South Korea is now home to it’s second Hard Rock Cafe, as one of the world’s most recognizable food, drink and entertainment brands recently opened its doors just off of Haeundae Beach in the port city of Busan –an increasingly popular tourist destination on the Korean peninsula.
Tory Mock sat down with Antonio Bautista, Vice President of Operations and Development and 20-year veteran with the Hard Rock Cafe. The two talked about the move to Busan, the company’s continued expansion across Asia and some of the locations to look for in the coming year.
How does Hard Rock choose its locations?
We’re very fortunate in that turn because our approach is primarily one cafe per city. So it’s going to be quite easy for a city to fit our criteria. If there are more than 300,000 people and a certain GDP per person, you establish cities where you can or cannot be. We would have a problem if we wanted to do 10 or 15 cafes per city. Then, we would have to be a little bit more careful with the economics and the metrics of the city, but for us, Busan, clearly – with over three million people, a good number of tourists, excellent events, solid MICE business – was a no-brainer. We actually would have come earlier if the opportunity had presented itself, but it didn’t, until now.
“In any city where we have a cafe, expats will find us, as we have strong brand loyalty; having said that, in many markets our focus is, first and foremost, to look after our local customers.”
Is Hard Rock scouting for places, or are people contacting you, saying, ‘Hey, we want to do a franchise’?
It’s a mixture of both. The brand generates a lot of inquiries; therefore, we have a substantial number of applications regularly. We also have long-standing partners, and those partners want to continue growing the brand, and on many occasions we do that with them. And then you have frontier markets, like Laos or Myanmar, where we were waiting to get the right location and the right partner, because we get constantly asked whether we want to open up there or not.
So you’re going to open up Myanmar?
We are, yes, that is correct.
Likely, it depends on the location, but what demographic drives business most, local customers or tourists in town visiting?
Of course, a large number of expats that visit a city as a tourist will eventually come to Hard Rock Cafe because we are a place of pilgrimage for expats. In any city where we have a cafe, expats will find us as we have strong brand loyalty; having said that, in many markets our focus is, first and foremost, to look after our local customers. In a city like Vientiane (Laos), our business will be driven by local population.
What about Busan? What is the tourist-to-local breakdown you’re expecting?
We expect 60 percent locals, 40 percent tourists, but I think, at this point at the beginning, until the local population knows we’re here, we’ll probably attract the expat loyal guests easier because, from day one they arrive at the city, the first thing they do is check if we are here and if we are, they come. For the locals, we will need to gain their trust and articulate the brand to those who might not be familiar with it, in a manner that will resonate with them.
That’s a good point; a fair number of Koreans I’ve spoken with were unfamiliar with the brand. What is your elevator pitch to visit the Hard Rock Cafe?
The first thing I would say is that we are a genuine experiential brand. We are not a cosmetic product that came out of a marketing department in a laboratory in a city somewhere. We’ve spent 45 years in the market, building our brand. We were the brainchild of two very idealistic, entrepreneurial young American guys, hanging out in London in the ‘70s, that wanted to create an atmosphere that attracted all sorts of generations, all sorts of people.
Where is the franchise headed next? From what I’ve read, Asia is booming for you guys. right?
There’s so much activity. Before the end of this year, we have Vientiane. In January, we should have Ko Samui, which will be our fourth cafe in Thailand. Also next year, we have Myanmar – Yangon. We will have our second cafe in Cambodia in Phnom Penh. We will start our second cafe in Vietnam, which will be Nha Trang, and we should have several locations opening in China as well. The next five years in Asia will have a high level of activity with our brand being deployed in several new markets.
A version of Tory’s interview also ran in Haps Magazine.