom to work. To gain recognition and build personal relationships, the international hotel company must establish a permanent base in the region. This owner-driven model of hotel operation may have application outside of Southeast Asia.