final h2-mar 24,10
TRANSCRIPT
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1
H2-Hotel
Development
Situation Overview
by Market Segments
Draft Presentation - Mar 23, 10
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Situation Overview by Market Segments
1. HRIs Segmentation Performance
2. Contract Segment Mix
3. Average Daily Rate + Incremental Spend by Market Segment
4. Market Segment Opportunity Summary
5. Facility Requirements by Market Segment
6. Hyatt Regency Incheon Assumptions
Future Vision with Addition of H2
8. Future Vision
9. Rooms Configuration
10. F & B Configuration
11. HRI New Business Model
Appendix
12. HRI Function Rooms Utilization 2006 January ~ 2010 February
13. Lost Business Main Reasons 2006 January ~ 2010 February
14. Total Catering Lost Business - 2006 January ~ 2010 February
15. Total MICE Lost Business 2006 January ~ 2010 February
16. Catering Lost Business Due to Space Constrains 2006 January ~ 2010 February
17. MICE Lost Business due to space constrains 2006 January ~ 2010 February
18. Target Market ing Rooms
19. Total Passenger Growth by Region
20. Target Market ing F & B
21. KAL & Hanj in Production
22. IFEZ Large Function Space Competitors Stats
23. Large Function Space Projections
24. Domestic MICE Group Demand Trend (by actual number)
25. Domestic MICE Group Demand Trend (by portion)
26. YoungJong Island Distribution of Potential Large Convention Space Competition and Campus Concept Market Demand
27. Songdo-Distribution of Potential Large Convention Space Competition and Campus + Residence Concept Market Demand
28. Cheongra-Distribution of Potential Large Convention Space Competition and Campus Concept Market Demand
Index
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1. HRIs Segmentation Performance
* Total No. of Room Nights by Market Segment
IT
Gro
Contract
Total
4
6
8
1
1
14
16
18
4 5 6 7 8 9 1 YT
IT Gro Contract Total
%%
7 %68%
8%1 %
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2. Contract Segment Mix
Main Contracted Accounts
-
20,000
40,000
60,000
80,000
100,000
120,000
2004 2005 2006 2007 2008 2009
RoomN
ights
Polar / Atlas
Northwest
Cathay Pacific
Hanjin
KAL
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3. Average Daily Rate + Incremental Spend by Market Segment
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Airline Casino Business
Group
Leisure Group Business FIT Leisure FIT
Won
ADR Rev. per Night
ontract roup FIT
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4. Market Segment Opportunity Summary
After reviewing the statistics we believe that there will be a strong demand
in the next 3 10 years in the following segments:
Market Segment Potential rowth ieldPotential Incremental
Spend
ontract
Casino High High High
Hanjin Layover High Low Low
KAL High Low Low
roup
Market Segment
MICE 50-300pax High Medium Medium - High
MICE 300+ Medium Low - Medium Medium
Wedding 300+ Medium Medium - High Medium - High
FIT
FIT Leisure High Medium - High Medium - High
FIT Business High High Medium
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5. Facility Requirements by Market Segment
asino Businessroup (MI E)
FIT Business FIT Leisure Wedding Airline/Hanjin
Leisure options
(Spa)
(Spa)
Seasonal options(Spa/Swimming Pool /
Ice Rink)
(Spa)
Shopping/Duty Free/Retail
(Low Price)
F&B alternatives
(Private room
facilities)
(low medium
spend)
Transportation
Kids facilities
Additional guest rooms
Additional floor space for the casino
Corporate Team Building Alternatives
Destination Venue
Entertainment options
Executive Recreational options
Group Check in
High Tech A.V./Quality
Medium Size Meeting rooms (Regency Size )
Networking Area dedicated to AirlinePersonnel (e.g. Table Tennis, Tennis, Pool
Table),
Residential
Storage space
Bridal room, Photography, Dress rental etc.
1 Stop Shopping
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There will no doubt be new emerging markets, but we should continue to focus on those that are continually
building and how we can yield them better.
Based on the historical data where we have seen Group business decline and FIT business plateau. We see a
opportunity for potential growth in the market segments of FIT, Group and Contract especially as we emerge
from a global economic recession.
The potential for high yield growth will come from market segments 1. Group , 2. FIT and 3. Casino , and this
is likely to be sustained if the planned visionary developments for the greater Songdo and Yong Jeong -doareas develop as planned.
The following recommendations are based on the statistics and information that has been made available to us
from the various government agencies. Although there is no guarantee as to the timeframe. A cautious approach
should be made when considering the timeframe of the development of these projects and potentially the
financial commitment in lieu of the recent global recession.
The opportunity to position the hotel at this early stage of development and concept , means that we must
understand the environment around us and the developments that are planned for the future before any detailedcommitment is confirmed.
We must also assume that surrounding developments may be delayed as we have already seen since the
opening of Hyatt Regency Incheon in 2003.
In order to be attractive to both the Incheon market and greater Seoul Market we must be able to offer a superior
product that is attractive to the MICE, FIT, and Leisure markets year round.
6. Hyatt Regency Incheon Assumptions
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7. Hyatt Regency Incheon Assumptions continued
Most importantly , we need to be self sufficient in all aspects of our facilities in order to attract the target markets
which compare us to city locations. i.e. A Destination venue
The facilities are already world class , but with the potential developments and long term vision for the island , we
should proactively look at other markets that can support the hotel to be a market leader in the next 10-20 years.
After a detailed review of the environment developing around us and the renewed access to the island, we
suggested the following options that could be considered for further development.
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10
H2-Hotel
Development
Hyatt Regency Incheon
Future Vision with Addition ofH2
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8. Future Vision
Hyatt Regency Incheon is the leading deluxe 5 star hotel in the airport area and Incheon.
With authentic hospitality, we serve International and Korean travelers the most dynamic
pragmatic lifestyle experience.
We want to be the market leader and compete with no one else. Concepts will cater to the
international and local market but will be original in the thought process, pragmatic and
catering for the local market. Our designed concepts will focus on the best utilization of
our space to generate the best return on investment for the areas and efficiency.
It is generally thought that demand for a 1000 pax Ballroom may only be when the
Songdo and Yong Jeong do areas have reached the full maturity of their development
stages which is likely to be in 10 15 years. In the immediate future 5 10 years, the
demand would be for medium to large size function rooms.
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It is understood that the new H2 project will need to target new markets and future
potential business opportunities in order to expand the current business in the area.
In conclusion to the review of the future developments in the area, we see the area to
potentially become self sufficient and a sought after leisure destination. We should
anticipate that there is potentially a bigger picture in the long term, but not to over
invest for a lower return on investment in the short term ( 5 10 years).
If the design scope permits , venues should be specifically designed and segregated ,
taking into consideration noise and pre-function area space allocation.
8. Future Vision
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9. Rooms onfiguration
Sqm Total Sqm
(215) King Rooms 36 7,740
(105) Twin Rooms 36 3,780
(5) Disabled Rooms 36 180
(66) Regency Club King Rooms 36 2,376
(34) Regency Club Twin Rooms 36 1,224 (20) 1bedroom Service Apartments 72 1,440
(15) 2 bedroom Service Apartments 90 1,350
(25) Suites 72 1,800
(13) Executive Suites 108 1,404
(1) Presidential Suites 144 144
(1) Chairman Suites 180 180
Club Lounge, Boardroom, & Pantry 288 288
Guest Floor Service Areas (estimate of 25) 15 375
500 Total uest Rooms & Suites 22,281
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10. F & B onfiguration
Option 1 F & B ADD
1 - Restaurant 200 seats (with Bar facility)
1 - Ballroom 800sqm ( divisible into 3 sections )
8 - Smaller function rooms
1 Lounge
Target the small/medium sized MICE ie. 500 persons and less as the number of these types of event are greater in
volume and trends show event sizes are generally getting smaller.
Taking this option would also be conducive to the wedding business which also is seeing a trend of size reduction and
catering only.
Also given that within the vicinity we have Song-do - CONVENSIA, KINTEX and potentially MILANO (Local
Convention & exhibition centers) this would compliment these facilities rather than directly compete.
PROS
- Flexibility to handle many small to medium MICE/Events Groups
- High restaurant utilization expected with MICE for lunch and Hanjin for dinner
ONS
- Can not handle lunch and dinner demand with full Hotel and Banquet occupancy
- Can not accommodate 500+ MICE meals in one venue only
- Limited room for restaurant growth on week end (Currently reach full capacity)
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10. F & B onfiguration
Option 2 F & B ADD
1 Restaurant 200 seats (with bar facility)
1 Ballroom 1,600sqm ( divisible into 4 sections )
1 Meeting Room (Type A) 300sqm (divisible into 2 sections)
2 Meeting Room (Type B) 100sqm
3 Meeting Room (Type C) 75sqm
2 Meeting Room (Type D) 50sqm
1 Board Room 45sqm
1 Lounge
A large ballroom potentially long term is what would be required to support large MICE groups of over 500+ persons.
The volume of these types of events using hotel facilities are limited and guest accommodation util ization tends to be
lower.
On the contrary this configuration would allow flexibility for the up to 500pax MICE as meeting + meals can be
confined to one area.
Utilization of the whole Ballroom would be low and the tendency would be that these events would be weddings or
social event therefore a meal venue would not be required.
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10. F & B onfiguration
Option 2 F & B ADD
PROS
- Open opportunities to compliment Song-do CONVENSIA
- Increase restaurant variety offerings.
- Flexibility to handle multiple events at one time e.g. 2 weddings, 2 or more smaller MICE groups
ONS
- Challenge to sell the whole Ballroom on a regular basis in the short term
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11. Hyatt Regency Incheon New Business Model
H1
523 Rooms 500 Pax Ballroom
1 x Breakout Rooms 100 pax
4 x Breakout Rooms
Restaurant 8 401 Seats
Spa
1 Restaurant 200 seats + Bar Facility
H1
523 Rooms 500 Pax Ballroom
1 x Breakout Rooms 100 pax
4 x Breakout Rooms
Restaurant 8 401 Seats
Spa
1 Restaurant 200 seats + Bar Facility
H2 Option 1
Rooms
500 Rooms
F & B
1 Ballroom 800sqm ( divisible into 3 sections )
2 Meeting Room (Type A) 120sqm
3 Meeting Room (Type B) 80sqm
2 Meeting Room (Type C) 50sqm
1 Board Room 45sqm 1 Lounge with R/S pantry + Casino offerings
Other Facilities
Gymnasium Room
Business Centre
Administrative Offices
In flight Catering Production Kitchen
Casino
H2 Option 2
Rooms
500 Rooms
F & B
1 Ballroom 1,600sqm ( divisible into 4 sections )
1 Meeting Room (Type A-divisible into 2 section) 300sqm
2 Meeting Room (Type B) 100sqm
3 Meeting Room (Type C) 75sqm
2 Meeting Room (Type D) 50sqm
1 Board Room 45sqm
1 Lounge with R/S pantry + Casino offerings
Other Facilities
Gymnasium Room
Business Centre
Administrative Offices
In flight Catering Production Kitchen
Casino
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18
H2-Hotel
Discussion
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Situation Overview by Market Segments
1. HRIs Segmentation Performance
2. Contract Segment Mix
3. Average Daily Rate + Incremental Spend by Market Segment 4. Market Segment Opportunity Summary
5. Facility Requirements by Market Segment
6. Hyatt Regency Incheon Assumptions
Future Vision with Addition of H2
8. Future Vision
9. Rooms Configuration
10. F & B Configuration
11. HRI New Business Model
Appendix
12. HRI Function Rooms Utilization 2006 January ~ 2010 February
13. Lost Business Main Reasons 2006 January ~ 2010 February
14. Total Catering Lost Business - 2006 January ~ 2010 February
15. Total MICE Lost Business 2006 January ~ 2010 February
16. Catering Lost Business Due to Space Constrains 2006 January ~ 2010 February
17. MICE Lost Business due to space constrains 2006 January ~ 2010 February
18. Target Market ing Rooms
19. Total Passenger Growth by Region 20. Target Market ing F & B
21. KAL & Hanjin Production
22. IFEZ Large Function Space Competitors Stats
23. Large Function Space Projections
24. Domestic MICE Group Demand Trend (by actual number)
25. Domestic MICE Group Demand Trend (by portion)
26. YoungJong Island Distribution of Potential Large Convention Space Competition and Campus Concept Market Demand
27. Songdo-Distribution of Potential Large Convention Space Competition and Campus + Residence Concept Market Demand
28. Cheongra-Distribution of Potential Large Convention Space Competition and Campus Concept Market Demand
Index
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H2-Hotel
Development
Appendix Materials
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21
12. HRI Function Rooms Utilization 2006 January ~ 2010 February
0%
10%
20%
0%
40%
50%
60%
70%
80%
2004 2005 2006 2007 2008 2009
Se re ate allroom 280~550) Ballr ( 8 55 ) Regency
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13. Lost Business Main Reasons2006 January ~ 2010 February
8%
5%
3%
16%
9%
18%
41%
Alternate Destination Function Space Issue Customer Budget
Speaker Cancelled Location Competitors
Others
50% of our lost business losses
are somehow related to our function
space competitiveness
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14. Total atering Lost Business - 2006 January ~ 2010 February
The total number of lost cateringfunctions since 2006 is 649
55% (354) were small scale
functions under 100pax
25% (162) were small-medium scale
functions between 100 and 300pax.
7% (46) were medium scale
functions between 300 and 500pax
8% (54) were large scale functions
between 500 and 1000pax
5% (33) were very large scale
functions with more than 1000pax
atering Lost Business
100 ~ 300
25%
300 ~ 500
7%
500 ~ 1000
8%
More than
1000
5%
Less than
100
55%
Unit : Pax
o. of Function Average o. of Pax
Less than 100 354 41
100 ~ 300 162 202
300 ~ 500 46 400
500 ~ 1000 54 6 0
More than 1000 33 2,401
Total 649 747
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15. Total MI E Lost Business 2006 January ~ 2010 February
MI E Lost Business
100 ~ 500
41%
500 ~ 1000
8%
Less t an100
4 %
More t an
1000
8%
nit a
MI E Lost Business
100 ~ 00
2%
More t an
1000
9%
00 ~ 500
9%
Less t an
10042%
500 ~ 1000
8%
nit a
No. of Function Average No. of a
Less t an 100 239 49
100 ~ 00 176 186
00 ~ 500 49 392
500 ~ 1000 42 692
More t an 1000 48 2,053
Total 554 674
T e total number of lost MI EBusiness since 2006 is 554
42% (239) were small scale
functions under 100pax
2% (176) were small-medium scale
functions between 100 and 300pax.
9% (49) were medium scale
functions between 300 and 500pax
8% (42) were large scale functions
between 500 and 1000pax
9% (48) were very large scale
functions with more than 1000pax
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16. atering Lost Business Due to Space onstrains 2006 January ~ 2010 February
No. of Function Average No. of Pax
Less than 100 16 35
100 ~ 300 9 211
300 ~ 500 2 430
500 ~ 1000 5 666
More than 1000 3 1,980
Total 35 664
The total number of catering
functions lost due to space
constrains since 2006 is 35
45% (16) were small scale functions
under 100pax
26% (9) were small-medium scale
functions between 100 and 300pax.
6% (2) were medium scale functions
between 300 and 500pax
14% (5) were large scale functions
between 500 and 1000pax
9% (3) were very large scale
functions with more than 1000pax
atering Lost Business
100 ~ 300
26%
300 ~ 500
6%
500 ~ 1000
14%
More than
1000
9%
Less than
100
45%
nit Pax
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17. MI E Lost Business due to space constrains2006 January ~ 2010 February
No. of Funct ion Average No. of Pax
Less than 100 4 83
100 ~ 300 8 198
300 ~ 500 2 328
500 ~ 1000 3 708
More than 1000 7 2,825
Total 24 331
The total number of lost MI E
Business due to space constrains
since 2006 is 24
17% (4) were small scale functions
under 100pax
33% (8) were small-medium scale
functions between 100 and 300pax.
8% (2) were medium scale functions
between 300 and 500pax
13% (3) were large scale functions
between 500 and 1000pax
29% (7) were very large scale with
more than 1000pax
MI E Lost Business
100 ~ 300
33%
More than
1000
29%
500 ~ 1000
13%
Less than
100
17%
300 ~ 500
8%
Unit : Pax
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215 King Rooms / 110 Twin Rooms Transient travelers from growing segments (regional tourist, Chinese tourist, long-haul layovers)
Honeymoon market
Family Leisure in summer & winter school breaks
Hyatt Intl Limiter Time Offers
MICE
66 Regency lub King Rooms / 34 Regency lub Twin Rooms FIT Corporate
MICE VIPs full charge upgrades
Casino regular guests
High OCC upselling
Suites
MICE overseas VIPs
Casino top rollers
Foreign Governments delegates
Residential Suites 2 Bed - Residential Suites 1 Bed
Incheon-Development overseas long-term guests (I.e. Songdo-related)
Foreign delegates on IIAC projects
Airline/IIAC-development, passenger growth projections management staff
18. Target Marketing Rooms
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19. Total Passenger rowth by Region
Europe
Asia
N. America
World Wide
Passenger/ Logistic
Passenger/ Logistic
Passenger/ Logistic
Passenger/ Logistic
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0
10000
20000
30000
40000
50000
60000
70000
2004 2005 2006 2007 2008 2009
KAL & Hanjin Production
KAL rew Hanjin
21. KAL & Hanjin Production
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22. IFEZ Large Function Space
ompetitors StatsAppendix
NA: Non-Announced yet
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23. Large Function Space Projections
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24. Domestic MI E roup Demand Trend (by actual number)
2006 2008 International MICE group demand in Korea
Source: Korean Tourism Organization, 2009
MICE group with less than 500 pax accounts for 70%.
Groups between 100 and 500 pax accounts for 51%.
0
50
10 0
15 0
20 0
25 0
L e s s t
10 0
10 0 0 0 30 0 500 5 00 1,000 M ore t
1,00 0P a x
2006
2007
2008
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25. Domestic MI E roup Demand Trend (by portion)
2006 2008 International MICE group demand in Korea
Source: Korean Tourism Organization, 2009
MICE group with less than 500 pax accounts for 70%.
Groups between 100 and 500 pax accounts for 51%.
0%
5%
0%
5%
0%
5%
0%
5%
40%
e ss t an
1 00
100 ~ 300 300 ~ 500 500 ~ 1 ,00 0 M ore t an
1,0 00P a
200 6
200 7
200 8
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26. oungJong Island Distribution of Potential Large onvention Space
ompetition and ampus oncept Market Demand
Yon g yu & Mu i Tour Co m p l e x(2020) MGM the m e pa rk
Un b o ok Le i sure c o m p l e x
(2014)
Logis t ic c o m p l e x (2012~ 2017) Fie ra Miilano Inc he o n Co m p l e x
S ky City (202 0)
- Me d i - c i ty
Wa te r Pa rk
Air City
Fash io nIs la nd (2014)
Fa nt a s y o rld (2020)
M agnetic rain (2013)
Young jo ng Broad way
(2013)
Yon g yu & Mu i Tour Co m p l e x(2020) MGM the m e pa rk
Un b o ok Le i sure c o m p l e x
(2014)
Logis t ic c o m p l e x (2012~ 2017) Fie ra Miilano Inc he o n Co m p l e x
S ky City (202 0)
- Me d i - c i ty
Wa te r Pa rk
Air City
Fash io nIs la nd (2014)
Fa nt a s y wo rld (2020)
M agnetic rain (2013)
Young jo ng Broad way
(2013)
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27. Songdo-Distribution of Potential Large onvention Space ompetition
and ampus + Residence oncept Market Demand
Convens ia
Inche o n Twin To we rs
(151F, 2013)
Bio , IT ce nte r
(2011)
NEAT Trade
Tow er (2010)
Internatio na l Scho olJac k Nicklous Golf Club
Convens ia
Inche o n Twin To we rs
(151F, 2013)
Bio , IT ce nte r
(2011)
NEAT Trade
Tow er (2010)
Internatio na l Scho olJac k Nicklous Golf Club
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28. heongra-Distribution of Potential Large onvention Space ompetition and
ampus oncept Market Demand
Ro b o t Land (2013)GM Dae w o oR&D
Intl. i-tech ar
(2011)
Go lfPark (201 0)
Intl. Hi- te c h Park
(2011)
Inte rnatio na l Buis ne s sC lus te r (201 5)
City To we r (201 1)
SNU KAIST
(2012)
Ro b o t Land (2013)GM Dae w o oR&D
Intl. i-tech ar
(2011)
Go lfPark (201 0)
Intl. Hi- te c h Park
(2011)
Inte rnatio na l Buis ne s sC lus te r (201 5)
City To we r (201 1)
SNU KAIST
(2012)
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