Global Glance: January 4, 2016

A quick look at intriguing international stories

By John Bostwick, Managing Editor, Radius

Welcome back to Global Glance. This week we look at:

• A Thai hotel chain’s aggressive and intriguing global strategy
• 2015: The year of mergers and acquisitions
• Year-in-pictures slideshows worth scrolling through

A Thai Hotel Chain’s Aggressive and Intriguing Global Strategy

Nikkei Asian Review ran a piece last week that speaks to the many motivations multinationals have for expanding into new markets, and the equally varied strategies they employ. The article describes how Dusit International, a hotel chain based in Thailand, is aggressively expanding into new regions, in part because political turmoil is negatively affecting domestic tourism. Dusit “seeks to open up to 20 new hotels a year on the back of a strategy promoting the nurturing of local human resources. … it targets an overseas revenue ratio of 80%.”

While Dusit emphasizes local HR training — including running “universities and vocational schools” where they operate — the chain is unabashed about bringing the feel of Asia to remote regions. Here’s the Nikkei Asian Review again: “In the lobby of the [Dusit Thani Dubai hotel, opened in 2001] … staff members in Thai ethnic costumes play traditional Thai musical instruments. ‘I feel as if I were in Asia and relaxed,’ said a businessman, 39, from Kuwait.” The Review adds that the “principal targets for [Dusit’s] overseas expansion are emerging markets such as the Middle East, Africa and China. It plans to open 15-20 hotels per year, mostly overseas.” (By the way, the Dusit Thani Dubai hotel appears in the photo below, at the main crossroads. It has a large archway in the center of the building, so it looks a little like an inverted “Y.”)

The” News” section of Dusit’s website indicates that the chain opened a hotel in Nairobi in March of this year. It’s Dusit’s first property in sub-Saharan Africa. The Nairobi venture is a “dusitD2” hotel, which, the press release explains, is “Dusit International’s ‘next generation’ hotel brand … [that] caters to today’s international travelers seeking cutting-edge design, high-tech connectivity and efficient, modern convenience in environments that are contemporary, colorful and chic.” The accompanying photograph of the hotel’s interior is proof of Dusit’s ability to impose its own aesthetic on virtually any region. To my eyes, the decor looks about as sub-Saharan as a picture of an Alaskan fjord. Perhaps conscious of this disparity, the grand opening in Nairobi featured an “East Meets East” cocktail party, where guests “enjoyed an evening of Thai and Kenyan dance performances, as well as signature dusitD2 Nairobi drinks and snacks, in an event where the very best of Thai and Kenyan culture and cuisine converged.”

Those in the continental US can try out a dusitD2 hotel in, of all places, Pasadena. An April article in The LA Times notes that a “mix of staid historic Pasadena and modern Asian flair gives the hostelry now known as the Hotel Constance DusitD2 Pasadena its edge in a competitive local hotel market” and that “guests at the Constance are primarily ages 25 to 45, ‘people looking for something different from a normal hotel,’ [hotel executive Paul Jan Zdunek] said. ‘It seems like an international crowd.’” For ample evidence of this international, chic atmosphere, check out this narration-free video of the Pasadena dusitD2.

2015: The Year of Mergers and Acquisitions

It’s official: 2015 was the year of the merger and acquisition. According to Dealogic, 2015 set records for both deal activity and volume. While this is hardly news for those who follow international business trends, some well-respected journals made year-end observations about the M&A boom. Here are a few worth a look.

Let’s start with The Financial Times' take: “Hunger for growth in a weak economic environment, cheap financing and continued pressure from activist shareholders to boost returns drove many companies to combine.” Some experts quoted by the Times caution that there could be a slowdown due to concerns over another financial crisis, the high-yield debt market and other factors, but add that the “fundamentals” that drove the 2015 M&A boom “remain broadly intact for 2016.”

The Wall Street Journal provided this summary: “… this year will go down as one for the M&A annals as companies agree to merge at a breakneck pace, encouraged by increased boardroom confidence, cheap debt, pressure to become more efficient in a slow-growth economy and a desire to keep up with consolidating rivals.” The Journal notes that “health-care and technology-industry deal making … have vied with each other all year to be the No. 1 sector for M&A,” and that investment banks “raked in about $21 billion from advising on takeovers [in 2015].” By contrast, “private-equity firms, which played a key role in the last boom, are largely absent now, crowded out in many cases by corporate buyers.” Finally, the Journal observes that some experts “warn that the current pace [of M&As] may not be sustainable.”

A recent MarketWatch opinion piece by Brandeis University professor Benjamin Gomes-Casseres gives this general advice about M&As: “Every business combination … must follow three laws to succeed. They must have the potential to create value, they must be designed and managed to generate that value, and the gains from the deal must be shared effectively among the players.” Professor Gomes-Casseres then offers his candidates for the most remarkable corporate deals of 2015, starting with the mammoth Allergan-Pfizer inversion.

Year-In-Pictures Slideshows Worth Scrolling Through

There’s seemingly no end of “year-in-pictures”-type slideshows available online these days, many of them with a global bent and of high quality, like this New York Times series that presents pictures in chronological order by month. Don’t go there looking for uplifting photos, though. The introduction to the series begins with the following passage: “This was the year of the great unraveling, with international orders and borders challenged or broken, with thousands of deaths, vast flows of migrants and terrorist attacks on some of the most cherished symbols of civilization, both Western and Muslim.”

Even more memorable (and equally occasionally disturbing) is this slideshow from CNN.com. It contains 166 photos, also in chronological order, with the exact dates of the photos listed under each. One remarkable picture was taken on March 2 by an amateur photographer in a London park. The photo, which according to the CNN.com caption “went viral on Twitter,” shows a weasel on the back of a brightly colored woodpecker that’s in flight. Though it depicts a life-and-death struggle, it’s relatively easy to look at compared with many of the other painful subjects here, from the refugee crisis to acts of terrorism, so you’re warned.

For another remarkable international photo series that avoids socio-political subjects in favor of relatively benign categories such as “Outdoor Scenes” and “Sense of Place,” check out National Geographic’s Traveler Photo Contest 2015 Galleries page. The first slideshow defaults to the contest winners, but virtually all the entries — which can be sorted either by the week they were submitted or by the four entry categories — are outstanding. And they’re accompanied by (apparently largely unedited) commentary from the photographers. I found this caption of a photo taken by Takahiro Bessho oddly moving: “In Japan, we have a little snow lately. But sometimes, the winter remembers how to snow on us. ... It is so rare to see this site without any person. Of course, rarer with snow.”