Value rooms with the ‘cool factor’ may soon change hotel industry

By giving the traveler exactly what he wants, Jay Aldeguer of the Islands Group is all set to conquer the affordable market.

With average hotel occupancy rate in 18 months registering at 90 per cent, or way above the average hotel occupancy rate of 67.62 per cent in Metro Manila in 2011, the newest business of multi-awarded entrepreneur Jay Aldeguer, president and CEO of the Islands Group, appears to be offering the hospitality industry a fresh paradigm. Described as a “value chic” hotel, it is now offering travelers more than what the industry offers and appears to be catching on quickly.

Islands Stay Hotel now has two properties operating in Cebu which were launched in April and May 2011 and is set to open four more in various locations throughout the country by 2013. Islands Stay franchises will next be operating in Palawan and Makati by early 2013. Two more company-owned outlets in Cebu City are set to receive guests soon after in the third quarter.

The entrepreneur who transformed the souvenir business from a cottage industry to a multi-million enterprise with close to a hundred stores nationwide is now offering “independent-minded travelers” attractive rooms with flatscreen TVs and free wifi at affordable rates. In fact, the fee for a single person sleeping overnight in an Islands Stay Hotel is comparable to that being charged by the better-known retreat houses in Tagaytay City. But the comparison ends there.

Environmental graphics set against a clean white background dominate an Islands Stay room which also comes with a comfortable bed with a duvet, an air-conditioning system with green features and an efficient toilet and bath.  Observes Aldeguer, who was named one of the Ten Outstanding Young Men of the country early in his career and was an Ernst & Young Entrepreneur of the Year awardee: “We focused on what travelers today consider as essentials and what they think is ‘cool’ — connectivity, a comfortable, well-designed room and location. We offer those and cut out the amenities and facilities that no longer matter to them.”

A coffee shop in the hotel, for instance, is no longer important because guests would rather eat the standard breakfast offered by hotels on their way to their first destination.  Big lobbies, extraneous furniture in the guest rooms like dressing tables and bathtubs in the bathroom have also been eliminated from Islands Stay properties. “We prioritize our spending on what counts to our guests. Free wifi, for instance, is high on their list. We then try to overdeliver in terms of service and other matters such as providing them with a rainshower in the bathroom and a USB port on the flatscreen in the bedroom so they can connect their gadgets to it and play games or view photos with greater ease,” he explains.

The Islands Stay formula was affirmed in the opening months of the Mactan property which registered a phenomenal 100% occupancy on the first three months of operation. Aldeguer emphasizes that 98% of guests have been either walk-ins or direct bookings. Familiar with the Islands Souvenirs retail brand which is highly visible in Boracay, Bohol and other top tourist destinations, guests did not have to be persuaded to walk into or book an Islands Stay room through the web when the property opened. They felt right at home amidst the familiar graphics found in almost every Islands Souvenirs store and experienced the same friendly service from hotel staff.

The Islands brand is associated with service, value and a keen understanding of the traveler’s needs, according to Aldeguer. “It looks like our clients believe that an Island’s Stay room would offer them the same.”

His firm’s overall objective is to roll out as many rooms as possible with the unique look and feel of Islands Stay in primary tourist destinations through franchises and company-owned properties. In locations like Bohol and Cebu City, Islands Stay will accept franchise applications to put up outlets with as few as 18 rooms. In Makati, the minimum number of rooms will be 28.

He notes: “In comparison to most hotels, our capital investments are low because we’re flexible as to the number of rooms one can put up and we give the customer only what really matters to him. This flexibility allows us to offer our travelers more rooms in key locations. And because we’re in the best locations, it is easy for us to cater to walk-in travelers or travelers with direct bookings.”

A frequent traveler, Aldeguer looks up to brands like Apple and Virgin Airlines in Europe which have a keen understanding of their customers. He recalls being on a flight to London on the way to Glasgow, Scotland, that got diverted because of weather problems to Birmingham, a minor airport catered only by the small airlines. He disembarked from the airplane disoriented and feeling somewhat vulnerable. He had to catch that flight to Glasgow and now had to scramble to get there.

“When I saw the Virgin Train logo, I immediately felt relief. I felt safe dealing with a brand I was familiar with and knew they took good care of their customers. I took their offer to bring me to Glasgow even if their rates were more expensive,” he recalls. “We want the Islands brand to offer the same connection to the traveler in the Philippines whatever product we offer.”