The Straits Times featured BDO Consultants’ Branding Advisory project with client 5Footway, showcasing how excellent brand management, brand alignment and market feasibility research can make the critical difference in business expansion.
BRANDING OPENS DOORS OF OPPORTUNITY
29 Oct 2014
5FOOTWAY Inn, a boutique hostel operator in Singapore, aspires to be in every major city in the world.
Since its 2011 start, the SME has grown to become the largest boutique hostel operator in Singapore, with 700 beds in seven restored heritage buildings.
Now, 5Footway is set to enter the international scene, with first stops in Hong Kong and Macau.
“Singapore is a small catchment area. So when we started this business, it was natural to make plans to expand beyond,” says Mr Joshua Goh, 36, co-founder and a director of 5Footway.
“Travel consumerism is big worldwide; even when there is a global downturn, people are still travelling.
“We want to milk the opportunity and grow our company,” he says.
In 2012 – a year after he and his partner, Mr Lim Boon Cheow, 35, started their business – 5Footway approached International Enterprise (IE) Singapore to explore ideas for overseas expansion.
5Footway’s key branding centres on the integration of cultural heritage with modern technology.
IE considered this aspect of the company and suggested a branding exercise to convey 5Footway’s brand effectively to its overseas target audience, especially the southern China market comprising Macau and Hong Kong.
Under the Global Company Partnership (GCP) programme, IE first examined the data and statistics that 5Footway had already collected.
IE found a misalignment of sentiments on the part of customers, causing the brand message to be unclear.
The branding exercise took a year to complete and led to the creation of new brands and a new holding company, Unchartered Co, for 5Footway to clearly distinguish its presence and products in the different markets.
In Hong Kong, the boutique hotels will be known as Cue Hotels while boutique hostels in Macau will be known as Wu Bu Lang.
“We undertook the branding exercise to refine our positioning, clarify our direction and to aptly represent our company’s character,” says Mr Goh.
By enhancing 5Footway’s brand value, the company will have better opportunities to market its property projects and to land management contracts from reputable hospitality operators abroad.
Last year, an opportunity opened up when a business acquaintance’s 22-room boutique hotel in Macau was under performing.
The hotel owner was impressed with 5Footway’s track record of running hostels successfully and expanding its number of outlets.
Recognising that its business model was suitable for his hotel, he approached 5Footway to run the establishment for him. The management contract was the first of its kind for 5Footway.
“The owner has since dubbed us ‘property doctor’ for making his hotel appreciate in value.
“We hope to secure more management contracts in the future as a means to diversify our core business,” says Mr Goh.
In the same year, while managing the boutique hotel, 5Footway started exploring Macau and was keen to set up hostels there.
However, there were challenges in penetrating the Macau market, where budget hostels were unheard of. Getting the necessary permits to operate in the territory was daunting.
“As with any new market, there’s always the challenge of understanding foreign rules, cultural practices and manpower issues.
“However, we had friends, business associates and IE consultants who gave us valuable advice,” says Mr Goh.
“We were lucky that we did not step on any major minefield.”
He adds that challenges are part and parcel of overseas expansion efforts, noting that those faced in Macau have only made the company more determined to enter the market.
The company is continuing with efforts to this end.
5Footway also set out to survey the Hong Kong market last year, and found it to be suitable for its first hotel abroad.
5Footway had a team of business development managers stationed in Macau and Hong Kong to do feasibility studies and survey the potential in both markets.
Mr Goh says their efforts will bear fruit later this year, when 5Footway soft launches its first 38-room boutique hotel in Hong Kong.
“We have plans to increase this by up to 80 rooms by the end of 2015,” adds Mr Goh.
The Hong Kong project was undertaken with the help of IE’s GCP.
IE helped with 5Footway’s business development activities in Hong Kong and guided it in its efforts to obtain the necessary approvals from the respective Hong Kong authorities.
The company is set to launch two to three more boutique hotels in Hong Kong and Macau by next year.
5Footway is also working to establish a presence in mainland China with the help of IE.
“With IE’s presence and contacts in China, our Chinese counterparts will look at us more favourably,” says Mr Goh.
5Footway aspires to reach every major city in the world.
“We see budget travel as a trend and we want to have a presence in all the major cities that backpackers go to,” says Mr Goh.
“It is our vision to provide budget yet boutique-like accommodation for our guests.
“We will continue to enhance the experience and create a better product.”
Source: The Straits Times © Singapore Press Holdings Limited. Reproduced with permission.