Case 7 Banvan Tree
Developing a Powerful Service Brand
Banyan Tree Hotels and Resorts had becotne a
leading player in the luxury resorts and spa market in
Asia. As pan of its growrh srrategy, Banyan Tree had
launched new brunds' and brcrrld 'extensiorts that
included resorts, spas, retail outlets, arid eve11
museum shops. Now, the company had to contertiplate
how to manage its brand portfolio arid exparid its
business while preserving the.distinctiveidentity and
strong brand image of Banyan Tree. irr flogship
'
brand
A brand synonymous with private villas, tropical
garden spas, and galleries promoting traditional craft,
Banyan Tree :Hotels and Resorts received its first
guest in 1994 in Phuket, Thailand. Since then, it hads
grown into a leading manager and developer of niche
and premium resorts. hotels, and spas in Asia Pacific.
Despite having minimal advertising, Banyan Tree
achieved global exposure and a high level of brand
awareness through the company's public relations and
global marketing programk. Much interest was also
generated by the company's pro-environmental
business practices. With a firm foothold in the luxury
resorts market, the company introduced a' new and
contemporary brand, Angsana, to gain a wider
customer base. As the resorts market became
increasingly crowded with similar competitive
4
offerings, lured by the success of Banyan Tree, the
company had to contemplate how to expand its
business and preserve its distinctive identity.
COMPANY BACKGROUND
By mid-2004, Banyan Tree Holdings Pte. Ltd.
(B'h4L) owned, managed, and operated 15 resorts
and hotels, 35 spas,,and 38 retail .shops in more than
.This case was written by Jochen Wtnz and Maisy Koh. Corporate Director. Bnnd Management. at Banyan Tree Hotels and Resow. and
at Angsana Resorts and Spa;. The authors gratefully acknowledge the assistance of Jeannene P. T. Ho, Corporate Director. Revenue
Management of Banyan Tree Hotels and Resons. and Sin1 Siew Lien. in preparing this case,
Copyright 0 2005 Jochen Winz and Maisy Koh.
he complete list of awards won by Banyan Tree can be found on the company's Weh si3 at www.banyantne.com.
40 locations in 20 countries. In &t first ten years since
its establishment in 1994, the company's flagship -
brand, Banyan Tree, had won over 100 international
tourism, hospitality, and marketing awards, some of
which included The "World's Best Spa" (Phuket)
from Corlde Nast Traveler 1998, "Best Resort Hotel
in Asia-Pacific" (Phuket) for three consecutive years
from Business Traveller since 2002, "Seychelles'
Best Resort" and "Seychelles' Best Spa" from World
Travel Awards (2003).' The Banyan Tree brand had
also been compared to internationally established
brands such asHarley Davison and Manchester
.
United. ,
BTHL was founded by. Ho Kwon Ping, a travel
enthusiast and Former journalist. Prior to entering the
hotels and nsons'business. Ho spent some 15 years
managing the' family business, which was into
everything imaginable. such as commodities. food
products. consumer electronics. and property
development. competing mainly on cost, and was not
dominant in any particular couny or industry. The
closing of a factory in Thailand one year after its
openini-because it lost out to other low-cost
producers in Indonesia-was the last straw for Ho,
who then realized that a low-cost strategy was not
only difficult to follow but would also lead him
nowhere. Determined to craft out something
proprietary that would allow the company to become
a price maker rather than a price taker, Ho decided
that building a strong brand was the only way for him
to maintain a sustainable competitive advantage.
The idea of,entering the luxury resorts market
was inspired by the gap in the hotel industry that giant
chains such as the Hilton and Shangri-La could not
fill, There existed a market segment that wanted
 Banyan Tree 495

private and intimate accommodation without the BRAND ORIGINS

expectation of glitzy chain hotels. This was fueled by
the sharp price gap between the luxurious Aman Known as Yung Shue Wan in the local dialect, Banyan
Resorts and other resorts in the luxury resorts market. Tree Bay was a fishing village on Lamma Island in
For example, the Amanpuri in Thailand, one of Hong Kong, where Ho and his wife lived for three '
Aman's resorts, charged a rack rate for its villas idyllic years before he joined the 'family business.
ranging from US$650 to over US$7,000 a night, Despite the village's modest and rustic setting, Ho
whereas the prices of other luxi~ryresorts, such as the remembered it to be a sanctuary of romance and
Shangri-La Hotel and Phuket Arcadis Beach Resort intimacy. The large canopies of the Banyan Tree
by Hilton in Thailand were priced below ~ ~ $ 3 5 0 . ' resembled the shelter afforded by Asia's tropical
Noticing the big difference in prices between Arnan rainforests. Ho thus decided to name his resort
Resorts and the other resorts in the luxury resorts Banyan Tree, and position it as a sanctuary for
market, Ho saw potential for offering an innovative romance and intimacy.
niche product that could also bridge the price gap in
this market. A seasoned traveler himself, Ho THE SERVICE OFFERING
backpacked b u g h o u t the world in his youth. His Unlike most other resorts then, Banyan Tm resorts
extensive experiences an evident in his comprise, individualvillas that cme with a private
nonconforming belief that resorts should provide pl,jacuzzi, or spa tMtment each designed to
more thjustaccommodation. H0 upon the idea offer guests exclusivity and utmost privacy. For
of building a resort comprising individual villas, example, a guest could skinnydipin the private pool
exotic in architectural design and positioned as a his vilh without being seen by oberguests,
romantic and intimate escapade for guests. The rack puning him in a world of his own (see ~ ~ h i 1bfori a~
rates are typically priced US$500 and private t w o - b e h m pool villa with Jacuni and spa
USS2.500 for the resort in Phuket, and between mment pavilion).
US$1,200 and US$4,400 for the resort in the All Banyan Tree resorts and villas were designed
se~che11es.3 Such a value proposition had yet lo be aroundthe concept of providing"a sense of placev to
adopted by any hotel or resort then. reflect and enhance the culture and heritage of the
Operalions at BanyanTree began with only One destination. This was reflected in the architecture,
resort in Phuket$situated On formermining land Once furnishings, landscape, vegetation, and the service
deemed too ravaged to any form of offers. To create a sense of exotic sensuality and
development by a United Nations ensure the privacy of its guests, the resorts were
planningunit. It was a bold decision, but the designed to blend into the natural landscape of the
togetherwith H0 and his brother Ho ICwon surrounding environment and use the natural foliage
Cjan, restored it after extensive rehabilitation works and boulders as a privacy screen (see Exhibit 2
costing a total of US$250 So was showing Banyan Tm Seychelles). In Banyan Tree
Tree Phuket when it was launc that Phuket, for example, h e bed was a square platform in
the company worked quickly lo build lw0 the middle of the room, made similar to the Thai
resorts, one at Bintan Island in Indonesia and the other L L ~ ~ overlooking
~ w , a lotus and illuminatedby
at Vabbinfaru Island in the The company soft lighting at night-in total contrast to the beds
had never looked back since*l3e1-1when the travel accompanied by strong reading lights that were found .
induso experienced a meltdownand was plagued in most other hotels and resorts then. The furnishings
retrenc~mentsd e r the Se~Rmberl1 On the of Banyan Tree villas were delibeiately native to
World Trade Center in 2001, rates at convey the exoticism of the destination with its rich
s w l y *and employe+was retrenched. Iocd flavor and luxurious feel. The spa pavilions in

'Rices a of July 2004; obtained fmm the Web sites of Shangri-La Hotels and Resorts and Hilton Hotels at www.shangri-la.comand.
www,hiton.com,respectively.
'Prices as of July 2004; obtained fmm the Web site of Banyan Tree at www.banyanate.com.Rices of villas a1 Seychelles originally
denominated in euros; convened to US$ at the exchange rate of I=USSI.2.
 . .
4% Banyan Tree

.- 7.. s ,;-

:,mHwl Mew f&ri

4 ., .-- Tree Pool Mllo withhcuizi~dnd~liq~f&$@@t!
a ~rivdf&,~i&~&r&b'm;~im@n
Seychelles:wereconstructed around the large granite
boulders and lush foliage to offer an outdoor spa
experience in complete privacy. The resorts* local
flavor was also reflected in the services offered, some
of which were unique to certain resorts. Employees
were allowed to vary the service delivery process
according to local culture and practices, as long as
these were consistent with the brand promise of
romance and intimacy. 'Thus, in Phuket, for instance, a
couple could enjoy dinner on a traditional Thai long
tail boat accompanied by private 'Thai musicians
while cruising instead of dining in a restaurant.
Banyan Tree Phuket also offered wedding packages
in which couples were blessed by Buddhist monks. In
the Maldives, wedding ceremonies coi~ld be
conducted underwater among the corals. Guests could
aiso choose to dine in a castaway sandbank with only
their private chefs and a billion stars for company.
Service standards at Banyan Tree were
determined in terms of customer satisfaction, rather
than typical service standards in the industry. Products
and services offered were also conceived with the
desired custbmir expeiience in mind. One such
product was the "Intimate Moments" package,
specially created for couples. This is presented as a
surprise when guests returned to find .their villas
decorated with candles, incense, flowers, satin sheets,
a chilled bottle of wine or champagne, and at the
outdoor bath with flowers and bath oils. The couple
will be presented with a variety of aromatic massage
'
oils to inspire those intimate moments;
Another draw of the resorts was the Banyan Tree
Spa, found at every Banyan Tree property. The first
tropical garden spas in the industry, Banyan Tree Spas
offered a variety of aromatic oil massages, and face
and body beauty treatments using traditional Asian
therapies, with a choice between indoors or outdoors
treatment. The spa products used were natural,
indigenous products, made from loial herbs and
spices. Non-clinical in concept, Banyan Tree Spas
relied mainly on the "human touch" instead ofenergy-
consuming high-tech equipment. The spa experience
was promoted as a sensorial, intimate experience that
would rejuvenate one's "body, mind, and soul," and
498 Banyan Tree
was mainly targeted at couples who could enjoy their
treatments together.
To reinforce the Banyan Tree brand association
with culture and heritage, and help promote cottage
crafts, a .retail outlet, known as the Banyan Tree
Gallery, was set up in each resort. Items sold were
made:by l&al artisans, and included traditionally
woven handmade fabrics, garmeqts, jewellery,
handicrafts, tribsl art, and spa accekories, such as
incense candles and massage oils, which guests could
use at home to replicate the Banyan Tree Spa
experience. The result of Banyan Tree's efforts was "a
,very exclusive, private holiday feeling,? as described
by one guest. Another guest commented, "It'.s a treat
for all the special occasions like honeymoons and
wedding anniversaiies. It's the architecture, the sense
of place, and the promise of romance." . with succinct copy or showcasing the awards and
MARKETING BANYAN TREE.
In the first two' yeirk' when Bahyan, Tree was
launched, the company's marketing communications
was managed by an international advertising agency.
The agency also designed the Banyan Tree logo
shown in Exhibit 3, and together with the
management came up with the marketing tagline
"Sanctuary for the Senses."
1 HOTELS
A N D RESORTS
Sanctuary For The Senses
Though' furnished luxuriously, Banyan Tree
resorts were, proktkd,as providing roman tic and
intimate "smallish" hotel experiences, rather than
luxurious accommodation as touted by most
competitors then. More than merely resort stays,
"Banyan Tree Experiences" was marketed as those
intimate private moments with loved ones at the
Banyan Tree resorts. The resorts saw theniselves as
setting the stage for guests to create those
unforgettable memories.
When Banyan Tree was first launched, extensive
advertising was.canied out for a short period of time
to gain recognition in the industry. subsequently, the
company .scaled down on advertising and kept it
minimal, ,mainly in highend travel magazines in key,
markets. The advertisements were visual in nature
accolades won. Exhibit 4 shows Banyan Tree
advertisements highlighting the award-winning
Banyan Tree' resorts.
Brand awareness for Banyan Tree was generated
largely through public relations and global marketing
programs. For example, relationships 'with travel
editors and writers were cultivated to encourage visits
to the resorts. This helped increase editorial coverage
on Banyan Tree, which management felt was more
effective in conveying the "Banyan Tree Experience"
from an impartial third-party perspective. A Banyan
Tree Web site (,www.banyantree.com)was also set up
to enable online reservaiions of rooms and spa
services, and .to provide information on Banyan Tree
products and services.
The management of marketing activities was
centralized at the Singapore headquarters for
consistency in brand building. BTHL appointed a few
key wholesalers in each targeted market, and worked .
closely with them to promote sales; Rather than
selling through wholesale and retail agents that
catered'to the general market, BTHL chose to work
only with agents specializing in exclusive luxury
holidays targeted at wealthy customers. Global
exposure was also achieved through Banyan Tree's
I
I
I membership in the Small Luxury Hotels and Leading
I Hotels of the World. Targeting high-end consumers,
I they represent various independent exclusive hotels
i and have sales offices in major cities around the
world.
 Banyan Tree 499

~ . ~ ~ ~ ~ . ~ + , ~ &~tibwcasin~
.A, t $ _ _ e h s Awardi
: ~ Won
h by
t Banyan
i Traa Resortr C 3U:$+
500 Banyan Tree
BRAND VALUES
Banyan Tree embraced such values as active caring
for the natural and human environment and
revitalizing local communities, in turn creating pride
and respect among staff; The company hoped to build
the brand on values that employees and customers
could identify with and support as part of their own
life values. Thus, the company worked actively to
preserve, protect, and promote the natural and human
environment in which Banyan Tree resorts were
located. I
Preserving the Environment
Resorts were built from scratch using local materials
as far as possible, and at the same time minimizing the
impact on the environment. At Banyan Tree Bintan,
for example, the 70 villas located.in a rainforest were
constructed around existing trees, cutting down as
few trees as possible, to ,minimize the impact the
resort had on the natural environment. The villas were
built on stilts and platforms to avoid cutting trees and
possible soil erosion. At Banyan Tree Maldives
Vabbinfaru and Banyan Tree Seychelles, fresh water
supply was obtained by the more expensive method of
desalination, instead of extracting.water from the
underground water-table, whi~hrisked disrupting the
ecological system inthe'long run. '
Toiletries, such as shampoo, hair conditioner,
bath foam, and body lotion provided in the resorts
were nontoxic and biodegradable, and filled in
reusable containers made from celadon or ceramic.
Refuse was recycled where possible and treated
through an in-house incinerator system otherwise.
Waste water was also treated and recycled in the
irrigation of resort landscapes. ~ v thee detergents
~ to give a decent ,livelihood to the people who work.
and soap used in the resorts were biodegradable.
Through the retail arm Banyan Tree Gallery, the
human environment efforts were evident in the active
sourcing of furnishing from indigenous tribes to
provide gainful employment. These employment
opportunities provided a source of income for the
tribes and, at the same time, preserved their unique
hen tage.
Creating Brand Ownership Among
Employees
All employees were trained in the basic elements of
Five-star service establishments. which included
greeting guests, remembering their first names, and
anticipating their needs. In addition, some employees
got a taste of the "Banyan Tree ~xperierke"as part of
their training; Management believed that the stay
would help employees understand better what guests
will experience, and, in return, enhance their delivery
of special experiences.forthe guests.
Althoughmanagement imposed strict rules in the
administration of' the resorts. employees were given
room to exercise creativity and sensitivity. For
example, the housekeeping teams were not restricted
by a standard bed decoration. Rather, they were given
room for creativity although they had general
guidelines for turning the bed to keep in line with the
standards of a premium resort. Banyan Tree invested
liberally in staff welfare: employees were taken to and
from work in air-conditioned buses, and had access to
various amenities, including goodqual ity canteens,
and medical and child care facilities. Staff dormitories
had televisions, telephones, refrigerators, and
attached bathrooms.
The company's generous staff welfare policies
apparently paid off. Ho said, "The most gratifying
response is the sense of ownership that our staff began
to have. It's not a sense of financial ownership, but
they actually care about the property. In our business,
service and'servicestandards do not always mean the
same thing as in a developed country, where standards
are measured by efficiency and productivity, by
people who are already quite well-versed in a service
culture. We operate in places that, sometimes, have
not seen hotels. People come from villages. What we
need-more than exact standards-is for them to have
a sense of hospitality, a sense that the guest is an
honored person who, by virtue of being there, is able
This creates a c~alturein which everybody is friendly
and helpful;"
:,
Involving Guests in
Environmental Conservation
As part of the company's efforts to encourage
environmental conservation and help save the,
environment, Banyan Tree organized activities that
involved guests' participation to create more interest
in environmental preservation. In the Maldives, for
instance, guests were invited to take part in the coral
transplantation program (see Exhibit 5 for a picture of
- -
ooriyan I ree 3U I

the island resort and its surrounding coral reefs). Involving the Local Community
Guests who participated in the progrim were then Banyan Tree also tried to involve the local community
encouraged to return several years later to see the in all aspects of its business, even as the resorts were
progress of their effoqs. Guests could also participate being built. Villas were constructed as far as possible
in marine biology sessions that allowed them to learn from indigenous materials, most of which were
more about the conservation of marine life, and take supplied by local traders. Traditional art, and
part ni reef cleaning projects. The response from handicraft that complemented the villas' aesthetics
guests had been tremendously positive. were also purchased.from local artisans. In addition,
' established The ~ r i Imperative
~ a & a nTree q the company engaged local craftsmen to produce
Fund to support community-based environmental indigenous & and handicrafts for sale at the resort's
actiol~in the Asia Pacific region. Guests were billed retail outlets, the Banyan Tree Gallery.
US$[ per room night (of which they could opt out if The company believed in building profitable
they wished) and the company matched dollar for resorts that would also benefit the local environment
dollar. Details of the program were c~mmunicatedto and contribute to the local economies through the
IF
guests through various ways, such as environmental creation of employnient and various community
messages aitached to in-villa turndown.gifts. projects. Thus, besides providing employment for the
~ u e s t swere often happy to know that their local comnlunity. the company also brought business
patronage contributed to meaningful causes, such as to the local famiers and traders by making it a point to
the building of schools for the local coniniunity, purchase fresh produce from them. Where possible,
restoration of devastated coral reefs, and the sur~i\~al the corilpany also supported local tourism ventures
of local village crafts. that would both benefit the wider local cdmmunity
502 Banyan Tree
and enhance the visitor's experience. In Phuket, for
example, noting that the local hawkers tended to
peddle food and gift items on the beachfront near
Banyan Tree properties, the company constructed a
food center with proper facilities for these hawkers, to
promote proper hygiene standards and limit pollution
from refuse-and waste food scraps..
Recognizing that the dispkity:in lifestyles and
living standards between guests and the local
community might create a sense of alienation within
the local community, a Community Relations
Department was set up to develop and manage
copunity outreach programs. Funding scholarships
for needy children, building a school and child care
center, hosting lunches and parties for the elderly, and
supporting local culhlral and religious activities were
some of the community outreach programs introduced
by the company.
GROWING THE .BANYANTREE
In BTHL,-took over the management of a city
hotel in.the heart of Bangkok from Westin Hotel
company. 'lbe hotel was rebranded as Banyan Tree
~hagkok,after extensive renovation works were
completed to upgrade the hotel's facilities, build new
additional spa amenities and a Banyan Tree Gallery.
This was the first Banyan Tree hotel to be located in
the city area, unlike the other beachfront Banyan Tree
properties.
As the sayanTree brand became established,
the company began expanding its netwoik of spas and
retail outlets. Stand-alone Banyan Tree Spas and
Banyan Tree ~allbrieswere set up .as separate
ventures, independent of Banyan Tree hotels and
resorts, in various cities such as Shanghai, Sydney,
India, and Dubai, operating either in other hotels or as
stand-alone outlets.
INTRODUCING NEW BRANDS
After establishing a foothold in the luxury resorts
market, BTHL introduced the Angsana brand, in
response to demand from hotel operators in Asia that
were keen to introduce spa services'intheir hotels. As
the positioning of these hotels did not fit that of
Banyan Tree, the company decided to' launch a new
brand, Angsana, amore contemporary and affordable
brand than Banyan Tree, to run as stand-alone spa
businesses in other hotels.
The first Angsana Spa was opened in 1999 at
Dusit Laguna, one of several hotels at Laguna Ruket,
an integrated resort development with shared fkilities
located at Bang Tao Bay in Thailand. The Angsana
Spa was so well received that the company quickly set
up five other such spas in various hotels in Thailand.
In 2000, BTHL opened i(s first h g & a Resort &
Spa, complete with an Angsana Gallery, located less
than one kilometer away from Banyan Tree.Bintan. In
2003, BTHL launched "Colours of Angsana" to
penetrate the soft adventure and cultural tourism
market, catering to the more adven&uS segment of
the market. "Colours of Angsana" was launched as a
product line of Angsana, and comprised a collection
of individual hotels and resorts, each with their own
identity, situated at more offbeat and exotic locations,
and priced more affordably than Banyan Tree. These
hotels were acquired under management or revenue-
sharing arrangements, and were "miinaged by"
Angsana. The brand name was chosen, as Ho wanted
them to "remain individual, each with their own &lor
and name,' like in artist's palette."' As .d,2004, two
hotels were launched under the ''~olouif Angsanaw
brand-the Gyalthang Dzong Hotel in Shangri-La,
China's Yunnan province, and the .Deer Park in
Giritale, Sri Lanka.
THE ROAD AHEAD
To diversify its geographic spread, Ho planned to
venture into locations in South America and Sou!hern
Europe, where he hoped to replicate Banyan Tree's
success in Asia. ow ever, given the higher costs of
doing business in America and Europe, would the
same strategy that had brought fame and success to
Banyan Tree in Asia be workable in the rest of the
world? Ho's'ultimate vision was 'lo string a necklace
of Banyan Tree Resorts around the world; not
quantity, but a number of jewels that form a chain
around the world." A list of Banyan Tree's current and
planned properties is shown in the Appendix at the
end of the case.
Also, while expanding the company's network of
hotels and resorts, spas, and retail outlets,'Hohad to
be mindful of the brands' focus and be cartifid not to
dilute the brands. He also had to consider the strategic
 Banyan T.. y 503
. . . . .

f i t of the. company's pordolio of brands, which
comprised Banyan Tree, Angsana*and Coloun of
Banyan Tree certainly stood out among its
competitors in the resorts industry when it was first
launched. Since then, its success attracted various
competitors, which offered similar products and
services. Thus, it we imperative that Banyan Tm
retained its competitive advantage to ppvent losing
its distinctive position in the market.