James Koh’s Global Premium Hotels gets Accor boost

By Cecilia Chow and Amy Tan / EdgeProp Singapore | October 18, 2019 9:00 AM SGT

SINGAPORE (EDGEPROP) - Franchise agreement with international brand Accor sees the rebranding of 15 hotels in his privately-held Singapore portfolio.

 Koh: That’s why Accor saw us as a perfect fit for midscale and economy brands. We are enjoying over 90% occupancy at most of our hotels (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Koh: That’s why Accor saw us as a perfect fit for midscale and economy brands. We are enjoying over 90% occupancy at most of our hotels (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Staff at James Koh’s hotels know their “Boss” has arrived as soon as they see his dark grey and silver Rolls Royce Ghost pull up and park at the side of the building. Koh is not chauffeur-driven in his Rolls Royce as one would expect. After all, he is a billionaire hotelier and property tycoon who is consistently ranked among Singapore’s richest.
“I don’t know why, but I prefer to drive myself,” says the 56-year-old chairman of the privatised Global Premium Hotels Ltd (GPH), as well as executive chairman and CEO of listed Fragrance Group Ltd.
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Most people can’t leave home without their mobile phone these days. For Koh, who carries a Nokia flip phone (the non-smartphone version), it is his pocket calculator that he can’t do without, he says. It is a useful tool, and he demonstrates just how: First, it fits perfectly into his shirt pocket; and he just needs to whip it out, punch in some numbers, do some quick calculations and within minutes, pronounce whether a property or a site for sale is a “yes” or a “no” for him.
ibis budget Crystal, one of 13 properties in the Global Premium Hotels portfolio that has been rebranded ibis budget (Photo: Samuel Isaac Chua/EdgeProp Singapore)
ibis budget Crystal, one of 13 properties in the Global Premium Hotels portfolio that has been rebranded ibis budget (Photo: Samuel Isaac Chua/EdgeProp Singapore)
A recent deal that probably took longer than a yes-or-no response was a franchise agreement between Koh’s GPH and Accor. As part of the deal, 13 Fragrance hotels in GPH’s portfolio will be rebranded ibis budget, according to an announcement by Accor on Oct 7. It also marks the debut of Accor’s ibis budget brand in Singapore.

REBRANDING, REFURBISHMENTS

Six of the 13 Fragrance hotels that are rebranded ibis budget are located in Geylang. As part of the rebranding exercise, the 13 GPH properties are being refurbished to be in keeping with Accor’s brand standards for such hotels. Refurbishment works at nine of the 13 hotels have already been completed as part of the first phase.
The second phase of the franchise agreement with Accor involves the rebranding of two of GPH’s Parc Sovereign Hotels: the 270- room Parc Sovereign Hotel – Tyrwhitt, the biggest in GPH’s portfolio, will be rebranded a Mercure hotel; and the 172-room Parc Sovereign Hotel – Albert Street, will be rebranded ibis Styles. The rebranding and refurbishment works will start towards the end of this year and is scheduled for completion by mid-2020. Koh estimates the refurbishment costs for all 15 hotels to be in the region of $15 million. The 15 hotels under the franchise agreement have a total of 1,621 rooms. Their addition will make Accor the biggest hotel operator in Singapore with total inventory of 7,625 rooms across 30 hotels: 3,357 in the luxury and premium space; 1,840 rooms in the midscale segment; and another 2,428 rooms in the economy range.
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One of the refurbished rooms at the 74-unit ibis budget Imperial located on Penhas Road (Photo: Samuel Isaac Chua/EdgeProp Singapore)
One of the refurbished rooms at the 74-unit ibis budget Imperial located on Penhas Road (Photo: Samuel Isaac Chua/EdgeProp Singapore)

‘GEYLANG – VERY CLEAN NOW’

Prior to the deal, the staff from Accor came to inspect the hotels under GPH, including those in Geylang. They were impressed by how clean and well-maintained the properties were, relates Koh. “They came back and told me, ‘Even your dustbin area is so clean.’”
With the rebranding, Koh has also given the exteriors of the hotels a fresh coat of yellow paint. That is his trademark colour for all the Fragrance hotels – because it is “wang wang” – very bright, very auspicious colour, he says in Mandarin.
According to Ko Lee Meng, deputy chairman and CEO of GPH, who is also Koh’s sister, Geylang has lost much of its notoriety and the stigma attached to being Singapore’s foremost red-light district. “Compared to 10-15 years ago, Geylang is very clean now,” she says.
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 The ibis budget Crystal is located along Lorong 18, which was once-upon-a-time the more notorious streets in Geylang (Photo: Samuel Isaac Chua/EdgeProp Singapore)
The ibis budget Crystal is located along Lorong 18, which was once-upon-a-time the more notorious streets in Geylang (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Koh agrees. Even the most notorious street in Geylang, which Koh says is Lorong 18, has been cleaned up. He points out where the most notorious building once stood on Lorong 18: it is now a vacant site. Koh says it will be redeveloped into a new building for commercial or institutional use, which is in line with the changes in land use for Lorong 4 to 22 proposed by the URA in January 2015.
Geylang is an area Koh knows well, having built the foundation for his hotel empire there. He ventured into the property business when he took over his family’s investment company in the mid-1990s. His first hotel was a 45- room block on Lorong 10 Geylang. He built it in 1995 and sold it two years later for more than double his original investment, he reckons.

‘FLYING DRAGON’

Even before that first hotel was sold, he purchased a bigger site on Lorong 20 Geylang to build the 168-room Fragrance Hotel – Ruby, which opened in 1998. He has developed nearly 30 residential projects and more than 20 hotels in Geylang over the course of more than 25 years. Over time, he has sold some of his hotels there and currently owns just six, he adds.
Koh coined the name “Fragrance”, which is the transliteration of its Chinese name, “Flying Dragon”. “So, the Chinese name came first,” he says.
 One of the biggest rooms among the hotels in Geylang is the one at ibis budget Crystal which has a 270-degree corner view and which has been dubbed "The Orchard Road of Geylang" (Photo: Samuel Isaac Chua/EdgeProp Singapore)
One of the biggest rooms among the hotels in Geylang is the one at ibis budget Crystal which has a 270-degree corner view and which has been dubbed "The Orchard Road of Geylang" (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Even though he has developed so many hotels since, Koh knows off the top of his head, the exact number of rooms in most of his properties. At the 125-room Fragrance Hotel – Crystal, is what is considered one of the biggest hotel rooms among Koh’s hotels in Geylang. The room offers a 270-degree city view and Koh has dubbed it, “The Orchard Road of Geylang”.
He initially named his Fragrance hotels after gemstones – Ruby, Sapphire, Emerald and Crystal – inspired by his family’s jewellery business, which is now managed by younger brother, Wee Seng, CEO of Singapore-listed Aspial Corp.
When he ran out of names of gemstones, he switched to naming his Fragrance hotels after their locations, for instance Fragrance Hotel – Selegie, Fragrance Hotel – Balestier, and The Fragrance Hotel – Joo Chiat. Some of the Fragrance hotels in Geylang that now carry the Ibis budget flag include the 126-room Fragrance Hotel – Emerald (renamed ibis budget Emerald); the 129-room Fragrance Hotel – Pearl (ibis budget Pearl); and the 60-room Fragrance Hotel – Sapphire (ibis budget Sapphire).
Across the road from the ibis budget Sapphire on Lorong 10 is an empty plot where Koh intends to build a new 38-room hotel, which will be branded ibis budget Ivory. Koh says he expects to open the hotel next year.
ibis budget Emerald (formerly Fragrance Hotel - Emerald) is one of the early series of hotels built by James Koh, and named after gemstones (Photo: Samuel Isaac Chua/EdgeProp Singapore)
ibis budget Emerald (formerly Fragrance Hotel - Emerald) is one of the early series of hotels built by James Koh, and named after gemstones (Photo: Samuel Isaac Chua/EdgeProp Singapore)

PART OF GLOBAL NETWORK

With an international brand like ibis budget, the GPH hotels under the franchise scheme will benefit from being part of Accor’s global distribution network and reservation system. The most visible difference is in the hotel clientele, as Accor’s clientele includes many more international tourists. Those who are members of LeClub Accor Hotels can also earn loyalty points through their stays at the new ibis budget hotels in Singapore.
Besides the six Fragrance hotels in Geylang, another seven Fragrance hotels sitting within the GPH portfolio are included in the franchise agreement with Accor. They are located in the city fringe, and include the 57-room ibis budget West Coast (formerly Fragrance Hotel – Waterfront on Pasir Panjang Road); the 32-room ibis budget Mount Faber (formerly Fragrance Hotel – Royal on Telok Blangah Road); the 95-room ibis budget Selegie (formerly Fragrance Hotel – Selegie); and the 101-room ibis budget Clarke Quay (formerly Fragrance Hotel – Riverside on Hong Kong Street).
All in, GPH has a portfolio of 23 hotels, valued at about $1.4 billion earlier this year. Out of the 23 hotels, 21 sit on freehold sites, while the other two are of 99-year leasehold tenure, namely the ibis budget Clarke Quay (former Fragrance Hotel – Riverside) and the Parc Sovereign Hotel – Albert Street, and will be rebranded ibis Styles.
One of the rooms at Parc Sovereign Hotel - Tyrwhitt, which is the biggest hotel in Global Premium Hotels portfolio, and will be rebranded Mercure by Accor under the franchise arrangement (Photo: Samuel Isaac Chua/EdgeProp Singapore)
One of the rooms at Parc Sovereign Hotel - Tyrwhitt, which is the biggest hotel in Global Premium Hotels portfolio, and will be rebranded Mercure by Accor under the franchise arrangement (Photo: Samuel Isaac Chua/EdgeProp Singapore)
With 15 properties under the franchise agreement with Accor, that leaves eight more still under the Fragrance brand. However, hotels in Singapore are enjoying high occupancy, averaging 86% in August and 93% in July, according to Singapore Tourism Board’s latest figures. GPH’s Koh is therefore fielding proposals from other international operators in Singapore, especially those with new-to-market brands.

OVERSEAS FORAY

According to Koh, his Fragrance hotels have always been popular among tour groups from China and countries in Southeast Asia. There are also a lot of MICE visitors and business travellers. “That’s why Accor saw us as a perfect fit for midscale and economy brands,” he says. “We are enjoying over 90% occupancy at most of our hotels.”
The hotels enjoy average room rates of about $100 a night, adds GPH’s Ko. Besides the 23 hotels in Singapore, Koh also owns a 48-room hotel in Queensland under the privately held GPH. The hotel, purchased three years ago, is leased to an independent party. Koh is also developing three hotels in Australia under GPH. The first hotel is in Hobart, Tasmania, and scheduled to open in 1Q2020; two more are in the pipeline – one in Perth and the other in Launceston, Tasmania.
The garden wing of Parc Sovereign Hotel - Tyrwhitt (Photo: Samuel Isaac Chua/EdgeProp Singapore)
The garden wing of Parc Sovereign Hotel - Tyrwhitt (Photo: Samuel Isaac Chua/EdgeProp Singapore)
However, demand for hotels remains strong in Singapore. On Oct 7, Hoi Hup paid $475 million for the 342-room Andaz hotel at integrated development DUO by M+S. It is considered a record-breaking price for a standalone hotel and translates to $1.39 million per key.
“Singapore is still a good place to invest in,” says Koh. “The rich still need to find a place to put their money.”
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