November 13, 2003

Article at Far Eastern Economic Review

Pooling Ideas: Need to get some work done? Why not take a trip with your colleagues to Bali?

A GENTLE BREEZE floats over the pool. Thin clouds stretch lazily across a deep blue sky. The temperature rests at one of those magical spots on the thermometer: not too warm, not too cool. This is the Maharaj, a luxury villa in the Oberoi district of Bali. It's heaven here most of the year, and ideal for doing nothing at all.

Or, if you're Bob Reed, for getting some real business done. Reed is co-founder and principal at Options Group, a global executive-search firm.For him, Bali's villas -- luxury compounds where guests usually stay in individual pavilions -- are as much a place for business as for relaxation. "At the senior level, it's better to build relationships in this kind of setting than in a conference room in Tokyo, Hong Kong or Singapore," he says. "Where the vibe is more relaxed, relationships just mushroom."

Reed is not alone in finding villas an ideal -- if unexpected -- place for doing business, even in the wake of the Kuta bombings. "More people are catching on to what a great deal the villas here are, and more companies are looking for private villas to have private meetings," says Jose Luis Calle, general manager of The Bale, a villa in Nusa Dua.

So, what do executives get up to?

"I'd say the talk is half work, half personal," says Reed. He uses the Maharaj for treating clients, holding off-site meetings, wooing potential employees, and -- vitally -- holding parties.

That may sound like fun, but such events are essential to Reed's head-hunting business. Back in August, Reed recalls, he invited a guest at a nearby villa to a party; that guest in turn brought along his own group of contacts, which happened to include several high-level financial-services experts based in Asia. "If I meet five people like that," says Reed, "you're talking potentially hundreds of thousands of dollars in fees over the next few years."

And it's not just financial types turning to villas. Last year, the fashion group Hermes used the Purnati villa in Ubud to launch its Nomade watch.

Marcus Foley, managing director of high-end interior-design firm PDM International in Shanghai, says that over the past five years he has held a number of meetings with clients and staff in Bali, and has stayed in "maybe 12 different villas." Foley's favourites include Villa Santai, Maharaj, and Banyan Estate. "Also, the recently completed Istana, which overlooks the sea on the cliff edges."

Foley prefers villas for several reasons: "The benefits over a traditional hotel," he says, "include unique accommodation, great ambience, flexibility and costs savings when you include food and drinks that are cooked and served by the in-house staff, and the fact you are made to feel special."

Not surprisingly, villas are becoming more business-friendly. Ita Newman, owner of Umah Di Beji, a five-room villa in Canggu, says she's making modifications in response to the increased interest from business users. "I've received quite a few enquiries from businesses -- including from Hong Kong, Singapore and Jakarta -- in the past year asking about using the villa as an off-site," she says. "I've definitely sensed a change." After turning away -- reluctantly -- business groups that were too large, she's now adding extra buildings as well as an underground area for use as a media or meeting room.

Cahaya Mentari, a villa under development between Seminyak and Canggu, will specifically target business users and has conference facilities built into the master plan.

But it's important to keep the villa a villa, says Reed. "I would compare it to a golf outing with a client," he says. "We never really need to sit down at a conference table and hash things out. We might need the Internet and a phone, but not necessarily professional facilities."

Indeed, it's the very informality of a villa that sets it apart from chain hotels. "We feel villas are more personal," says Foley of PDM International. "They allow us to better communicate and develop longer-term relationships."

There's also a matter of economics. While a villa may sometimes sound expensive, it costs less than a hotel. Umah Di Beji, with five rooms, charges between $650 and $950 per night to rent the entire complex. The Maharaj, also with five rooms, is a bit cheaper, at between $250 and $450 per night.

"Hotels lure people in with cheap room rates and then nail them on the food-and-beverage and event costs -- corkage fees, must-use hotel catering, event fees, First World pricing for food and drinks, and so on," says Ian Macaulay, managing director of Elite Havens, a villa-rental agency.

Villas, in contrast, include the staff in the price, which means it'll cost nothing extra to have them run down to the local market for vodka and tonic and serve drinks all night.

Who, then, is going to Bali? Not big banks and multinationals. "It's just not possible for management to approve company-funded events and travel while the government warnings are in place," says one villa owner who asked not to be named. Adds Stephen Vickers, president and CEO of International Risk Management: "American companies especially tend to avoid Indonesia."

"Most of the villa guests tend to be Asia-based owners and executives of high-level but not necessarily large firms, says Macaulay. "They don't have to deal with multinational paranoia and liability issues." Reed's happy to leave the chain hotels to the multinationals. "A villa makes for a more personalized approach," he says. "For people like us, it's an ideal place to network."